A Review of Cadbury’s Supply Chain:
Literature Review: ‘Man of Dairy Milk and Money’. Elaine Watson
* This article begins by highlighting how Cadbury’s have had their fair share of problems: * Salmonella outbreak in 2006
* Decision to close Somerdale factory and switch production to Poland. * Factory issues in Sheffield: river quite literally flowing through the factory. * But as the article highlights, the firm has a strong and strategically placed supply chain.
Areas of Competitive Advantage:
* Factory Network: They recently built a new factory in Poland. They have an established network with two other factories there, and a gum plant. * Cost effective Supply Chain: By strategically placing the factories in Poland they were able to achieved cost savings in two key areas: * Cheaper wages (despite the fact that they are increasing). * A reduction in labour by 15%, which resulted in boosting operating margins from 10% to the mid-teens. * Alignment of Supply Chain: Cadbury’s treat the supply chain as a whole; “It is very easy to think in terms of manufacturing, logistics, sales, purchasing and so on. But their objective must all be aligned”. They ensure that work groups are formed compiling of resources from across the different functional teams. This ensures that every project/group is focused on achieving their main goal of customer satisfaction, and are able to consider this from every part of the manufacturing process. * Global Benchmarking: “We’ve got lots of key performance indicators in terms of quality, safety, service level, and the environment, but for manufacturing we use OEE”. Cadbury’s highlight the importance of waste management owing to the fact that raw materials have dramatically increased in prices over recent years (Cocoa for example has increased from £1,000/t to £1,600/t. * Environmental responsibilities: Cadbury’s aim to reduce their carbon footprint by 50% by 2020. * Manufacturing Ownership: Manufacturing is a core competency for Cadbury’s. There are arguments in favour of keeping this in house in terms of economic and intellectual ones. Bournville is the core plant; here they have 1,000-1,200 staff as well as sophisticated machinery producing 100,000t of chocolate products a year. This factory further produces 1m crème eggs a day. * Outsourcing: Cadbury’s outsource two of their products: * Snaps: this involves unusual technology.
* Green & Blacks.
Literature Review: ‘Ethical Supply Chains – ‘The New Black’?’ Lisa Brown.
* This article highlights the importance of sustainable supply chain management, and likens the rate of take up to ‘The New Black’. Therefore this article is centered around how Cadbury’s manage a sustainable supply chain in order to gain a competitive advantage. * Cadbury’s are an example of a firm who have successfully implemented such ethical considerations into their supply chain. In 2009 they announced that the cocoa drinks and dairy milk chocolate would be fair-trade certified in British and Irish markets. This mark ensures that the farmers are paid a fair price, and that crops are farmed under sustainable conditions (putting a halt to child labour). * Advantages of Sustainable Supply Chain Management (SSCM): * Changing consumer attitudes: The article paints a picture of a consumer who is no longer concerned by product quality and other tangible aspects, but rather is concerned with the integrity of supply chains (and will often spend more money on those products that appeal to their moral code). This view is personified through Brown’s comment that “…pressure to donate, volunteer, buy green… by organic, recycle, reduce carbon emissions”. Brown further states, “Customers often feel a sense of intrinsic commitment and emotional attachment to the products they purchase * The price of not acting sustainably: the article compares...
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