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Based on the information in the case study, outline the structure

of the supply chain of which Berchet is a part, identifying key


parties and their role in the supply of product to end-consumers.
Berchet has a monolithic multi-channel system that can analyze in three
different ways. The first is a relatively straightforward relationship
between the toy producers and the retailers. However, such a direct
relationship is only applicable for the major retailers such as hypermarkets
like Carrefour and Tesco in UK and France. As these retailers are
sufficiently large to have their own internal buyers and sales
representatives, they would contact and purchase with the toy suppliers,
such as the plant in Hungary directly. The Hungary plant would supplies to
order and ship directly to retailers.
The next involves intermediaries in the supply chain. Intermediaries are
agents or sales representatives that would choose and buy the toys on
behalf of the retailers. They essentially help retailers to choose what goes
on the shelves. Here, the large intermediaries would have buying teams
who are in charge of purchasing different product categories. These
intermediaries are independent of the retailersthat can be composed of
independent toy stores, departmental stores, variety stores and so on.
The last one is relatively similar to the second onebut the distinction
comes in how there would be buying groups instead of large
intermediaries. This is more unique to countries and markets where there
exists a large number of toy retailerssuch as in Germany, where there
are more than a thousand independent retailers. At such, it is neither cost
effective nor efficient for them to do the liaison and purchasing, or is it
easy for Berchet to manage the sheer amount of stores.
Thus, buying groups are made of buyers who are responsible for different
product categories such as girls, boys, preschool, electronic, or board
games. Within any product category, buyers may process up to 300
quotes from suppliers for one product item.
However, supply chain are not one-directional or linear. In fact, this might
be a too simplistic representation of the back-and-froth communication
and roles played by the various parties. Here is a more detailed diagram/
explanation:
[ INSERT SCREENSHOT OF SLIDES? ]
Firstly, buying groups would visit Berchets headquarters, and trade shows
to view new product proposals.
Next, suppliers will follow-up by sending a one-sheet photo quotation to
gauge the interest of the buying groups and to evaluate the product.
Information such as cost price, size (disassembled and assembled), size of
packaging, weight, battery needs are provided. Samples may also be
requested and used by larger retailers in dummy stores to further
evaluate the product.
Internal evaluation process happens here where buyers would seek
approvals from retailers and discussions and negotiations happen between

buyers and suppliers. If successful, Berchet, the HQ would receive


confirmation of the buyers product selection.
Following that, Berchet would provide product and packing details to
retailers, and requests a supplier order number from the supplier, such as
the plant in China. The supplier would then advises on the order number
and volume requirements, and Berchet would calculates delivery schedule
and deliver to retailer warehouses. Here, theres a lot of back-and-forth
communication between Berchets HQ and its suppliers.
Finally, the products will be available for sale at the retailers. And after an
item has been purchased and its details gone through the retailer's EPOS
system, Berchet will receive order confirmation from the retailerthat it
has indeed been sold.

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