Supply Chain---Tingtao Beer

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Course Code: OMGT 1021
Course Name: Supply Chain Principles
Date of Submission: 13/10/2006

Executive Summary4
1. Introduction6
1.1 Investigation6
1.2 Objectives6
1.3 Assumptions7
1.4 Scope7
2. Current Situation8
2.1 Tsingtao brewery-marketing and business strategy8
2.2 Tsingtao brewery-supply chain policy and strategy9
2.3Tsingtao brewery-supply chain management…………………………………………….11 3. IssuesIdentified12
3.1 Distribution network12
3.2 Information flow13
3.3 Inventory level14
4. Analyses15
4.1 SWOT Analyses---the current situation of Tsingtao beer supply chain15 4.1.1 Strengths:15
4.1.2 Weaknesses:15
4.1.3 Opportunities:16
4.1.4 Threats:16
4.2 GAP Analysis--- Tsingtao beer’ supply chain17
5. Recommendation20
5.1 Putting the retailer first20
5.2 Looking across the fences21
5.3 Shifting the gear in racing relationship21
5.4 Some proposals for bridging the gap22
5.5 Centralization, streamline distribution and logistics22 5.6 IT as an enabler and support supply chain22
6. Implementation23
6.1 Break down the existing distribution networks and cut off the second tier23 6.2 IT as an enabler to help create forecasting24
6.3 Reduction inventory level25
6.4 Schedules26
7. Conclusion27

Executive Summary

Tsingtao Brewery is the most popular beer industry in China. How to improve the supply chain management in Tsingtao Group has become a necessary issue today. Tsingtao Brewery overall strategies focus on ‘keeping fresh’ and Just In Time delivery.

This report provides the background on Tsingtao Brewery and South Chain Division in China perspective. Through several researches with Tsingtao Brewery, this report identifies the current issues associated with supply chain management. These issues are further analyzed through a SWOT and GAP analysis. This highlights those areas within the current supply chain management system that need to be improved on.

The main areas identified within the supply chain system (at South China Division of Tsingtao) were distribution network, information flow and inventory level. This report therefore makes further recommendations on logistics specific strategies to address these issues. The recommended strategies include: retailer, relationship, IT and distribution center. It is anticipated that the recommended logistics strategies will improve Tsingtao supply chain performance and enhance its competitive advantage in the future.

1. Introduction
1.1 Investigation
Tsingtao Brewery is the largest brewer in China, involved in the manufacture and distribution of beer and related businesses. Founded in 1903 by German settlers, it claims about 16.2 % of domestic market share. Given the shelf size of this organization in China scale, the focus of this report is the South China Division located in Shenzhen which is the main division (turnover $3.5bn) of Tsingtao Brewery (Wikipedia 2006). It is anticipated that the supply chain strategies recommended in this report could be easily applied to any other Tsingtao Beer brand in China. The information collected to drive the study is based on primary and secondary sources. Primary sources of information refer to E-Survey with logistics manager in South Chain Division. Secondary sources are public information of the company’s financial performance and also articles from specialized academic and professional publications and the Internet. Once sufficient information was gathered, this information was analyzed and comprehensive strategies developed to improve the current supply chain management system at Tsingtao Brewery.

1.2 Objectives
The objectives of this report were to analyze the current supply chain management system at South China Division and identify any areas of weakness in the system. Once this analysis was complete, specific supply chain strategies were...
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