preview

Logistic and Supply Chain

Better Essays
Open Document

OPERATIONS AND SUPPLY CHAIN MANAGEMENT Vol. 2, No. 3, September 2009, pp. 167-171 ISSN 1979-3561|EISSN 1979-3871

167

Managing Supply Chain Complexity in a Tea Manufacturing Company
I Nyoman Pujawan*
Department of Industrial Engineering, Sepuluh Nopember Institute of Technology, Kampus ITS Sukolilo, Surabaya 60111 Indonesia E-mail: pujawan@ie.its.ac.id

Mahendrawathi Er
Department of Information Systems, Faculty of Information Technology, Sepuluh Nopember Institute of Technology, Kampus ITS Sukolilo, Surabaya 60111 Indonesia E-mail: mahendra_w@its-sby.edu

Abstract
In this case we present issues facing supply chain management in a tea manufacturing company. The company manages two types of products, ready-to-drink jasmine tea …show more content…

In the soft drink industry in general, there are two types of products according to their packaging. The first is called return glass bottle (RGB), where the empty packages are returned to the factory and used to produce new products. The second category is one-way product (OWP), where the packages will not be returned to the factory but will be disposed of after the products have been consumed. In Tehindo, only the glass bottles are classified as RGB, while the others are classified as OWP. Managing RGB products is certainly more complicated than OWP. One of the challenges would be to ensure a smooth flow of the products downstream as well as the empty bottles upstream. High inventory levels at some supply chain players for various reasons (including forward buying and forecast inaccuracy) would result in shortages of empty bottles at the factories for a certain period of time. Tehindo has a policy of announcing any price increase two weeks prior to the increase date. This is simply to please the wholesalers and retailers as they usually feel uncomfortable with a sudden price change (note that some other soft drink companies in Indonesia do not give wholesalers and retailers the privilege of knowing price increases well in advance, as this company does). To avoid massive forward buying, the company requires the retailers and wholesalers to exchange empty

Get Access
Related
Get Access