E. INTEGRATION ISSUES

Comprehensive Map of Cadbury Supply Chain

Cadbury's level of integration using 9-step framework:

Step 1: Identifying critical supply chain trading partners

Cadbury has key trading partners which are both in the supply side and operation side. On the supply side critical supply chain trading partner are cocoa manufacturers, milk companies and sugar companies. On the operation side, critical supply chain trading partners are logistic companies, distribution center and retailers.

Step 2: Review and establish supply chain strategies

Supply chain strategies of Cadbury revolve around quality and sustainability practices. Cadbury is competing based on quality of product at reasonable price and formulate these strategies with supply chain members also. It helps cocoa farmers with proper training so that high quality cocoa can be produced. Thus, suppliers (farmers) adopt to the strategies consistent with delivering high-quality products at competitive price. Also, products of cadbury are also competing based on sustainability where its strategies involve policies aimed at achieving favorable environmental impacts or carbon footprints by reducing frequent transportation of goods. Manufacturing facilities in Australia and other locations are always looking at reducing environmental impact either by using solar energy or using less water as compared to the previous usage. Cadbury lacks in the process of IT infrastructure which can affect the demand forecasting of the products resulting in increased or reduced inventory resulting in bullwhip effect.

Step 3: Align supply chain strategies with key supply chain process objectives

Cadbury shall link its supply chain strategy with all the supply chain trading partners through use of information technology tools such as demand sensing and transportation forecasting solution.

Step 4: Develop internal performance measures for key process effectiveness

Cadbury has major internal performance measurement ideas in place to collect and report internal performance data for the key processes such as quality of the product.

Step 5: Assess and improve internal integration of key supply chain processes

Cadbury supply chain management shows process coordination and collaboration internally between the firm’s functional areas i.e. demand side as well as externally between the firm and its trading partners i.e. supply side.

Step 6: Develop supply chain performance measures for the key processes

Different performance measures are developed at the key supply chain processes of Cadbury. For the customer relationship management process, performance measures are linked to average delivery cost, rush order cost, VMI carrying cost, finished-goods safety stock costs, returned order costs, and spoilage costs.

Step 7: Assess and improve external process integration and supply chain performance

Over time, firms eliminate poor-performing suppliers as well as unprofitable customers while concentrating efforts on developing beneficial relationships and strategic alliances with their remaining suppliers and customers. Building, maintaining, and strengthening these relationships is accomplished through use of external process integration. As process integration improves among supply chain partners, so too does supply chain performance. When firms have achieved a reasonably good measure of internal process integration, they are ready to move on to externally integrating key supply chain processes with trading partners.

Step 8: Extend process integration to second tier supply chain partners

supply chain relationships is more mature due to its long history in the market. However, due to its take over by Mondelez International, trust factor in the supply chain in unknown. Thus, Mondelez has a task at hand to to integrate supply chain using IT software. This process of integration will be beneficial for its integration processes to second- tier partners and beyond such as sugar farmer, milk producers and end customers which will provide detailed information on product designs, demand forecasts, purchases, sales, and inventories. This will provide real time action advantage and increase the its competency and profit share of the market.

Lee's Triple-A Supply Chain Model:

• Agility : Cadbury has highly responsive supply chain which responds quickly to the change in demand. It has invested in the demand management system which gives it a real time scenario for the demand of the product. To minimize delays and excessive inventory, Cadbury has tied up with the forecasting solution provider which also provides real time data of the logistic team.
• Adaptability : Cadbury has a been able to adapt and survive for years in the competition from decades. Yet, Cadbury has not been able to reach market of USA which shows it failed to adapt in the American market. Also, cadbury is struggling at its manufacturing in Hobart which laid off 50 workers recently and also closed the Cadbury factory visit. This is mainly due to rising cost of business in Australia.
• Alignment : Cadbury has good integration and collaboration across the supply chain and has converted many suppliers into partners through various programs. Its contracts with its partners give win win situation to both the parties and share shares risks and rewards.