examining the supply chain southern ice cream and specialties inc owned by the kroger company l.
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Examining the Supply Chain Southern Ice Cream and Specialties, Inc. Owned by the Kroger Company Beth Borchers Keedick Coulter Marc Noland Cobb Pearson Kroger Owned Companies Grocery Stores Convenience Stores Jewelry Stores Store Locations

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examining the supply chain southern ice cream and specialties inc owned by the kroger company
Examining the Supply ChainSouthern Ice Cream and Specialties, Inc.Owned by the Kroger Company

Beth Borchers

Keedick Coulter

Marc Noland

Cobb Pearson

slide2

Kroger Owned Companies

Grocery Stores

Convenience Stores

Jewelry Stores

overview of southern ice cream and specialties inc
Overview of Southern Ice Cream and Specialties, Inc.
  • Southern Ice Cream (SICS) is owned by and serves as a branch of the Kroger Company based in Cincinnati, Ohio.
  • One of Kroger’s 42 production plants.
  • Located in Marietta, Georgia.
  • SICS serves two roles:
    • An ice cream producer of mostly Kroger brand products.
    • A middleman ice cream buyer of labels made in other parts of the country.
slide5

SICS Supply Chain

Southern Ice Cream

Raw Materials

KMA Distribution Centers

Product’s to KMA’s

Incoming Material’s

*SICS supply network

expenses
Expenses
  • Annual sales at SICS totaled $62 million in 1999, or .14% of the $45 billion sales of the Kroger Company.
    • Costs are split as follows:
supply chain issues
Supply Chain Issues
  • Production Planning
  • Production
  • Inventory
  • Transportation
slide8

Operations at SICS

  • 3 Main Operations occur at the SICS location:
    • Of produced goods: 88% goes to 3 KMA’s,

12% to outside customers.

    • Products are transferred in from other Kroger-owned plants.
    • SICS purchases ice cream products from non-Kroger labels, such as Breyer’s.
production
Production

2nd Floor

Finished Product Storage

Raw Material Storage

1st Floor

Production

inventory
Inventory
  • Completely driven by the production planner.
  • Factors taken into consideration include:
    • Inventories of raw materials and finished products.
    • Sales and estimates.
    • Upcoming promotions.
  • Approx. Annual Cost of Invent. = Avg. Inventory Level * Price * Cost of Capital
  • = 5932.5 pallets * $500/pallet * .20
  • = $593,250.00
specific to sics
Specific to SICS
  • Seasonality of Demand
  • Cleanliness
  • Temperature
  • Capital
  • Space
  • Promotions
capital needs and sources
Capital: Needs and Sources
  • Kroger finances capital investments.
  • Kroger Goals:
    • Increase EPS 16-18% through sales growth, margin improvements, and deleveraging.
    • Need other sources of capital.
  • Merger creates more demand and more debt, therefore less available capital
concerns
Concerns
  • SICS does not have a solid understanding of inventory position.
  • Idle trucks.
  • Kroger sells ice cream to itself.
  • Communication.
thanks
Thanks!

Any Questions?