SUPPLY CHAIN MANAGEMENT

Comparison of supply chains of a fashion and a non fashion product.

Mid-term Submission By: Sarvottema Nagpal Palak Jain Mehma Nayyar (MFM 13-15)

THE BASIC SUPPLY CHAIN MANAGEMENT PROCESS

Non- Fashion Product:

FRITO LAYS

ABOUT THE FRITO LAYS

PepsiCo supply chain for manufacturing Frito Lay potato chips are through contract farming for potatoes in India. India is placed 3rd in the list of major potato producing countries of the world. It produces around 25 million metric tons of potatoes that contribute to approximately 8 % of the worlds total produce. This crop is grown in 1.5 million hectares of land in India ranking 4th among the countries having maximum area cultivated for potatoes.

THE SUPPLY CHAIN PROCESS

1. Processing and Quality Requirements Potatoes grown in India for traditional use have high sugar content and fewer solids. Processing requires potatoes with low sugar content (0%) and high solids (between 15 to 20%). 2. R&D Thrust Areas The sugar content of potatoes is determined by the genotype and several pre- and post-harvest factors. 3. Farm Inputs The company ensures availability of inputs to farmers working in the area. The vendor in the region ensures that the farmers falling under his supervision have all the required inputs at the right time.

4. Farm Production The company has employed team of agricultural graduates, who work with the farmers to provide technical input and to monitor the production with the farmers in their specified area. One technical expert deals with approximately 100 farmers. 5. Harvesting and packaging Traditionally, jute bags have been used for packaging potatoes. Instead of jute bags, the company has propagated the use of plastic bags for packaging as it ensures better storage. 6. Grading and Sorting The potatoes are mechanically graded for size. Potatoes that are too small for processing are separated. Also, there is visual inspection for damaged potatoes.

7. Storage Critical factors in successful storage include variety, methods of culture, harvest, field curing, temperature and humidity control, storage and sprout inhibition. Potatoes are stored at 12 degrees to control conversion of sugar to starch. At this temperature potatoes can be stored up to 4 months. Further, potatoes are also treated to limit sprouting. 8. Processing Center Selected material is taken to the processing plant and is subjected to washing and peeling. Peeled potatoes are subject to metal detection and inspection for physical damages and discoloration. Following this, the potatoes are run through rotating slicers, and are subjected to deep frying. The fried chips undergo optical testing for color. At the last stage the chips are mixed with spices and packed.

Pepsi has three potato processing plants in India: 1. Punjab (Sangrur) 2. West Bengal (Sankrail near Kolkata) 3.Ranjangaon near Pune in Maharashtra. Potato sourced under contract farming accounts for roughly 55% to 58% of PepsiCos total requirement. Vendor is the person hired by the company between farmers and company. Farmers can approach him directly in case of any problem. He in turn communicates the issue to the company experts. The vendor also ensures availability of seeds and other inputs at the farm level and is involved in monitoring the crop along with the company agronomists

Fashion Product:

DENIM JEANS

ABOUT DENIM JEANS

SUPPLY CHAIN OF DENIM JEANS

SUPPLY CHAIN OF DENIMS

contd.

A MORE BROADER PICTURE :

COMPARISON OF THE TWO SUPPLY CHAINS