Supply Chain

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1. Executive summery
Eight years ago Ceylon Biscuits started its wholly owned subsidiary, CBL Foods International (Pvt.) Limited to manufacture Tiara cakes, Ritzbury Chocolates, and part of the “Munchee" range of biscuits. These brands are the market leaders in their respective categories in Sri Lanka. Successful supply chain management coordinates all of the partners such as departments within the organization, and the vendors, carriers, third party companies, and information systems providers. The Objective of the study is to investigate the company’s supply chain/network in view of assessing whether it is as up-to-date as it could be according to the latest views on supply chain management. The key areas such as Supply Chain framework, Management of uncertainty & inventory management, Supply chain integration and IT applications in the supply chain were areas subjected to the study.

Given the complexity of the operations of the company with wide variety in the product portfolio and the often conflicting objectives of the various business divisions, such as marketing, distribution, planning, manufacturing and purchasing, it is imperative to have a and rigorous supply chain frame work for capturing the various synergies and trade-offs involved in the business. Therefore it is suggested to reduce the span of rolling forecast from four months to three months and do the material planning to minimize the complications due to uncertainty. Ideally the company should have the inventory items (whether they are local items or imported items), with respect to their lead times. At the same time company shall negotiate to reduce the minimum order quantities to achieve positive results. It is noted that the supplies department uses their own tacit knowledge to manage the uncertainty and the inventory of critical items, which is commendable.

CBL foods supply chain is integrated both backward and forward. Company has not achieved the set objectives of the ERP system such as reduction of the inventory etc. The supply chain of CBL Foods is not ad hoc, it is organized, integrated, and extended and it is as up-to-date as it could be according to the latest views on supply chain management but could be improved based on the recommendations made.

2. Back ground
2.1 The company
Ceylon Biscuits Limited as a group is the largest conglomerate in the country manufacturing and marketing a wide range of food products such as Biscuits, Chocolates, Cakes, Soya products, Organic fruit products and Ready to eat jellies, The entire group has provided direct and indirect employment to over 15,000 people and has a turnover in excess of Rs. 25 billion. It is a Company that has achieved phenomenal success, both in its corporate growth as well as in its fulfillment of social responsibility. Ceylon Biscuits was initially founded to manufacture high-protein biscuits to supplement midday meals for school children under a joint program between CARE International, USA and the Sri Lanka Government. The excess capacity from this led to the launch of the brand, “Munchee”. Over the years, a number of other innovative products were also introduced, such as Hawaiian Cookies, which were not previously available in Sri Lanka as well as generic products such as Marie Biscuits and Cream Crackers. Eight years ago Ceylon Biscuits started its wholly owned subsidiary, CBL Foods International (Pvt.) Limited to manufacture Tiara cakes, Ritzbury Chocolates, and part of the “Munchee” range of biscuits. These brands are the market leaders in their respective categories in Sri Lanka. Factory has state of the art machinery to manufacture above products and has the capacity to produce 500 tons of cakes, 500 tons of chocolates and 1500 tons of biscuits a month. CBL Foods International is a Rs. 500 million a month turnover company, and has a work force of around 750. Due to the wide variety of products manufactured, company operates with 150 items of raw material,...
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