Supply chain management at W’up Bottlery Harvard Case Solution & Analysis

  Introduction and Problem Statement

            Rajat Mehra who is the director of supply chain management at W'Up Bottlery in Uttar Pradesh has been thinking the plant’s supply chain performance over the peak season of summer which has just ended. The company W'Up Bottlery, which is a subsidiary company of Hindustan Coca Cola Beverages Private Limited (HCCBPL), has looked to offer soft drinks for the Uttar Pradesh market. As the case states, the inventory has gone down considerably and the fill rates have improved or increased relative to the previous peak sales season.

            However, Mehra has been planning to improve the process radically. Mehra has recently heard about the concept of vendor managed inventory (VMI) which has been a new concept in the Western world. If W'Up Bottlery implements VMI, then the reports will be reported to the inventory levels directly to the W'Up Bottlery supply chain group.

            Along with this, once VMI is installed, it will make the decision as to how much stock needs to be sent out to each distributor in the region. Therefore, Rajat Mehra along with the team is wondering how the idea might be implemented at HCCBPL.

Summary of the Case

            The case “Supply Chain Management at W’Up Bottlery” explains the situation of the company W’Up Bottlery where the company has been planning to implement VMI model under the leadership of Rajat Mehta. The issue or the current position of the company indicates that the current sales, inventory management system are a costly one. If VMI is implemented within the company, the cost will reduce significantly.

            Similarly, the sales team has not delivered the results that are expected of them, where the over dependence of distribution channel has been a method in the company in the current situation. If VMI is implemented the company can actually overcome such issues as per Rajat Mehra.

            Along with this, the new channels of distribution that are available in the market have shown quite ample results for different companies in the similar industry. W’Up can also focus on the reusable bottles also, this can again reduce the excess stock and the inventory simultaneously.Mehra after consulting his team has been looking to study the advantages of vendor managed inventory system. He has to actually decide upon the future of the company and the business model it will flow.

Analysis

Implementation of Vendor Managed Inventory Systems

            The vendor managed inventory system is a basic means optimizing supply chain performance in which the manufacturer becomes the decision maker for maintaining the distributor inventory levels. Along with this, the manufacturer has the access to all the distributors’ inventory data and who is also responsible for generating all the purchase orders.The model of VMI helps the manufacturer generate the order and not the distributor (Franke, 2010).

The reason which basically provokes the decision of implementing VMI at the company is because of the fact that the number of drinks available in the Indian market has increased significantly. The balance between supply and demand if managed properly can help the companies in the industry achieve significant success and economies of scale.

Since the company (HCCBPL) has been one of the major subsidiaries of Coca cola it has been looking to implement VMI, which would help in managing the unorganized structure of the company. If HCCBPL can implement VMI at the company it can help the organization overcome the problems in the infrastructure of the company. Therefore, if VMI is implemented, then it will become an effective method for the organization.

Supply Chain Business Model

Once the company can implement vendor managed inventory, it will allow the distributors to directly communicate with the factors. Along with this, this method of having vendors will reduce the chain and the sales representatives will be eliminated. The reduction will reduce the overall cost also. As the case states, carbonated drink industry has been affected by the increasing number of products launched in the market.

Supply chain management at W’up Bottlery Case Solution

With the sales representatives no longer a part of the process, it will help to reduce the incentive of these people also. As sales representatives look to offer bulk quantity in order to maximize their incentives. If the VMI model is implemented then it can help the company directly deal with the retailers and the time will also be saved and the inventory can also be managed in an efficient and effective manner. The supply chain is the need of the time; organizations in the West have actually looked to adopt the idea and methods of supply chain management in order to become successful and aligned with the distributors and other channels where the end product is delivered to the customer in the most appropriate manner.............................

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