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Transcript of Home Breads
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Acknowledgement
On the very outset of this report, we would like to extend our sincere & heartfelt
obligation towards all the personages who have helped us in this endeavor. Without
their active guidance, help, cooperation & encouragement, we would not have made
headway in the project.
We are extremely thankful and pay our gratitude to our faculty Mrs Richa Agarwal
for her valuable guidance and support on completion of this project.
We extend our gratitude to Auro University for giving us this opportunity.
At last but not least gratitude goes to all of our friends who directly or indirectly
helped us to complete this project report. Any omission in this brief
acknowledgement does not mean lack of gratitude.
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Index
Sr no. Particulars Pg. no.
1 Introduction 3
2 Supply chain of Home Breads 4-6
3 Inventory management 7-8
4 Forecasting 9
5 Locational decisions 10
6 Transportation 11-12
7 SCM integration , Outsourcing 13
8 Recommendation 14
9 Harvard Referencing 15
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Introduction
Home Breads Is a unique bakery-café started in Surat 20 years back, with the desire for mouth-
watering pastries. They quickly established themselves with delightfully tasting pastries, among
which, is the now famous 'black forest pastry'. These pastries also come in other flavors such as
'pineapple', 'butterscotch' and 'Strawberry'. These have quickly become customer favorites. Word
rapidly spread across town and ultimately people were raving about the wonderfully moist and
delicious fresh cream layered pastries. A dedicated following of customers came daily for their
oven-fresh baked variety Breads, croissants, puffs and buns.
With a strong following of satisfied customers, Home breads is more than just a familiar name
to customers, as many folks from all backgrounds have come to enjoy their wide range of products
and snacks. Home Breads has many treats to please your palette. Their goal is to deliver the best
'comfort food' to customers. It will bring a smile upon your face and a taste so simple, yet
unforgettable. When it comes to baking, their bakers are dedicated to the highest standards of
quality, delivering freshly made products from scratch in our kitchen on premises. Their
professional bakers and confectioners are skilled in the art of baking and decorating and bring you
exquisite designed cakes to match every occasion, whether it's a wedding or a birthday celebration.
Their staff begins their day early in the wee hours of the morning, preparing fresh Breads,
croissants, puffs, buns and cakes at sunrise. The aroma and taste speaks for itself. Home breads,
time stands still when you are enjoying their treats, except for their staff who are working
continuously to make your experience at our bakery-Pastries an unforgettable one.
The Business is owned by Mr. Anil Tibrewal who has 20 years of experience in the bread
manufacturing business. There are 25+ employees at their stores and Mr. Tibrewal’s son helps him
with the management of the same.
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Supply Chain Management
The products are available to the consumers at stores at 3 locations in the city.
Home bread has limited number of suppliers. Mr. Tibrewal says that all the raw material reaches
their ghoddod road branch every night on time. Thus states that efficiency of the back end
suppliers.
The manufacturing takes place in the back kitchen of their ghoddod road branch at 4am every
morning. Home breads provides almost 100 varieties of bread at their shop. It takes 2 Hours for
the baking process. Home breads believes in fresh supply thus manufactures bread every morning
for daily stock and supply at their shops.
VendorManufacturing
unitStores Customers
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Supply of imported and packaged products: -
Home breads provides hundreds of imported chocolates from around the world imported by
themselves as an agent on the Mumbai port. The supply of those products is done by manufacturers
from around the world. The owner uses the online portals by the companies in order to source the
products. Also various products such as Ferrero rocher chocolate and many other which are now
manufactured in India are now directly sourced from local agents of the products.
Type of Supply chain
MTO
This strategy still is for standard products which have a clearly defined specification. Other than
MTS, there is absolutely no forecast on products which are made to an order from a customer. You
start production after the customer’s request comes in and not, like with MTS, beforehand.
MTS
When your product is a commodity that can be sold out of a catalog and is defined and specified
through a master record, it can be planned; if it is somewhat predictable. A steady consumption in
the past helps predicting the future, however, there may be events in the future which require a
more forward-looking planning process.
In any case, if you can somewhat predict what will happen, you may consider a Make to Stock
strategy. Even if it is hard to predict the future, but the customer does not accept long delivery
times, you might be required to make some of your product to stock.
Manufacturer Stores customer
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Making to stock means production without actual requirements. The Sales Order does not drive
the production program but the forecast does. Incoming Sales Orders use existing inventory for
the delivery which keeps the customer lead time to a minimum.
HB fulfils its order delivery lead time through MTS (make to stock) process and Make to order
process in case of customised cakes or cakes on order. Breads and imported packaged goods are
make to stock items which derive customers according to their need/requirement whereas cakes
are customized according to the need of the customers thus are a Make to order Product.
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Inventory Management
Min-Max method
The management at Home Breads uses the Min Max method in order to maintain the supply of the
products. Home Breads feels the proper number of stock to maintain is 6 for each and every product
at their store. The order of 4 More is placed as soon as the stock reaches from 6 to 2.
Cycle Inventory
Cycle stock inventory is the portion of an inventory that the seller cycles through to satisfy regular
sales orders. It is part of on-hand inventory, which includes all of the items that a seller has in its
possession. For example, a retailer's on-hand inventory would include the items on store shelves
as well as most of those in a store room or stock area. Over time, cycle stock inventory refreshes
itself, or turns over, as new items replace older ones that are sold. Home breads manufactures only
according to the daily demand of the city. Thus the bread stock cycles each and every day on their
stores.
0
1
2
3
4
5
6
7
Chart Title
Stock Safety Stock
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Safety Stock
Safety stock (also called buffer stock ) is a term used by logisticians to describe a level of
extra stock that is maintained to mitigate risk of stock outs (shortfall in raw material or packaging)
due to uncertainties in supply and demand. Home breads keeps extra stock at a warehouse at bhatar
road, just 2-3 kms from their ghoddod road outlet. Mr. Tibrewal explains that they have to order
extra stock from the online websites as it takes 45-150 days for the products to reach to the stores.
The companies outside India do no entertain small orders thus Mr. Tibrewal has to order in
consortium with 2-3 importers of other cities of India so that they don’t have to stock too much
money as stock/inventory.
Seasonal Stock
Seasonality is a characteristic of a time series in which the data experiences regular and predictable
changes which recur every calendar year. Any predictable change or pattern in a time series that
recurs or repeats over a one-year period can be said to be seasonal. Home breads uses seasons in
order to understand the demand of the market every month thus they ensure high stock during the
seasons which provide high sales.
Functional Products
Functional products are staples that people buy in a wide range of retail outlets. Typically, they
do not change much over time, have low profit margins, stable predictable demand and long life
cycles. Home breads deals in breads and imported food consumer foods thus deals in the the
functional products category. Though the margin on the imported products is very high against the
feature of low margin in case of functional products. At the same time it is also not possible to
have a stable predictable demand for the imported products as they are very highly priced and do
not exist on the average consumption chart of 95% of the people in the city
http://www.investopedia.com/terms/t/timeseries.asphttp://www.investopedia.com/terms/c/calendaryear.asphttp://www.investopedia.com/terms/c/calendaryear.asphttp://www.investopedia.com/terms/t/timeseries.asp
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Forecasting
Informed Judgment
A judgment is a decision we make about something that shows what we believe. To make
an informed judgment means making a decision about something based on information, not just
on feelings or what someone wants us to believe.
The management at Home Breads and also because of Mr.Tibrewal’s experience in the business
derives the demand of the month by using a combination of seasonal behaviors of the market and
the sale of the outlet in the same month/season last year. The reason of high sales during May-June
and end Novemeber-January was explained by Mr. Tibrewal as a result of wedding seasons
whereas low sales during March-April and October were board exams and City people on
vacations respectively.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Sales of Bread and Confectionary items
Sales of Bread and Confectionary items
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Locational Decisions
The manufacturing of the bread items takes place in the back kitchen of their main ghoddod road
outlet. Thus as explained by Mr. Tibrewal it saves them a lot of time and money. The demand of
the other two outlets is catered through the main kitchen itself.
When asked what if the demand of the city increases Mr. Tibrewal explained that presently it takes
2 hours of preparation and 2 hours of process in order to cater the present demand. He would
preferably choose double shift manufacturing in order to cater to high demand and presently has
not given a though about manufacturing someplace else.
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Transportation
As all the Manufacturing is done at the ghoddod road brand itself the product reached the shelves
of the ghoddod road branch as soon as the packing is done with. Whereas the demand of the other
two outlets is catered using 2 tempo trucks which leave for both the outlets every morning.
The demand of the other outlets is to be informed to the main kitchen every night so that the baking
takes place at 4 am in the morning.
Manufacturing
Parlepoint Vesu
Ghoddod
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Imported Products Transportation
The Imported goods reach the Mumbai port by ship from various locations that Home breads
orders from. Usually shipments arrive from USA and Singapore (Doritos). Mr. Tibrewal explains
that the products imported from USA are more highly priced as they are better in quality and have
high standards of food safety regulation.
The container that reaches Mumbai port is then transported through trucks to the warehouse of
Home Breads located at Bhatar from where the products hit the store shelves.
The Products sourced from the agents in India are directly received at the warehouse of Home
Breads at Bhatar.
Manufacturing Mumbai PortSurat
WarehouseStores
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SCM Integration
Home Breads management does not use any ERP software in order for supply chain management.
Mr. Tibrewal explains that it is not needed by them as they do all the stock management manually
i.e. using excel. Daily sales are recorded in books and stock is reduced in the excel sheet.
Outsourcing
Home Breads completely owns all the aspects required to run the supply chain. The company only
outsources the requirement of transportation of goods only when there is a catering demand byrestaurants or event management companies on various occasions.
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Recommendations
1.
Use ERP Software: - In the era of IT industry, Home Bread is still stuck with the
traditional methods of stock calculation and supply chain management. The results if the
company opts for an ERP software will be tremendous and will also decrease the load on
Mr. Tibrewal and his son of entering daily data on the excel sheets. Though they do use a
billing software but an ERP system will directly relate the billing to the stock ensuring
better accuracy and less workload for the management for stock and supply Management.
2. Use of Inventory Control Techniques: - Home Breads should use Inventory control
techniques such as ABC Classification or FSN Classification in order for better
understanding of the demand and supply. Both of these methods will provide them with
the products which they can segment in the priority area. The sales data provided by the
ERP Software and then the analysis using any of these 2 Techniques will also help them to
decide the percentage of import of particular products which are imported as it takes a long
45-150 days of time for the products to reach the stores.
3. Look for Manufacturing Unit: - Although Mr. Tibrewal does not see the potential
requirement for a unit now but in future if they intend to expand to get a big share of the
market which is possible as demand is high for premium quality bread and imported
chocolates due to rising disposable income with the Surat population, it will be essential to
have a manufacturing unit to cater to more number of stores. Manufacturing in Shifts might
create a mismatch in the demand timings as most of the bread is sold in the morning. Thus
an expansion plan will require a complete supply chain restructuring for the organization.
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Harvard Referencing
Welcome to Home Breads : Cakes, Breads, Cafe, Gourmet :. 2016. Welcome to Home Breads: Cakes, Breads, Cafe, Gourmet :. [ONLINE] Available at: http://homebreads.com/index.html.
[Accessed 01 April 2016].
Seasonality Definition | Investopedia. 2016. Seasonality Definition | Investopedia. [ONLINE]
Available at: http://www.investopedia.com/terms/s/seasonality.asp. [Accessed 03 April 2016].
http://homebreads.com/index.htmlhttp://homebreads.com/index.htmlhttp://homebreads.com/index.htmlhttp://www.investopedia.com/terms/s/seasonality.asphttp://www.investopedia.com/terms/s/seasonality.asphttp://www.investopedia.com/terms/s/seasonality.asphttp://www.investopedia.com/terms/s/seasonality.asphttp://homebreads.com/index.html