Assignment 1

Consider the purchase of a specific bottle of soft drink produced in Ghana at your LOCAL
convenience/corner store. Describe the various stages (or what happens) in its supply chain
AND the different flows involved.

Introduction

Blue Skies fruit drink is a locally processed fruit juice prepare from the ripest, sweetest fruits and
into delicious ready-to-consume juices/drinks. The product is produced by Blue Skies Company
Limited. Due to the high perishability and short shelf-life nature of Blue Skies drinks, highly
effective management of its supply chain is necessary. In this paper, the major stages and flows
along the supply chain of Blue Skies drinks is discussed.

Stages in the Supply Chain of Blue Skies Fresh Drinks

The purchase of a bottle of Blue Skies drink includes the following stages of the supply chain:
supplier of the raw material for the drink, producer of the drink, distributors of Blue Skies, retail
of Blue Skies and the consumer of Blue Skies.

The suppliers of the raw materials for the production of the Mango Blue Skies drink are local
fruit farmers who are contracted by the mother company, Blue Skies Co Ltd to supply fresh fruits
from their farms to the company’s warehouse at Nsawam. The company source pineapple,
mango, passion fruit, papaya and coconut from farms in Ghana, which are usually at the
Southern part of the country. The farmers are well vetted and trained before allowed to supply
fruits to the company. The company has invested in organic methods of production and has setup
an association of small-holder organic farms called the ‘Blue Skies Organic Collective’ (BSOC).
The company have achieved ethical trade organic certification through the Soil Association for
the BSOC and a small group of commercial farmers. The company also about 70 acres of land in
Ghana which is being converted to an organic demonstration farm to educate farmers throughout
the region about the benefits of organic farming and to teach farmers what is required to achieve
accreditation. This 70-acre farm is also another significant source of raw materials for the
production of Blue Skies fresh drinks.

Blue Skies Co. Ltd is the producers of the Mango Blue Skies drink. The drinks are produced at
the company’s factor at Doboro, Nsawam in the Eastern region of Ghana.

Distribution of Blue Skie drinks is done by the company’s logistics unit, where products
manufactured at factory are transported directly to retailers, both internationally and locally.
International distributions are done using Blue Skies Ghana airport hold for movement using
refrigerated trucks since the produce is fresh and highly perishable. Locally, distribution is done
with refrigerated trucks to the depots of various retailers in Ghana. The company also has their
own stores or joints where retailers employed by the company are supplied products to be sold to
customers. (Aryee-Atta, 2019)

The retailers of Blue Skies drink constitute independently-owned supermarkets and grocery
stores across the country. Some of these retailers have depots where packaged bottles of drinks
are sent by the distributors, to be collected by the retailers. Because Blue Skies is a freshly made
drink with no preservatives and short lifespan of 48 to 72 hours without refrigeration (Aryee-
Atta, 2019), the products are mostly shelved in refrigerators at the retailers center as soon as they
are delivered by distributors.

Consumers are individuals like the author of this paper, who purchase the Blue Skies drink at a
local supermarket in Osu.

Different Flows within the Blue Skies Supply Chain

The following flows are involved in the purchase of the bottle of Blue Skies drink: flow of
materials, flow of information and flow of funds. The primary material involved here is freshly
cultivated fruits, which are processed into fruit juice for consumption. However, other secondary
materials flow along the supply chain which include the acquisition of plastic materials for the
bottling of processed juice, as well as paper materials for labelling. At the supplier stage, there is
also the flow of agri-products from the company to farmers to facilitate organic and great yield
of fruits. (Aryee-Atta, 2019)
Another element that flows along the supply chain at the purchase of the bottle of Blue Skies is
information. At Blue Skies, knowing where the fruits come from is one of the best ways that the
company can ensure that it reaches the highest standards of quality in the production of its
natural fruit drink (Blue Skies, 2010). There at each of the company’s sites they have a full-time
team of agronomists whose job it is to work with the farmers (suppliers) to make sure the
company standards are met. Blue Skies was the first company in the world to achieve EurepGAP
certification (now GlobalGap) for a group of farmers in Africa, who were their suppliers. The
flow of information about the source of raw materials (fruits) helps the company maintain high
quality standards of its products. Another information flow critical to the production of Blue
Skies fresh drinks is the location of their processed products. The company in 2007 launched an
online traceability system called ‘Caretrace’ which allow its customers to find out more about
where their products are. This way logistiscal information flows from the producers to the
retailers or consumers. Consumers also receive information about the content of the drinks being
consumed from the labels on the bottle. (Blue Skies, 2010)

The last element that flow along the supply chain of Blue Skies is funds. Funds are released from
the mother company to its suppliers on contract basis, to secure raw materials. The
producers/manufacturers also release funds to purchase and service equipment used for the
production. Using the cost of purchase of raw materials and cost of production, a unit cost of
each bottle is determined for retailers. The retailers after paying for their orders also determine
the selling price by adding additional service cost such as cost of running the store, which is paid
by the consumer.

Conclusion

The stages and flow within the Blue Skies fruit drink has been discussed in this paper. In this
discussion can be found key elements of the supply chain process which is important for a high
performance of a company’s products. Some of these elements, which were not the focus of
discussion include the importance of communication management, financial management and
procurement management in the supply chain management of Blue Skies.
References

Blue Skies (2010). Making fruit happy. Blue Skies Sustainability Report 2008/2009

Aryee-Atta A. N. (2019). Assessing the supply chain management practices of agrifood

companies to minimize waste: a case study of Blue Skies Ghana limited. European Journal of
Logistics Purchasing and Supply Chain Management. Vol.2, No. 1, pp.1- 16, March 2014