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Strategic Network Optimization at Tetra India

CASELET, OPERATIONS MANAGEMENT , SUPPLY CHAIN MANAGEMENT
ET Cases, 6 pages

Case Preview

Strategic Network Optimization at Tetra India

 

Gagan Khanna (Khanna), Head, Supply Chain Department, Tetra India was having coffee in his office on a Monday. Khanna was reminiscing the last quarter which was a disastrous one with supply chain costs spiraling exponentially. He was wondering whether the supply chain of Tetra India was optimized, hence he decided to do an in depth assessment of the entire process.

Tetra India: An Overview

Tetra India is a public limited company engaged in the business of marketing food and food ingredients to consumers and institutional customers.

Their vision was to become the Best Performing, Most Respected Food Company in India.

Their driving motto being, “Nourishing Families...Enriching Lives” and their call to action – “ACT NOW” – which denoted being empowered, being agile and making a difference with a sense of urgency!

Sales and Distribution at Tetra India

Tetra India reaches cities and towns across the length and breadth of India and reputed retail stores sell their products (traditional trade stores, visited by consumers frequently).

The company has a strong presence and a proactive stance with respect to modern trade. There are direct selling agreements in place with key accounts like Reliance Retail, Food Bazaar, Aditya Birla (More and Trinethra), Heritage, Food World, Spencers, Bharti-Walmart, Tesco, Hypercity, D-Mart, etc.

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Teaching Note Preview

Strategic Network Optimization at Tetra India

 

Synopsis

This caselet is a classic example of how to setup an optimized end-to-end supply chain. The very dynamic nature of the FMCG industry poses further challenge to the cost elements involved in the supply chain. The caselet gives an overall perspective of Sales and distribution, Manufacturing, Procurement and Logistics.

The caselet has a number of exhibits which details out the Bill of Material, unit of measure conversions and the various cost elements in the supply chain. The idea is to frame a supply chain model using excel and work out the various combinations of suppliers, factories, warehouses and transportation modes. The objective function can be maximization of profits or minimization of the costs. The constraints, shelf life, VAT benefits and the product mix in the caselet need to be appreciated to arrive at the optimum solution.

Prerequisite Conceptual Understanding

This caselet presupposes conceptual understanding of the following:

A working knowledge along with the business implications of the following concepts would enable an effective discussion leading to more practical solutions than a mere intellectual exercise:

  • • An understanding of end to end Supply Chain
  • • An understanding of the cost elements involved in a supply chain
  • • An understanding of framing of a Linear Programming Problem (variables, objective function, constraints)

 

Expected Learning Outcomes

  • • Understand the stakeholders in the supply chain for an FMCG company
  • • Appreciate the various types of costs involved in an end to end supply chain
  • • Understand the significance of a global optima vis-à-vis local optima
  • • Modeling the supply chain in an excel spreadsheet

 

Caselet Positioning and Setting

This caselet can be used in either MBA or Executive MBA or Executive Development Programs, for the following modules/topics in the Supply Chain Management course:

  • • Supply Chain Network Design
  • • Transportation Management
  • • Strategic Sourcing

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$3.66
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Product code: SCM-2-0002, SCM-2-0002A

Abstract


This caselet examines the problem of spiraling supply chain costs at Tetra India, an FMCG company engaged in the business of edible oil and popcorn. Multiple layers of costs are involved in an assorted process, ranging from procurement costs, transportation costs, manufacturing costs, distribution costs, ordering costs to opportunity costs. Any kind of supply chain network entails to be global optima rather than local optima. The caselet takes into account multiple suppliers, factory, warehouse, transport and SKU combinations to arrive at an optimum supply chain network.



Pedagogical Objectives

  • To understand the stakeholders in the supply chain for an FMCG company
  • To appreciate the various costs involved in an end-to-end supply chain
  • To understand the significance of a global optima vs a local optima
  • To model the supply chain in an excel spreadsheet

Case Positioning and Setting
This caselet can be used in either MBA or Executive MBA or Executive Development Programs, for the following modules/topics in the Supply Chain Management course:

  • Supply Chain Network Design
  • Transportation Management
  • Strategic Sourcing



This Case Pack Includes:
 - Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
$3.66
Rs 0

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