Case Study

Yummy Inc. Yummy is a medium size confectionary manufacturer. They produce and distribute a whole line of chocolate candies that compete successfully with industry giants like Nestl and Cadbury. Yummy has established a world-class supply chain that has responded effectively to huge market demand in different countries worldwide, with high service levels, and enjoys a decent profit margin in an intensely competitive environment. Like Nestl and Cadbury, Yummy manufactures candies in many different locations worldwide to satisfy the enormous consumer demand. The candies are then shipped to regional DCs, and distributed to the local retailers using 3PL service providers Yummy has just launched a new line of business in specialty gourmet chocolates. The global premium chocolate market was valued at USD 29 billion in 2020, projected to witness a CAR of 9.20% during the forecast period (2021 - 2026). The company distributes gourmet chocolate to selective specialty retailers using its existing supply chain network for chocolate candies. Somehow, the executives thought there is no difference between these 2 product lines, chocolate candies and gourmet chocolate were just chocolates. At their recent quarterly business review meeting, the VP of the gourmet chocolate division reports enormous losses, with massive inventory write-offs and poor customer service. The division needs help to meet the rapidly changing consumer tastes.

Questions: 1) Explain why the gourmet chocolate division is incompatible with the chocolate candies supply chain 2) How would you re-design the gourmet chocolate supply chain to satisfy the requirements for best customer service and low inventory obsolescence and return the business to profitability? (10 3) Identify the push-pull boundary of the chocolate candy supply chain. Where will the push-pull edge in your re-designed gourmet chocolate supplychainbe?