Warburtons Supply Chain
www.thetimes100.co.uk
Managing the supply chain to meet customer needs
Curriculum Topics
• Sectors of industry
• Primary sector
• Secondary sector
• Tertiary sector
Warburtons leading position in the market is underpinned by the
Introduction
company’s dedication to supply continuously high quality bakery
It is easy to take for granted everyday fast-moving consumer
products, whilst investing in innovation and new product
goods (FMCG) such as bread. When consumers go to a corner
development. Every organisation has to plan for the future.
shop or the supermarket, they simply expect these products to be
The key areas of Warburtons long-term plan are to:
there and to be freshly baked. An average family will probably
1. focus on quality …show more content…
by baking the best quality bread every day
replace their supplies of bread several times a week. Behind these
2. drive sales
consumer needs for fresh products there is a complex process of
3. run efficient bakeries
production.
In the case of bread, meeting these needs is not just
4. manage costs
dependent upon a bread manufacturer. The process starts with
5. invest in people working within the business.
the farming of the wheat. This is then milled into flour before being baked into the bread, packaged and distributed to stores to be made available to the consumer.
To do this Warburtons has taken a sustainable approach to running the business. This means that Warburtons adopts practices that can continue long into the future by managing the
This case study focuses on the second largest grocery brand in
supply chain to meet customer needs. This involves such things
the UK - Warburtons. The company is also the largest wrapped-
as using sources that minimise the impact on the environment for
bread brand in the country, with a market share of 25.2%.
future generations. However, for Warburtons, it also includes
Warburtons is a family business with family values. The fifth
developing long-term relationships with its stakeholders to
generation of the family is dedicated to the tradition of baking,
ensure the supply of quality products for the foreseeable future.
which goes back more than 130 years. With a headquarters in
Focus on …show more content…
quality
Bolton, Lancashire, Warburtons employs approximately 5,000 people in 14 bakeries and 15 distribution depots. Over 800 of these workers have been with the business for more than 15 years.
Run efficient bakeries Drive sales
LONG TERM PLAN
Every day more than two million bakery products are made and distributed around the country. This ensures that many thousands
Invest in people
Manage costs
Fast-moving consumer goods
(FMCG): Products that sell in high volumes and are bought frequently by consumers. Consumer: The end user of a product or service.
Market share: The percentage of sales within a market that is held by one brand or company.
GLOSSARY
of retail outlets have freshly baked products daily.
Supply chain: Sequence of linked transactions that carries a product from its origins as raw materials or components to its receipt by the final consumer. EDITION
15
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Warburtons | Managing the Supply Chain to meet Customer Needs
117
www.thetimes100.co.uk
Sectors of industry
The first sector of industry is the primary sector. This is concerned with natural resources and the extraction of raw materials. For
Warburtons, this means working with farmers who grow the grain that is required to make its bread and bakery products.
The next sector of industry is the secondary sector. This involves the manufacture or refining of goods from the raw materials obtained in the primary sector. The millers who turn the grain into flour belong to this sector, as do activities of the
Warburtons organisation as it uses science and technology to create the products consumers want.
The third sector is called the tertiary sector and this is where
The many sequences that link each of the different stages in the chain of production are all part of the overall supply chain.
Through each of the stages in the supply chain organisations like
Warburtons work hard to be distinctive and add value.
services are provided to businesses and consumers. The
In the 19th century the economy in the UK was mainly dependent
distribution of Warburtons products falls into this sector, as do the
on the primary sector. This changed in the 20th century as
services provided to retailers by the organisation.
manufacturing grew in importance. Hence the secondary sector became the largest contributor to the economy. In the last few
Primary sector
(Linking with farmers to produce the finest grain)
decades, the tertiary sector has taken over. Now approximately
75% of the UK’s GDP comes from service industries. Although
Warburtons core activities fit in the secondary sector, more emphasis has been placed on adding value through services. The
Seondary sector
(Milling of flour and the craft and science of baking the bread)
customers of bread products, retailers, want efficient and reliable services from their suppliers. This helps them to meet the needs of their consumers more precisely.
Tertiary sector
(From bakeries across the country, delivering the bread and providing services for retailers in order to meet customer needs)
Primary sector
Primary industries deal with natural resources. They include
The chain of production sees a product move through the three
farming, fishing and mining. Although Warburtons does not own
sectors of industry. There are a number of different stages in the
farms or actively farm itself, the company works very closely with
chain of production. The system starts with raw materials and may
farmers in the UK and Canada.
involve one or more manufacturing processes. It then finishes with final products that are ready for consumers. During each of the different stages, value is added to the product. Value added is the difference between the cost of inputs which go into making the product and the price that consumers are willing to pay. Value is added in a number of ways, for example:
• converting wheat into finished baked goods
• packaging them in a way that keeps them fresh
• delivering them to places that are convenient for the consumers to purchase from
• using sustainable methods and materials
• having the trusted Warburtons premium brand name.
GLOSSARY
Primary sector: The first stage in production. It includes farming, fishing and the extraction of raw materials.
Secondary sector: The second stage of physical production, involving processing and manufacturing from raw materials. Tertiary sector: The third stage of production which involves the provision of services.
Chain of production: The movement of a product through the sectors of industry. Economy: A system of production and trading that adds value to economic resources. EDITION
118
Warburtons | Managing the Supply Chain to meet Customer Needs
www.thetimes100.co.uk
15
www.thetimes100.co.uk
The basis of Warburtons sustainable supply chain is to provide
‘quality without compromise’. It feels it has a responsibility to continue to deliver fresh, great tasting and high quality products.
As its products depend on using the best ingredients, a close involvement with its farmers is essential.
Every year Warburtons uses more than 400,000 tons of wheat.
This is the equivalent to 14,000 lorry loads. By working with farmers, Warburtons can specify the types and varieties of wheat that are grown. This helps to ensure that the quality of bread is maintained. It also helps Warburtons to bake bread that is consistent in taste, softness and freshness.
More than 95% of wheat for Warburtons comes from established
for their closest bakeries. This reduces transport costs and helps
sources. Working with farmers helps to create the best varieties for
to create a responsible supply chain.
Warburtons bread. It also means that Warburtons can work with farmers to develop more sustainable practices, particularly through
A focus on quality is at the heart of improving bread. Baking
the reduced use of fertilisers. In its aim to develop long-term
bread is both a craft and a science. Using technologies for mixing
sustainable relationships with its farmers, Warburtons prefers to pay
and kneading the dough helps to make it more elastic to create
a little more for its wheat to ensure high quality consistent supply of
the perfect loaf. Quality targets are set to ensure that bakeries
materials. By working closely with suppliers, Warburtons ensures
bake the best bread every time. Bread needs to arrive with
that the standards of these businesses closely match its own. For
consumers in perfect condition. The appearance and quality of
example, it expects them to be fair, decent, honest and open. The
the packaging is important. This helps to create the standards
organisation has a set of ethical principles. These explain its
that shoppers expect.
expectations of the suppliers in terms of ethical standards in employment, working practices and environmental awareness.
Manufacturing is a balancing act. On the one hand Warburtons bakeries and departments have to manage their costs. This
Secondary sector
involves making high quality bread, whilst providing value for its customers. It involves being efficient, reducing waste and keeping
The secondary sector involves manufacturing products and turning them into part-finished or finished goods. Wheat grown for Warburtons is kept separate from other wheat and cereals so supply can be traced back to the farms. It is also milled separately by flour millers, some of whom have supplied flour for
Warburtons for more than 50 years. They turn grain into a partfinished good – flour – the basic ingredient for bread.
health and safety risks down. On the other hand, improved efficiency should not be an excuse for poor quality. Warburtons maintains the values associated with its premium brand whilst maintaining a responsible supply chain.
A manufacturing organisation has constantly to move forward.
Warburtons continually invests in plant, people and products and is also dedicated to producing new products that meet ever-
Grain
Flour
Mixing and kneading dough changing consumer demand. It is aware of new technologies as
Baking
Packaging
they become available. This means it can take advantage of new ways of producing better products. For example, in an attempt to improve energy efficiency, the organisation has put in place increased oven insulation and gas burners that shut down automatically when production stops. In addition to this,
efficiency are important principles. For example, wheat is shipped
Warburtons is investigating the use of alternative and renewable
to the ports closest to the mills. The mills in turn produce flour
sources of energy.
GLOSSARY
Throughout the manufacturing process, sustainability and
Part-finished: Manufacturing process that produces materials that are then used for other manufacturing processes.
EDITION
15
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Warburtons | Managing the Supply Chain to meet Customer Needs
119
www.warburtons.co.uk
www.thetimes100.co.uk
Warburtons also provides retailers with a wide variety of products including loaves, rolls and crumpets.
This enables them to offer consumers greater choice and meet their demands for different eating occasions, such as for snacks, breakfast and lunch.
Conclusion
Warburtons has come a long way since the 1870s. The key has been the commitment that the business has made to high-quality products. A bakery is not just about baking. For Warburtons, managing its business involves taking responsibility for managing supporting them as they plant the seeds on farms within the UK and Canada. It also works with millers. Finally, it provides distinct professional services that help retailers to run their businesses
Tertiary sector
more efficiently. The end result is the satisfaction felt by consumers as they finish the last crumbs on their plates.
The tertiary sector involves providing a range of services throughout the supply chain. Although the services themselves are not physical goods, they provide added value for customers linked with the products that they buy. For example, consumers expect a range of fresh bread products to be delivered to retailers
daily.
From its 14 bakeries and 15 depots around the country
Warburtons is able to meet this expectation. Warburtons has more than 900 delivery vehicles at its various bakeries. It manages the distribution to stores from bakeries across England, Scotland and
Wales. This ensures that products are delivered on time. It also means that the products are fresh when they are delivered and that quality is guaranteed.
To reduce its carbon footprint, Warburtons uses software to track delivery routes to ensure that they are as efficient as possible. It also makes deliveries at different times of the day to avoid much of the congestion on the road and save a substantial amount of fuel.
Warburtons customers are retailers. These may be large supermarkets or small local independent shops. Retailers will their customers. As part of its support for the tertiary sector retailers, Warburtons, for example, provides them with market research data purchased from market research agencies. This data informs retailers of selling trends and buying habits. This enables them to predict the week-by-week stock levels they require. It also helps them to allocate appropriate shelf space for products.
products.
2. Explain how one firm can contribute to the primary, secondary and tertiary sectors within the same supply chain.
3. Analyse how a manufacturing firm can ensure sustainability in its supply chain.
QUESTIONS
often require specialist advice on how best to service the needs of
1. Give examples of how value is added to Warburtons
4. Discuss whether managing the supply chain responsibly improves customer satisfaction.
GLOSSARY
Market research agencies:
Independent agencies that collect market data, write reports on market sectors and then sell the information to organisations within selected industries.
EDITION
120
Warburtons | Managing the Supply Chain to meet Customer Needs
www.thetimes100.co.uk
15
The Times Newspaper Limited and ©MBA Publishing Ltd 2010. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
the whole supply chain. It does this by working with farmers and
Managing the supply chain to meet customer needs
Curriculum Topics
• Sectors of industry
• Primary sector
• Secondary sector
• Tertiary sector
Warburtons leading position in the market is underpinned by the
Introduction
company’s dedication to supply continuously high quality bakery
It is easy to take for granted everyday fast-moving consumer
products, whilst investing in innovation and new product
goods (FMCG) such as bread. When consumers go to a corner
development. Every organisation has to plan for the future.
shop or the supermarket, they simply expect these products to be
The key areas of Warburtons long-term plan are to:
there and to be freshly baked. An average family will probably
1. focus on quality …show more content…
by baking the best quality bread every day
replace their supplies of bread several times a week. Behind these
2. drive sales
consumer needs for fresh products there is a complex process of
3. run efficient bakeries
production.
In the case of bread, meeting these needs is not just
4. manage costs
dependent upon a bread manufacturer. The process starts with
5. invest in people working within the business.
the farming of the wheat. This is then milled into flour before being baked into the bread, packaged and distributed to stores to be made available to the consumer.
To do this Warburtons has taken a sustainable approach to running the business. This means that Warburtons adopts practices that can continue long into the future by managing the
This case study focuses on the second largest grocery brand in
supply chain to meet customer needs. This involves such things
the UK - Warburtons. The company is also the largest wrapped-
as using sources that minimise the impact on the environment for
bread brand in the country, with a market share of 25.2%.
future generations. However, for Warburtons, it also includes
Warburtons is a family business with family values. The fifth
developing long-term relationships with its stakeholders to
generation of the family is dedicated to the tradition of baking,
ensure the supply of quality products for the foreseeable future.
which goes back more than 130 years. With a headquarters in
Focus on …show more content…
quality
Bolton, Lancashire, Warburtons employs approximately 5,000 people in 14 bakeries and 15 distribution depots. Over 800 of these workers have been with the business for more than 15 years.
Run efficient bakeries Drive sales
LONG TERM PLAN
Every day more than two million bakery products are made and distributed around the country. This ensures that many thousands
Invest in people
Manage costs
Fast-moving consumer goods
(FMCG): Products that sell in high volumes and are bought frequently by consumers. Consumer: The end user of a product or service.
Market share: The percentage of sales within a market that is held by one brand or company.
GLOSSARY
of retail outlets have freshly baked products daily.
Supply chain: Sequence of linked transactions that carries a product from its origins as raw materials or components to its receipt by the final consumer. EDITION
15
www.thetimes100.co.uk
Warburtons | Managing the Supply Chain to meet Customer Needs
117
www.thetimes100.co.uk
Sectors of industry
The first sector of industry is the primary sector. This is concerned with natural resources and the extraction of raw materials. For
Warburtons, this means working with farmers who grow the grain that is required to make its bread and bakery products.
The next sector of industry is the secondary sector. This involves the manufacture or refining of goods from the raw materials obtained in the primary sector. The millers who turn the grain into flour belong to this sector, as do activities of the
Warburtons organisation as it uses science and technology to create the products consumers want.
The third sector is called the tertiary sector and this is where
The many sequences that link each of the different stages in the chain of production are all part of the overall supply chain.
Through each of the stages in the supply chain organisations like
Warburtons work hard to be distinctive and add value.
services are provided to businesses and consumers. The
In the 19th century the economy in the UK was mainly dependent
distribution of Warburtons products falls into this sector, as do the
on the primary sector. This changed in the 20th century as
services provided to retailers by the organisation.
manufacturing grew in importance. Hence the secondary sector became the largest contributor to the economy. In the last few
Primary sector
(Linking with farmers to produce the finest grain)
decades, the tertiary sector has taken over. Now approximately
75% of the UK’s GDP comes from service industries. Although
Warburtons core activities fit in the secondary sector, more emphasis has been placed on adding value through services. The
Seondary sector
(Milling of flour and the craft and science of baking the bread)
customers of bread products, retailers, want efficient and reliable services from their suppliers. This helps them to meet the needs of their consumers more precisely.
Tertiary sector
(From bakeries across the country, delivering the bread and providing services for retailers in order to meet customer needs)
Primary sector
Primary industries deal with natural resources. They include
The chain of production sees a product move through the three
farming, fishing and mining. Although Warburtons does not own
sectors of industry. There are a number of different stages in the
farms or actively farm itself, the company works very closely with
chain of production. The system starts with raw materials and may
farmers in the UK and Canada.
involve one or more manufacturing processes. It then finishes with final products that are ready for consumers. During each of the different stages, value is added to the product. Value added is the difference between the cost of inputs which go into making the product and the price that consumers are willing to pay. Value is added in a number of ways, for example:
• converting wheat into finished baked goods
• packaging them in a way that keeps them fresh
• delivering them to places that are convenient for the consumers to purchase from
• using sustainable methods and materials
• having the trusted Warburtons premium brand name.
GLOSSARY
Primary sector: The first stage in production. It includes farming, fishing and the extraction of raw materials.
Secondary sector: The second stage of physical production, involving processing and manufacturing from raw materials. Tertiary sector: The third stage of production which involves the provision of services.
Chain of production: The movement of a product through the sectors of industry. Economy: A system of production and trading that adds value to economic resources. EDITION
118
Warburtons | Managing the Supply Chain to meet Customer Needs
www.thetimes100.co.uk
15
www.thetimes100.co.uk
The basis of Warburtons sustainable supply chain is to provide
‘quality without compromise’. It feels it has a responsibility to continue to deliver fresh, great tasting and high quality products.
As its products depend on using the best ingredients, a close involvement with its farmers is essential.
Every year Warburtons uses more than 400,000 tons of wheat.
This is the equivalent to 14,000 lorry loads. By working with farmers, Warburtons can specify the types and varieties of wheat that are grown. This helps to ensure that the quality of bread is maintained. It also helps Warburtons to bake bread that is consistent in taste, softness and freshness.
More than 95% of wheat for Warburtons comes from established
for their closest bakeries. This reduces transport costs and helps
sources. Working with farmers helps to create the best varieties for
to create a responsible supply chain.
Warburtons bread. It also means that Warburtons can work with farmers to develop more sustainable practices, particularly through
A focus on quality is at the heart of improving bread. Baking
the reduced use of fertilisers. In its aim to develop long-term
bread is both a craft and a science. Using technologies for mixing
sustainable relationships with its farmers, Warburtons prefers to pay
and kneading the dough helps to make it more elastic to create
a little more for its wheat to ensure high quality consistent supply of
the perfect loaf. Quality targets are set to ensure that bakeries
materials. By working closely with suppliers, Warburtons ensures
bake the best bread every time. Bread needs to arrive with
that the standards of these businesses closely match its own. For
consumers in perfect condition. The appearance and quality of
example, it expects them to be fair, decent, honest and open. The
the packaging is important. This helps to create the standards
organisation has a set of ethical principles. These explain its
that shoppers expect.
expectations of the suppliers in terms of ethical standards in employment, working practices and environmental awareness.
Manufacturing is a balancing act. On the one hand Warburtons bakeries and departments have to manage their costs. This
Secondary sector
involves making high quality bread, whilst providing value for its customers. It involves being efficient, reducing waste and keeping
The secondary sector involves manufacturing products and turning them into part-finished or finished goods. Wheat grown for Warburtons is kept separate from other wheat and cereals so supply can be traced back to the farms. It is also milled separately by flour millers, some of whom have supplied flour for
Warburtons for more than 50 years. They turn grain into a partfinished good – flour – the basic ingredient for bread.
health and safety risks down. On the other hand, improved efficiency should not be an excuse for poor quality. Warburtons maintains the values associated with its premium brand whilst maintaining a responsible supply chain.
A manufacturing organisation has constantly to move forward.
Warburtons continually invests in plant, people and products and is also dedicated to producing new products that meet ever-
Grain
Flour
Mixing and kneading dough changing consumer demand. It is aware of new technologies as
Baking
Packaging
they become available. This means it can take advantage of new ways of producing better products. For example, in an attempt to improve energy efficiency, the organisation has put in place increased oven insulation and gas burners that shut down automatically when production stops. In addition to this,
efficiency are important principles. For example, wheat is shipped
Warburtons is investigating the use of alternative and renewable
to the ports closest to the mills. The mills in turn produce flour
sources of energy.
GLOSSARY
Throughout the manufacturing process, sustainability and
Part-finished: Manufacturing process that produces materials that are then used for other manufacturing processes.
EDITION
15
www.thetimes100.co.uk
Warburtons | Managing the Supply Chain to meet Customer Needs
119
www.warburtons.co.uk
www.thetimes100.co.uk
Warburtons also provides retailers with a wide variety of products including loaves, rolls and crumpets.
This enables them to offer consumers greater choice and meet their demands for different eating occasions, such as for snacks, breakfast and lunch.
Conclusion
Warburtons has come a long way since the 1870s. The key has been the commitment that the business has made to high-quality products. A bakery is not just about baking. For Warburtons, managing its business involves taking responsibility for managing supporting them as they plant the seeds on farms within the UK and Canada. It also works with millers. Finally, it provides distinct professional services that help retailers to run their businesses
Tertiary sector
more efficiently. The end result is the satisfaction felt by consumers as they finish the last crumbs on their plates.
The tertiary sector involves providing a range of services throughout the supply chain. Although the services themselves are not physical goods, they provide added value for customers linked with the products that they buy. For example, consumers expect a range of fresh bread products to be delivered to retailers
daily.
From its 14 bakeries and 15 depots around the country
Warburtons is able to meet this expectation. Warburtons has more than 900 delivery vehicles at its various bakeries. It manages the distribution to stores from bakeries across England, Scotland and
Wales. This ensures that products are delivered on time. It also means that the products are fresh when they are delivered and that quality is guaranteed.
To reduce its carbon footprint, Warburtons uses software to track delivery routes to ensure that they are as efficient as possible. It also makes deliveries at different times of the day to avoid much of the congestion on the road and save a substantial amount of fuel.
Warburtons customers are retailers. These may be large supermarkets or small local independent shops. Retailers will their customers. As part of its support for the tertiary sector retailers, Warburtons, for example, provides them with market research data purchased from market research agencies. This data informs retailers of selling trends and buying habits. This enables them to predict the week-by-week stock levels they require. It also helps them to allocate appropriate shelf space for products.
products.
2. Explain how one firm can contribute to the primary, secondary and tertiary sectors within the same supply chain.
3. Analyse how a manufacturing firm can ensure sustainability in its supply chain.
QUESTIONS
often require specialist advice on how best to service the needs of
1. Give examples of how value is added to Warburtons
4. Discuss whether managing the supply chain responsibly improves customer satisfaction.
GLOSSARY
Market research agencies:
Independent agencies that collect market data, write reports on market sectors and then sell the information to organisations within selected industries.
EDITION
120
Warburtons | Managing the Supply Chain to meet Customer Needs
www.thetimes100.co.uk
15
The Times Newspaper Limited and ©MBA Publishing Ltd 2010. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
the whole supply chain. It does this by working with farmers and