Title analyzing the supply chain of a small coffee shop

MINISTRY OF EDUCATION & TRAINING THE STATE BANK OF VIETNAMHO CHI MINH UNIVERSITY OF BANKING SUPPLY CHAIN MANAGEMENT Class: L27 – Group 5 Title: ANALYZING THE SUPPLY CHAIN OF A SMALL COF

MINISTRY OF EDUCATION & TRAINING THE STATE BANK OF VIETNAM

HO CHI MINH UNIVERSITY OF BANKING

SUPPLY CHAIN MANAGEMENT

Class: L27 – Group 5

Title: ANALYZING THE SUPPLY CHAIN OF A SMALL

COFFEE SHOP

Dr Nguyen Van Thich

Lý Huỳnh Phụng Linh 050609210683 Nguyễn Thị Ngọc Ánh 050609210487

Hà Hoàng Huy 050609211837 Ngô Minh Khuê 050609210578

Table of contents

I SUPPLIER CAPACITY ASSESSMENT AND SUPPLIER’S MARKET

POWER 2

1 Distributor 2

2 Coffee shop (Retailer) 2

3 Customer 2

II DISTRIBUTOR ANALYSIS 3

1 Ingredient: 3

2 Order 3

3 Supplier’s capability assessment: 3

4 Quantity 3

III SUPPLIER SELECTION THEORY 3

1 Applying Supplier Selection Theory to the Chain at Work 3

2 Partly do-it-yourself; Partly outsourced 6

3 Evaluation for Partner 6

IV PRODUCTION 6

1 Plan 6

2 Source 6

3 Make 7

4 Delivery 8

5 Return 8

V DISTRIBUTION GROUP’S SUPPLY CHAIN MODEL 9

1 The coffee shop’s model of distribution: 9

2 Warehouse management of goods 10

REFERENCES 11

I SUPPLIER CAPACITY ASSESSMENT AND

SUPPLIER’S MARKET POWER

1 Distributor

Distributors will give us:

- Grocery stores in the market: filter coffee, sugar, glass, spoon, straw, coffee maker

- Vinamilk Dairy Company: Condensed Phuong Nam milk

2 Coffee shop (Retailer)

Our Coffee shop is a retailer, we sell finished cups of coffee In the shop, We will:

- Making a finished cup of coffee

- Shipping coffee to customers who took the order on apps or by phone

- Selling takeaway coffee

3 Customer

We are a small coffee shop, mainly serving people who live near the market where

we are, so the target customers are:

- Shopkeepers, small traders: They live or work in the market To buy coffee, they will order by calling and we will deliver to their places

- Pedestrians: We will sell takeaway coffee for this type of customer For customers who buy at the coffee shop, we have small tables for them to order

Coffee

farmer

(Supplier)

Coffee Shop

Coffee farmer (Supplier)

Customers

and enjoy their drinks.

II DISTRIBUTOR ANALYSIS

1 Ingredient:

- Coffee: Trung Nguyen Roast coffee, S, I, N (500gr/bag)

- Bien Hoa Sugar

- Condensed milk: Ngoi Sao Phuong Nam (blue)

- Buy equipment, coffee filters, packaging, straws, etc from a supplier in Binh Duong

2 Order

- Condensed milk: once a week: (10 boxes, 1 liter/Can, 1 box/month)

- About 5 kg of sugar/month

- Fresh milk from Da Lat: 12 cans/12 liters/month Order 100 kg of coffee/month (200 bags: 60S, 60N, 80L)

3 Supplier’s capability assessment:

- Cost (cheaper than in Ho Chi Minh City)

- Reputation: clear documents and certificates

- Good service: deliver on time, deliver the full quantity of products

4 Quantity

- Average: 100 cup/day

- 1 kg of roast coffee for 25 cups

- Price: 12.000 - 15.000/cup of coffee

III SUPPLIER SELECTION THEORY

1 Applying Supplier Selection Theory to the Chain at Work

Technology & quality

- Method: Supplier selection is based on raw material supplier selection method

- Coffee: Prestigious brand, producing clean, delicious coffee with guaranteed quality

- Milk: Reputable brand, quality assurance Highlight certifications like HACCP, pasture-raised beef or locally sourced milk to ensure fresh and ethical dairy production practices

- Experience: Choose a supplier with many years of experience in the field of distributing coffee products and ingredients: Kim Nhan (10 years of experience in wholesale and retail distribution of products in the F&B industry) - product distribution: Chinese coffee Nguyen, Bien Hoa street; VNM (Southern Star Milk), tools such as cups, straws, bags and other mixing items

- Device: Have vehicles that can transport products in emergency situations There are many means of transportation on many different terrains, able to transport goods quickly, urgently or transport large or small quantities

- Control process: Good control of goods quality There is a warehouse to preserve goods with guaranteed temperature, ensuring that goods maintain their shape and quality during storage, transportation and delivery to customers The delivery and payment process is agreed between the seller and the buyer

Prices and costs

- Unit price:

● Bien Hoa granulated sugar: 32k/ 1kg

● Sao Phuong Nam condensed milk (green): 58k/box

● Dalat fresh milk: 38k/1 box

● Filter coffee: there are 3 types of filter coffee I, S, N with 3 types of prices: I: 65k/package, S: 55k/package, N: 55k/package

● Filtered coffee: 56k/filter

● Paper cup: 1.4k/cup

● Cup holder: 110 VND/piece

● Straws: 10 VND/piece

- Terms of payment:

● Delivery at the restaurant

● Payment in cash upon receipt

● If the delivered product has a problem (perforated, broken, leaking, expired, etc.), the supplier will refund compensation or exchange for a new product

- Service & commitment

Delivery schedule: Supplier delivers goods according to schedule Goods delivered are of the correct quality and quantity as committed Coffee, milk and equipment suppliers deliver on time on the 2nd Sunday of every month Goods are always delivered in the correct quantity as stated above, quality is always guaranteed such as new coffee, condensed milk, sugar from the nearest manufacturer and the remaining tools are intact, not moldy, … Stable: Delivery within a fixed period of time Delivery time will usually be fixed at 11:00 on the 2nd Sunday of every month according to agreement between the two parties

Flexibility: Flexibility in production and supply processes helps flexibly meet customer needs Coffee suppliers are always flexible in introducing many types of coffee from many different sources (if any), ensuring diversity in the product portfolio

Problem solving: How to solve problems very quickly, always informing about the resolution process and specific action plan When there are errors

in delivering the wrong quantity or wrong goods, the supplier always quickly calls to apologize and quickly redelivers the correct order

Management capacity: Quality management capabilities ensure coffee, sugar and other equipment meet and exceed established quality standards,

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regularly perform quality checks and have monitoring systems in place to ensure compliance

2 Partly do-it-yourself; Partly outsourced

The product is completely homemade, not processed

3 Evaluation for Partner

Assess supplier capacity:

- Price (cheaper than Ho Chi Minh City)

- Reputable: have clear papers and documents

- Good service: staff delivers on time, delivers the right quantity of products

IV PRODUCTION

1 Plan

It is crucial to identify reliable coffee bean suppliers who can provide high-quality beans This involves conducting thorough research, evaluating the reputation and quality standards of potential suppliers, and establishing strong relationships with them By selecting reputable suppliers, the coffee producer can ensure a steady supply of top-notch coffee beans

Another aspect of the sourcing stage is monitoring the freshness of sugar and milk, which are essential ingredients in coffee production By closely monitoring the expiration dates of these items, the coffee producer can maintain the quality and taste of the final product It is important to establish a system for regularly checking expiration dates and rotating stock to ensure that only fresh ingredients are used in coffee production

2 Source

Moving on to the execution stage, careful planning is crucial This includes developing a production plan that focuses on brewing coffee during peak hours, especially in the early morning when demand is typically highest By aligning

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production with peak hours, the coffee producer can ensure that freshly brewed coffee is readily available when customers need it the most

To effectively plan the quantities of milk, sugar, and coffee needed, it is important

to estimate the number of coffee cups that are likely to be sold per day This involves analyzing historical sales data, taking into account factors such as day of the week, seasonality, and any upcoming events or promotions By accurately forecasting demand, the coffee producer can optimize inventory levels and minimize waste, ensuring that the right amount of milk, sugar, and coffee is available at all times

In the purchasing stage, managing purchase orders is critical This involves placing orders with suppliers in a timely manner to ensure an uninterrupted supply chain It

is important to establish strong communication channels with suppliers, closely monitor order status, and promptly address any issues or delays that may arise Tracking inventory levels and monitoring product availability is another crucial aspect of the purchasing stage By closely monitoring inventory levels, the coffee producer can avoid stockouts or overstock situations This involves implementing inventory management systems that provide real-time visibility into stock levels and automatically generate alerts when inventory falls below a certain threshold

By staying on top of inventory, the producer can ensure that the necessary ingredients and packaging materials are always available when needed

3 Make

The production stage involves optimizing the coffee brewing process to consistently produce high-quality coffee This includes closely monitoring brewing parameters such as water temperature, brew time, and coffee-to-water ratio Regular equipment maintenance and calibration are also important to ensure that the brewing process remains consistent and yields a delicious cup of coffee every time

Packaging plays a crucial role in the coffee supply chain, particularly for takeout orders The coffee producer should invest in high-quality cups and packaging materials that are both functional and visually appealing Proper packaging ensures that the coffee remains hot and retains its flavor during transportation Additionally, it is important to use environmentally friendly packaging materials and explore options for recyclable or compostable packaging to minimize waste and support sustainability efforts

4 Delivery

In the delivery stage, it is important to establish efficient logistics and distribution channels Deliveries should be scheduled to reach locations within the market area, taking into account factors such as traffic patterns and customer preferences To ensure timely delivery, it is crucial to optimize delivery routes and utilize tracking systems to monitor the progress of deliveries in real-time It is also important to establish clear communication channels with customers to provide updates on delivery status and address any concerns or issues that may arise

When it comes to target customers, the coffee producer should focus on vendors and shoppers in the market area By understanding the preferences and needs of these target customers, the producer can tailor their offerings and marketing strategies to effectively attract and retain their business This may involve conducting market research, engaging in promotional activities, and providing personalized customer experiences

In the event of spills or breakage during transportation, it is essential to have a clear policy in place to replace affected orders promptly This demonstrates a commitment to customer satisfaction and helps maintain strong relationships with customers

5 Return

Sustainable waste management practices should be implemented throughout the supply chain This includes properly disposing of food waste, such as coffee grounds, in an environmentally friendly manner, such as composting It also involves recycling packaging materials and exploring innovative ways to reduce waste generation By implementing sustainable practices, the coffee producer can contribute to environmental conservation and enhance their brand image as a responsible and eco-friendly business

In conclusion, effective supply chain management in the coffee industry involves meticulous planning, strategic sourcing, efficient execution, and sustainable practices By focusing on quality, optimizing production, ensuring timely delivery, and embracing sustainability, coffee producers can create a seamless and successful supply chain that meets customer demands and drives business growth

V DISTRIBUTION GROUP’S SUPPLY CHAIN MODEL

1 The coffee shop’s model of distribution:

The Stock and Ship Distributor model functions as a supply chain arrangement wherein manufacturers maintain their product inventory When a retailer, such as a cafe in this instance, submits an order, the manufacturer transports the goods to the retailer in packaged form In this scenario, the cafe serves as the retailer, and the warehouse is strategically positioned in close proximity to the market

Factories: Milk, coffee, sugar, coffee filter, straw, glass.

Retailer: The coffee shop

Customer: Finally, customers are vendors or pedestrians who buy coffee at the counter

The process of this model can be described as follows:

1 The manufacturer produces goods and delivers them to the cafe when the cafe places an order

2 The manufacturer delivers the goods, and the cafe receives and stores them

3 When there is an order from a customer, the cafe processes it based on the customer's requirements for preparation and delivery

2 Warehouse management of goods

In the Logistics and Supply Chain management, the warehouse has a significant role which follows the seven rights of customer services, warehouse deliveries of the right products with the correct quantity to the right customers, at the right places and time, in the right condition, at the right prices (Richards 2017) Specifically, delivering products to the right customers in the right places at the

right time is based on correctly labeled goods loaded on the suitable vehicle at sufficient time to meet the delivery deadline and to achieve the right price condition it is required a cost-efficient operation which provides value for money (Richards 2017)