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Sunday, 8 November 2020

Logistics and Supply Chain Management in Chocolate Industry

Logistics manages the transportation and delivery of  the final products from the site of manufacture to the hands of  final consumers. A supply chain is an organization of systems or associations engaged with the worth addition measure in each stage before an end result is shaped lastly and conveyed to the hands of definite buyers. The entire flexibly chain cycle can be planned to get a snappy visual reference of the progression of crude materials from hands of raw material providers to the hands of manufacturers and afterward the progression of finished products to the hands of the customers. This report analyzes the various stages of a supply chain and logistics. The relationship between each of the stages has been studied. For the purpose of analysis the supply chain mapping of chocolate industry has been taken. The supply chain map of a chocolate industry is as given below.

Fig: Supply chain map of a chocolate industry

At first we can have a look at various stages in a supply chain map. The main raw material for the production of chocolate is cocoa. Cocoa is mainly grown in Western African countries. These cocoa beans are imported from these tropical countries. The beans are collected from the farmers and stored. They are transported to harbors, from where they are shipped to other continents or countries. The coca shipment is received at the respective country' harbor. From there the cocoa beans are transported to the preprocessing centers. At these centers the cocoa is separated to cocoa butter and cocoa mass. The cocoa butter is the main requirement for the chocolate manufacturing process. The butter mass is transported to the chocolate production centers. The butter mass along with sugar, milk powder and vanilla is used to make the chocolate. We should also look into the issue of procurement of these raw materials in addition to cocoa. Milk powder and sugar are often available with local suppliers. So we can obtain this from such suppliers, and hence reduce the transportation costs. Vanilla is not available in all local markets and they may be imported like cocoa beans. After the production process, they are packed and transported to the storage centers. From there they are delivered to distribution centers. From distribution centers they are taken to supermarkets and shops, from where the products finally reach the hands of consumers. Logistics deals with taking the finished products to the consumers. It is not an easy task. For proper working the logistic function we need to have an idea about the local markets, people' tastes, customs duties information's and lots of similar data. The mapping of supply chain operations increases the visibility of each entity in the chain. It helps us to recognize the risk factors and make adjustments accordingly.

 

Importance of Logistics in Chocolate Industry


The chocolate industry is growing at a faster pace in the recent times. The increasing demand for chocolate in the overseas markets are providing an opportunity for the chocolate companies. They are spreading their business to new horizons rather than remaining stagnant in the already existing markets. They have become less dependent on the local markets. The logistic play roles can provide an information about local market demands and opportunities. They can also help in clearing the customs formalities. Since chocolates are perishable food item, they need a quick, timely and safe transportation to the destinations. Logistics is extremely important for such delicate items. We can have a quick look of the need for an efficient logistic system for the chocolate industry.


1. Transporting safely and securely


Chocolates are very delicate in nature and so they should be delivered in time and safely .While transportation it should not be affected by humidity or high temperature. It will degrade the quality of chocolates. To  ensure that the chocolate is transported safely and arrive on time, make sure you choose a reliable logistic  provider.


2. Meeting and maintaining customer demand


To meet the customer demand, timely delivery of products is essential. On certain occasions like local festive seasons, chocolate demand can go up. The logistic mechanism should be flexible enough to work extra for meeting such demands. The logistics provider can also provide us with local market demand data. The products should also be immaculately clean and free from contamination while sending over long distances.


3. Customs duties and regulations


The ever changing duties and taxes can be tiresome for the manufacturers for import of raw materials as well export of finished products. The calculations can be quite challenging, especially in the food products industries. The logistic providers can update us with the latest customs duties and regulations.


4. Choosing the right markets


The logistics experts can provide us with some useful data and advice or opinions Their knowledge and experience can prove invaluable for both short and long-term decision making.


5. Language barriers


Communication is an important aspect throughout the supply chain. When shipping overseas, language barriers can provide with difficulties in tracking the product chain. By ensuring good ground support and local we can avoid any potential challenges of this nature.

 

Importance of Supply Chain Analysis in Chocolate Industry


Supply chain analysis helps in delivering the desired product to the right people at the required time. The activities starting from purchase of raw materials, production and transportation is analyzed by mapping of supply chain. It helps in easy analysis to identify the risks and make improvements in the production and marketing process. The supply chain analysis has following advantages in a chocolate industry.

 

1. Recognize the risks and visibility


By mapping the supply chain and making an analysis, we get an idea about the providers of raw materials, manufacturing and transportation. So we can analyze the potential risks created by each entity in the chain. The ignorance about a higher or lower tier is removed. In case of chocolate production, the availability of cocoa beans is an important factor. Famine or other natural disasters in your producers' area can create a shortage of cocoa beans and affect the production adversely. So if you know about your producer's, you can be alert about the existing conditions and look for other alternatives. So it is important for the manufacturer to know about each entity in the supply chain. So for better visibility we need to create a global supplier database if we have to look for an alternative in case of an emergency. The inflations can be helpful in creating a long term relationships with the suppliers and this can help in getting the raw materials even when the sources are scarce.


2. Build a map


The most effective way of analysis of material or product flow is to mp the supply chain. Similar to a data flow diagram it shows the each stage in processing. We can have a quick reference of the processing and marketing from the mapping. Relevant data is required from each stage of supply chain to make a reliable supply chain mapping.


3. Work collaboratively


Supply Chain mapping can be a complex work. For a chocolate industry they have to track the suppliers of cocoa, vanilla and other raw materials. Different chocolate industries might be getting the raw materials from common providers. So by sharing such non sensitive information can be helpful in creating supply chain maps.


4. Supply Chain Management


Supply Chain management deals with sourcing, production, distribution and transportation. They also provide inputs to data collection, business administration, optimization of process etc. The members of supply chain operation management members need a variety of skills like good communication ability, strong problem solving and analytical ability and in depth business knowledge.


The supply chain can be complex. The cocoa providers informations are often incomplete. The indirect supply chains can provide us with difficulties in data collection. The data collection process is tiresome especially in case of import and exports. The chocolate industries raw material cocoa is often imported from Western Africa.

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