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.