Supply Chain and logistics Management Project

Session 2019-2020

Group No. 2

• Sajal Jain 18A1HP059

• Kanishk 18A1HP047

• Saurav Modi 18A2HP458

• Pooja Mali 18A1HP039

• Akash Agarwal 18A3HP606

Tata Global Beverages
TATA Group was 148-year-old vision of Jamsetji TATA founded in the year 1868 which now has become
India’s largest multinational conglomerate company. TATA Global Beverages has been a part of it for
almost 59 years now (since 1960).

Under TATA Global Beverages brands are categorized under Tea, coffee and water category.

 Brands under Tea:

 Brands under coffee:

 Brands under water:

TATA Global Beverages has a presence in over 40 countries with 250 million servings.
Each brand of TATA group operates independently.

For procurement of materials TATA Global Beverages focuses on putting in place the right people, the
right structure, and the right approach to logistics. They have a regionally placed but category-led
matrix structure.

Managing such a huge supply chain isn’t easy. So, first they had to look at establishing exactly what
they spend. How much? On what? With whom? What are the contractual positions? They are in the
process of putting in place a standard spend analytics tool across all the countries, so they will be able
to take feeds from all the ERP systems and feed that into their own tool.

Knowledge of various teams and various locations for procurement of materials in that area so that
they could spend effectively. They are also aware of what will be a broader marketplace.

TATA’s strong sense of ethics with code of conduct for suppliers and 3000 strong employee base
strengthens the brand.

Sourcing
 It procures the finest tea and coffee from suppliers across 14 countries who meet its
quality, safety and ethical standards.
 Water and energy are also critical inputs, which it seeks to source responsibly and use
efficiently.
 8.5% improvement over last year’s KWh/tonne energy consumption.
 Approximately 12% of its total energy usage is procured from renewable sources, up
from ~7% last year.
Tata Global Beverages Limited is dedicated to the manufacturing and usage of viable drinks. Their
viable supply plan focuses on viable agrarian methods and outlines their values and rules of behavior
for their production systems in the purchase of raw products. It defines minimum food safety
requirements, operating and economic circumstances, work safety, economic and occupational health
demands and farming methods for providers. Tata Global Beverages Limited is dedicated to offering
its customers with secure and high-quality drinks that improve their fulfillment. Their aim is for the
entire coffee they purchase to be 100% sustainable by 2020. By January 2015, they will notify their
providers in the delivery system for phase-out of WHO Classes 1a and 1b, of POPs as per the
Stockholm Convention and of the Rotterdam Convention (Prior Informed Consent (PIC). They shall
encourage vendors to use non-chemical solutions such as biopesticides, biological agents, tillage, and
other in their crops. They will promote the execution of a strategy for our supply chain to
progressively decrease agrochemical use. However, the magnitude of use depends on the supplier's
agricultural circumstances, history and teaching.
Tata Global Beverages is dedicated to producing and consuming sustainable beverages. As of mid-
2019, in their global Business and Tetley Green Tea in India, all the tea that they provide for Tetley is
100% Rainforest Alliance certified. Their sustainable sourcing approach focuses on sustainable
farming methods which explains their values and code of behavior for the packaging & processing
units when buying tea and coffee.

Simplifying tea sourcing

In a breakthrough step towards digitising tea sourcing planning, sourcing analysis and
buying, as well as distribution of the bought tea lots, TGB launched DigiTea, a custom cloud-
based application built with SAP HANA. SAP HANA is an in-memory database developed
by the cloud platform SAP, primarily to store and retrieve data as required by users. DigiTea
scores big in terms of performance, scalability and visibility across locations. With the new
cloud-based application, TGB can transition to a central data storage model that provides
increased visibility for decision making, besides serving as a platform for future digital
interventions in tea buying.
Key functionality Key advantages

Data integration and connectivity Increases automation

Storage and analysis of large volumes of Reduces manual intervention

data in real time
 Centralised reporting and analytics Incorporates best practices and includes all
necessary controls

Increases mobility and accessibility

Operational efficiency
Operational efficiency involves streamlining processes, workflows and businesses at the front
end as well as the back end. TGB is striving to evolve an agile enterprise that can nimbly
adapt and upgrade its operations to meet the rapidly changing consumer needs and reinforce
its competitive strengths in a dynamic marketplace. TGB’s various operational levers
complement each other to form an efficient and harmonious unit – one that can enhance
margins and drive scalable growth. In 2018-19, their organisational efficacy scaled new
milestones.
Maximum impact. Zero Highest-ever production Recognition for the
harm. volume Landover plant
TGB recorded its first Lost- Their Indian business Their Eight O’ Clock Coffee
time Accident-free quarter clocked a production plant in Landover, Maryland
in the first three months of volume of 11,500 tonnes in (US), was named one of the
the reporting fiscal. This is October 2018 – highest Top Champions of
testament to the joint efforts ever! Production at their Manufacturing in the
of teams over the years Sampla Packeting Centre, Growth and Productivity
towards imbibing a ‘Zero Haryana, alone crossed category, by the Maryland
Harm’ safety culture, 3,000 tonnes in the same Regional Manufacturing
wherein they are working to period. Institute (RMI). This
affect a positive shift in recognition reflects the
attitude towards safety plant’s focus on automation,
rather than making safety a process improvement,
prescriptive norm. training and development
and employee engagement,
resulting in significant
productivity growth, an
exceptional safety record,
top-quality certification and
commendable customer
servicing.

Refining the operational matrix

TGB continually evaluates its businesses across geographies in line with its strategic
priorities. For long-term business effectiveness, they restructured their international
operations to enable better synergies, optimise costs and sustain their laser focus on core
markets. Its erstwhile EMEA and CAA units were merged into a single unit called the
International Business, with experienced country heads in key markets, reporting to a single
head. This will build greater alignment across the Company and bring in greater cost
efficiencies.
Strengthening production capacity
To address growing demand and achieve economies of scale in production, it decided to step
up the capacity with a new tea-packaging unit in the Gopalpur Industrial Park, Odisha. This
plant will be set up through an agreement with Tata Steel Special Economic Zone, a wholly
owned subsidiary of Tata Steel. The capacity of the unit is estimated at ~36 million kg per
annum and is likely to be operational by 2020. It will be used for the manufacturing and
storage of tea, as well as the warehousing of the products, including those of subsidiaries,
associates and JV companies. The plant will add not only to its existing capacity, but also
help sustain the momentum of its record-breaking production rate.
Retail experience
Tata global beverages tried to enter retails business by two means:
1.Coffee retail: Tata entered into a joint venture with Starbucks to get into coffee retail
chain. It agreed to source coffee beans and opening stores in India. This was a fruitful
venture. The retail stores were developed in cities across the country, beginning with stores in
Delhi and Mumbai in calendar 2012. In separate sourcing and roasting agreement between
Starbucks coffee company and tata coffee limited, tata coffee limited will roast coffee to
supply tata Starbucks limited, and to export to Starbucks coffee company.

2.Tea retail: Tata started its tea retail venture in the year 2017 in Bangalore with the name
“Tata cha”. The Tata Global Beverages proposed to scale up its tea retail venture Tata Cha as
initial feedback to its pilot stores in Bengaluru was positive. The plan was to take Tata Cha to
more cities as the company was looking to expand into adjacencies.

Tata Cha was launched in the year 2017 in the tech capital with one store, which was
subsequently scaled up to a total of four outlets in 2018. The stores provide hot and cold tea-
based beverages, traditional snacks and meals, all aimed at elevating the neighbourhood tea
stall experience.

Tata Global is the world’s second-largest tea maker after Unilever and is among the leading
branded tea players in India, competing head on with Unilever’s Indian subsidiary Hindustan
Unilever (HUL). While a desire for a meaningful presence in coffee retail pushed Tata Global
to tie up with Seattle-based Starbucks Coffee Company in 2012, retail tea business is
something it has largely experimented with in the past.

As the first organised tea retailer in the country, Chai Point, which started eight years ago,
has now over 100 outlets in five cities, putting up nearly 2000 fresh-milk-based vending
machines across the country and delivering tea on call in a span of 30 minutes.

Competitors such as Chaayos and Chai Thela also have a footprint; the former is located in
cities such as Mumbai, Delhi, Noida and Gurugram and the latter largely in Delhi-NCR.

How TGB optimized its value chain?

In India, TGB introduced two key digital initiatives in the year 2018-2019 to drive informed
decision making at the downstream level and improve effectiveness of sales and distribution.
How it will help?

The rich data from the Distributor Management Solution (DMS) and Sales Force Automation
(SFA) solutions will support Predictive Analytics, Artificial Intelligence and Machine
Learning algorithms. As part of its digital road map, it will also focus on increasing
collaboration across its network through a set of data-driven integration processes, including
demand planning, supply and network planning, manufacturing scheduling and sourcing.