B. SUPPLY ISSUES

COCOA:

Cocoa beans are the main ingredient in the chocolate. Cadbury sources Cocoa beans from Ghana in West Africa as well as part of South East Asia where Cadbury has sustainable methods in place called Cocoa Life Program for the sourcing of Cocoa. Cocoa Beans are transported into truck to Ghana Port where they are packed into container and then a container ship transports cocoa beans to the Port of Singapore where it arrives in the processing factory via trucks. In the processing factory in Singapore different products are made such as Cocoa Mass, Cocoa Butter and Cocoa Powder. These refined products are the transported to the Singapore Port by Truck and then further to Port of Melbourne in a container ship via sea.

SUGAR:

Farmers harvest sugarcane which is major crop in Queensland. These sugarcane are cut into billets and then sent by truck to the sugar mill to make raw sugar. Raw sugar is stored into big terminals until it is needed by refineries for the processing.

MILK:

Milk is sourced mostly from Victoria. Cows from dairy farm are milked twice a day and then fresh milk is stored in refrigerated Silo for maximum 48 hours from where it is sent to the processing factory for pasteurizing and homogenizing. Treated milk is then stored in the refrigerated silo and then transported by refrigerated tanker to Port of Melbourne.

Thus all the raw material including processed cocoa, sugar and milk is transported from Port of Melbourne to Cadbury factory in Tasmania.

Supply market and importance of sourcing items

According to Kraljic matrix (1983), Cocoa and Milk can be termed as Strategic Item as supply risk and profit impact are high and it also affects quality of the products. These raw materials have major role in all the product of the Cadbury and its quality will directly affect the end product leading to customer attraction and retention of existing customer. Other items such as sugar, flavored food items and wrappers can be considered as Leverage item since they are standard product in the market and has high financial impact with minimum supply risk with many suppliers available in the market.

Supply-related challenges:

There may be event when due to bad weather, Cocoa will be infested with pests and it will require further processing or complete cocoa plantation will be destroyed which can happen due to bad weather and lack of training farmers in Ghana or other sourcing countries. Milk quality can be affected if the transportation glitches happens such as increase of temperature in refrigerated truck. This may lead to complete waste of the particular supply of milk and will affect the revenue resulting in loss.