Assignment (Case Studies)

Sameerha Alamlki
ID: 2202041

BUS-605 Operations Management

Prof. Nadia Yusuf

Prof. Nadia Yusuf

 Case Study 1 - Cadbury Schweppes Production Method (5 Marks)

Cadbury Schweppes is a multinational soft drink (beverages) and confectionery business that is based in the UK.
The business is a public limited company. It is involved in the manufacture, marketing and distribution of its many
branded products. Cadbury Schweppes now employs over 40000 people, and its products are available in almost 200
countries. The company’s products can be divided into:

 Beverages (carbonated soft drinks and non-carbonated soft drinks (waters and fruit juices)
 Confectionery (chocolate products, sugar products, chewing gum)

Much of Cadbury Schweppes’ manufacturing still takes place in the UK, Australia and North Africa. However,
in the 1990s the company moved some of its production to Russia, Poland, Argentina and China, countries with
emerging economies.

To satisfy most of its shareholders, Cadbury Schweppes’ has set out a strategy to help achieve its objective. This
strategy consists of:

 Creating strong regional positions through organic growth, acquisitions and disposals
 Developing strong brands through marketing
 Expanding its marketing share through innovation in products and packaging
 Regularly updating its product portfolio Production

Despite manufacturing its goods in large quantities, Cadbury Schweppes uses batch rather than flow production
methods. The company must ensure the products are of high quality. Not only are there strict laws about how
foodstuff is made, but also Cadbury Schweppes would not want to damage its reputation by allowing inferior
products to be sold.

Cadbury Schweppes undertakes extensive research and development (R&D) to develop new products and to find
ways of manufacturing existing brands more efficiently. Cadbury Schweppes uses the services of a specialist R&D
business based at Reading for its UK confectionery business.

In the case study it is stated that Cadbury Schweppes uses batch production methods to make its products and that it
is important the products are of high quality.

Based on the information provided:

Prof. Nadia Yusuf

 describe the differences between batch and flow production.

batch production is used when a group of identical products pass through one production process
together , before moving on to next ... Flow production is continuous , conveyor belt method of
production where functions are performed one by one on each unit 

(a) critically evaluate the reasons why Cadbury Schweppes uses batch production when making
chocolate bars.

Because it can reduce initial capital outlay (the cost of setting up the machines) because a single
production line can be used to produce several products.  And also to be able to swap the moulds
around quickly to make different bars of chocolate to satisfy customer demand for certain bars.

(b) critically discuss which of the following two quality control methods would be better for Cadbury
Schweppes:
 checking samples of the products after they have been made
 making workers responsible for the quality of their own work

checking samples of the product Quality control methods are strategic procedures that ensure the maintenance or
improvement of a product's quality, which in the case of of Cadbury schwwps it’s the right thing to do

Because he is looking for the quality for his business , also Cadbury Schweppes would not want to damage his
reputation by

allowing inferior products to be sold.

Prof. Nadia Yusuf

 Case Study 2 - The Benetton supply chain (5 Marks)

One of the best-known examples of how an organization can use its supply chain to achieve a competitive
advantage is the Benetton Group. Founded by the Benetton family in the 1960s, the company is now one of the largest
garment retailers, with stores which bear its name located in almost all parts of the world. Part of the reason for its
success has been the way it has organized both the supply side and the demand side of its supply chain.

Although Benetton does manufacture much of its production itself, on its supply side the company relies heavily on
‘contractors’. Contractors are companies (many of which are owned, or part-owned, by Benetton employees) that
provide services to the Benetton factories by knitting and assembling Benetton’s garments. These contractors, in turn,
use the services of sub-contractors to perform some of the manufacturing tasks. Benetton’s manufacturing operations
gain two advantages from this. First, its production costs for woolen items are significantly below some of its
competitors because the small supply companies have lower costs themselves. Second, the arrangement allows
Benetton to absorb fluctuation in demand by adjusting its supply arrangements, without itself feeling the full effect of
demand fluctuations.

On the demand side of the chain, Benetton operates through a number of agents, each of whom is responsible for
their own geographical area. These agents are responsible for developing the stores in their area. Indeed, many of
the agents actually own some stores in their area. Products are shipped from Italy to the individual stores where
they are often put directly onto the shelves. Benetton stores have always been designed with relatively limited storage
space so that the garments (which, typically, are brightly colored) can be stored in the shop itself, adding color and
ambience to the appearance of the store. Because there is such limited space for inventory in the stores, store owners
require that deliveries of garments are fast and dependable. Benetton factories achieve this partly through their
famous policy of manufacturing garments, where possible, in greggio, or in grey, and then dyeing them only when
demand for particular colors is evident. This is a slightly more expensive process than knitting directly from colored
yarn, but their supply-side economies allow them to absorb the cost of this extra flexibility, which in turn allows them
to achieve relatively fast deliveries to the stores.

Answer the following question

a) Draw out the benetton supply chain and identify the major operations objective of Benetton’s
retail operations, Benetton’s physical distribution operation and Benetton’s factory and its
suppliers.

supply contractors Demand Retail stors

side
side

Sub -contractros agents

Prof. Nadia Yusuf

Operations Objectives for Manufacturing and supply operations is

Quality of products , Speed of response ,Flexibility (through the ‘dyeing in grey’ process,Cost

Physical distribution operations

Speed of response ,Dependability of deliver, Cost of transportation process

Retail operations

Sales

- space productivity

- staff productivity

- stock productivity

Image of store

Brand

Quality of service

Prof. Nadia Yusuf

b) How well do these three inter connecting sets of operations fit together? Explain your reasons.

I think every successful brand need a strong supply chain like the case of Benetton
The contractors play a major role pay saving a cost

can be invested in the ‘dyeing in grey’ process which is more expensive than knitting the
garments from colour yarn

when we talk about the flexibility the dyeing process allows operations to respond quickly when it
gets orders to replenish stocks in its warehouse.

This previous step allows the physical distribution operation to respond quickly to the orders
placed by the retail operation.

So the retailers going to operate without storerooms, keeping all their (limited) stock on the
shelves.

This has earned them some advantages , first it saves the storeroom space so that all the shop
space can be used for selling. And gives them un excellent space productivity. Especially
when it come to the staff in the store by saving the time for them , they don’t have to run to the
storeroom to check on stock and this gives good staff productivity. Also because there is
relatively little stock kept in the shop, the shop owner does not have to fund the working
capital to keep the stock there fore gets good stock productivity.

Also the image of the store itself is enhanced by having all products on display (the United
Colours of Benetton),This enhances the brand image.

Overl all I think Benetton’s communication campaigns played an important role in establishing
its brand identity. And al so the quality outfits, in the respect of the environment and with the goal
of creating a brighter future for all human All of these elements contributed to the success of the
brand..

Prof. Nadia Yusuf