Yakult operation report

Yakult-Danone Operations Management Report

2015

BY: MANIKYA SHARMA - 22/016, NIKHIL PAL SINGH - 22/019, V.SRINIWAS - 22/029, VIPUL BHATIA - 22/031

APEEJAY SCHOOL OF MANAGEMENT

3/5/2015

Apeejay School of Management

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INTRODUCTION

Yakult Danone India (P) Ltd is a Joint Venture (JV) between Yakult Honsha, Japan

and Groupe Danone of France, both of which are global probiotic leaders. The JV

was formed in 2005 to manufacture and sell probiotic products in the Indian

market.

Yakult, a probiotic drink was launched in India in 2007, and is presently available

in Delhi, NCR, Nasik, Chandigarh, Punjab, Jaipur, Mumbai, Pune, Hyderabad,

Chennai and Bangalore. Yakult is manufactured at an ISO 9001:2008, HACCP and

OHSAS 18001:2007 certified manufacturing facility in Sonepat, Haryana in India.

As a pioneer in probiotics, Yakult has formidable research capabilities and product

technologies in the field of probiotics.

Yakult Central Institute for Microbiological Research has for years researched the

use of intestinal bacteria as a factor in health maintenance, conducting a wide

range of studies on the benefits of microorganisms in Japan.

In India too, Yakult Danone India is working actively to build awareness about

probiotics and contribute to a healthier society. Yakult's benefits have been

scientifically established through years of research and 30 million people in more

than 30 countries drink Yakult every day.


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YAKULT’S WORLDWIDE PRESENCE

SHARING OUR HOPE FOR PROBIOTICS WITH THE WORLD! Yakult is helping people throughout the world to enjoy healthier lives. It has an overseas network based on the simple idea that "Yakult = Good Health"


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WHY YAKULT?

Yakult is a delicious probiotic drink that helps improve digestion and helps build

Immunity. Yakult contains 6.5 billion beneficial bacteria (Lactobacillus casei strain

Shirota) that reach our intestines alive and restore the balance of the beneficial or

friendly bacteria in the gut. It helps improve digestion and helps build immunity. It

has been scientifically proven to be safe and effective.

Over 30 million people in more than 30 countries including India trust Yakult and

drink it every day!


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OPERATIONAL STRATEGY OF YAKULT

S W

O T

STRENGTHS

S1: High brand awarenessS2: Strong brand

reputation with health benefits

WEAKNESSES

W1: Limited flavor

W2: Storage Difficulty

(temperature)

W3: Limited Distribution

channel


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BCG MATRIX

OPPORTUNITIES

O1: Trend in health concerns

O2: Increase in number of convenience stores and

hypermarkets

THREATS

T1: Competitors provide many flavors, packaging,

and promotions

T2: Expiration of lactobacillus patent gives rise to new competitors

Cash Cows

Stars


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Few of the quality control measures:

- More than 100 checks are carried out to ensure that the final product

taste’s right and special care is taken to safeguard the viability of the live

Yakult bacteria.

- Workers wear special protective clothes.

- Workers sanitize their hands and pass through the air shower before

entering the production area.

- The bottling and filling area is controlled with germ free air.

- Every batch of Yakult produced is monitored for 24-hours before it is

dispatched for sale.

- Frequent testing at Yakult’s on-site quality control division makes sure that

each bottle of Yakult has more than 6.5 Billion beneficial bacteria-

Lactobacillus Casei Strain Shirota, and that the product is of the highest

standards, right up till the date of expiry.

FORECASTING

Yakult’s sales department usually uses Regression Analysis for forecasting sales

for the upcoming months. Their forecast is mostly dependent on sales.

QUALITY STANDARDS & ACCREDITATIONS

Yakult follow


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PRODUCT DESIGN

RESARCH&DEVELOPMENT (TOKYO)


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SOFTWARES

Omron-Switches & Sensors-Ellen Bradley

1. SCADA (supervisory control and data acquisition) is a system operating with coded signals over communication channels so as to provide control of remote equipment (using typically one communication channel per remote station.

2. Mitsubishi PLC & Panels 3. Siemens Controllers

FACILITY LAYOUT

- The Sonepat facility is built to produce 1 Million bottles per day. However,

they are only using 15% of the total capacity i.e. 150,000 bottles are being

produced per day.

- There are 70 employees currently working in this facility.

- The cold storages & warehouses are located within the facility campus to

save on time.

- The facility also has generator back up – 500 KVA * 3 units: 2 operational, 1

backup on rotational basis.

- The waste produced is Nil according to them. However, for utilization the

water used in the production process they have installed ATP plants for

collecting & treating the Sludge so that the resultant recycled water can be

used for gardening purposes.


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- Their company policy allows them to save 30% of the total land area for

green area and it is being implemented across all the factories worldwide.

FACILITY LOCATION

The Rai, Sonepat was chosen as the best option to setup the factory as it was

having fewer constraints with regards to ground water, electricity etc.

According to them, Haryana government had supported them as their policies are

quite companies friendly with regards to foreign investments.

Also, the labour is quite inexpensive over here and no problem regarding them.

PROCESS DESIGN

Making of World’ Original Probiotic Drink

Yakult’s first state-of-art probiotic factory in India is located at Rai, Sonepat,

Haryana. Built on 8-acres of land, this plant has a total production capacity of 1

Million bottles per day that will be achieved in a phased manner. The

manufacturing process is automated and follows strict quality control measures

to ensure that each Yakult bottle has more than 6.5 Billion live beneficial till the

end of its shelf life (40 days).


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They follow Batch Production process with a continuous flow. No rework can be

done i.e. if there is any fault or malfunctioning of the mixture in between the

process, the whole batch has to be discarded. They cannot go back and re-work or

rectify the problem.

The suppliers are based all over India. Milk is procured from Hatsun & Dynamix.

While, Sugar is procured from Mawana & Symbaoli and Glucose is procured from

Maze Products & Sukhjeet.

The total cycle time is 70 Seconds. This means that it takes 70 seconds for a bottle

of Yakult to get ready.


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SUPPLY CHAIN MANAGEMENT

(VALUE COMMUNICATION)

Distribution

Yakult does not believe in “Direct Selling”. It does not have any Distributors. It has

setup its own offices in every city.

Yakult’s unique distribution process -

• Yakult has roped in actress Kajol as brand ambassador and has an army of

girls to home-deliver Yakult on scooters, plans to launch a low-sugar variant

of Yakult.

• The Yakult Ladies, key components in the company’s distribution system,

are young, dynamic women propagating good health and spreading cheer

wherever they go.

• This system has been specifically created to help customers fully

understand the health benefits of probiotics, along with a free sample, to

help familiarize them with the delicious taste of Yakult.


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Yakult Ladies

• There are more than 240 trained Yakult Ladies operational in Delhi & NCR,

Jaipur, and Chandigarh and more than 500 in Mumbai and Pune.

• There are 80,000 Yakult Ladies across the globe, working through regional

marketing offices or ‘Centres’. Internationally, this system has been the

backbone of distribution for Yakult in more than 15 countries.

• Each Yakult lady is given extensive training and then allocated a specific

area for propagation and delivery. Usually she delivers up to 200 bottles

every day and earns a commission on every bottle sold, thus becoming

financially independent.


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CHALLENGES FACED BY YAKULT IN INDIA

- Besides doctors, most consumers do not know much about probiotics.

Making them pay Rs 10 for a 65 ml bottle is a challenge.

- Yakult needs to be stored at a controlled temperature of below 10 degrees

Celsius. This is why Yakult have been prompted to provide coolers at many

stores.

INDIAN PACKAGING FOR YAKULT

Presentations & Public Speaking

Yakult operation report