Indian Ice-Cream industry and Supply Chain Innovation at Geddy’s Shu-Yu Hsueh Kanako Tone Naoto Utsumi Xinxin Xi Indian Ice-Cream industry and Supply Chain Innovation at Geddy’s RAWLS 3097 TEAM 4 UNSHY CONSULTING GROUP

Our Agenda Today Problem Statement Recommendation Analysis UNSHY (Xinxin Xi) Problem Statement Recommendation Analysis UNSHY Consulting Alternatives & Risks Implementation Conclusion Q & A Problem Recommendation Analysis Alternatives Q & A Conclusion 11/14/2018

The Background Indian Ice-Cream Industry Geddy’s Ice Cream (Xinxin Xi) Indian Ice-Cream Industry Low per capita ice-cream consumption Fragmented market with unbranded ice-cream Seasonal Swing in sales High potential in next decade Geddy’s Ice Cream US invested company Authentic ice-cream Artisan manufacturing and design Self-owned franchise retailer Problem Recommendation Analysis Alternatives Conclusion Q & A 11/14/2018

Problem Statement Fluctuation of demand Retail Sourcing (Xinxin Xi) Sourcing high raw material cost Manufacture Low utilization during off-peak season Distribution Imbalanced load Retail Short of inventory during peak season Fluctuation of demand Problem Recommendation Analysis Alternatives Q & A Conclusion

Recommendation Short term Long term Mid term (Xinxin Xi) Short term Order twice a week during peak season Marketing during off-peak season Mid term Select Multiple suppliers Expand portfolio Long term Geographic expansion Problem Recommendation Analysis Alternatives Conclusion Q & A 11/14/2018

Discrepancy between Sales and Demand Trend (Naoto Utsumi) Target Service Level Policy Scaled Stocking Level Policy Common Service Policy Target Level for Top Margin Policy (Priority for top 3, TV, BBS, and LL) Decline in profit and sales Target Level for Top Margin Policy (Priority for top 2, TV and BBS) Recover the profit and sales Problem Recommendation Analysis Alternatives Q & A Conclusion

Leftover Effect leading Unusual Sales Trend (Naoto Utsumi) Problem Recommendation Analysis Alternatives Q & A Conclusion

Profitability with Different Policy in High Season (week 14 - 43)* (Naoto Utsumi) Policy Expected Profit (1000 Rupee) Expected Lost Sale (units) TV BBS LL BT Total Service Level 90%** 3,483 15 16 11 57 Scaled Stocking Level 3,199 270 301 120 262 952 Common Service Level 3,204 252 263 182 249 946 Target Level for Top Margin (TV, BBS,LL) 3,138 1,741 1,783 (TV, BBS) 3,143 495 990 1,517 Service Level 90% Restocking twice a week*** 3,475 22 23 21 81 * Capacity constraint: 350 units / week **Neglect capacity constraint ***Neglect the incremental transportation cost Problem Recommendation Analysis Alternatives Q & A Conclusion

Feasibility of Increasing Service Level (Naoto Utsumi) Profit and Leftover (week 1 - 60) with Restocking Twice a Week Policy Service Level Profit (1000 Rupee) Leftover Capacity Constraint 90% 5,449 1,915 OK 95% 5,473 2,403 98% 5,485 2,973 99.5% 5,491 3,718 Problem Recommendation Analysis Alternatives Q & A Conclusion

Other Solutions (Kanako Tone) To tackle issues with fluctuation of demands throughout a year Issues Alternatives  Fluctuation over seasons Manufacturing Capacity Planning Storage Capacity Planning Financial figures Total Less variety of products + +/- - Marketing in off-peak season ----- 1 Multiple vendors Extra Storage on the peak season ++ Change in inventory policy 3 Problem Recommendation Analysis Alternatives Q & A Conclusion

Major Risks (Kanako Tone) Mitigation Short term Higher transportation cost Build better relationship with logistics company (volume discount) Mid term -1 Quality control over vendors Negotiate return policy Enhance quality policy Mid term -2 Quality issues at retailers Incentivize retailers to have better freezing facility Target modern supermarkets (FDI) Dilution of Brand Image Educate customers (marketing) Pricing strategy Long term Manufacturing and storage capacity Expand new facilities strategically Higher distribution costs Problem Recommendation Analysis Risks Q & A Conclusion

Implementation (Shu-Yu Hsueh) Phase 1 (year 0-1) Negotiate with distribution providers Advertise and/or discount during off-peak seasons Phase 2 (year 2-5) Agreement with retailers Target FDI companies Change vendor policy Ensure material quality control Phase 3 (year 5+) Expand eastwards Major commercial centers Problem Recommendation Analysis Implementation Q & A Conclusion

Conclusion (Shu-Yu Hsueh) Geddy’s stocking issues can be solved by restocking more frequently Centralized ordering and production is easier to ensure quality, but limits Geddy’s expansion potential Problem Recommendation Analysis implementation Q & A Conclusion

Thank You Problem Recommendation Analysis Alternatives Q & A Conclusion