Company Background
Yakult is established in the 90s in
Japan by Dr. Shirota. He was doing a research on
bacteria and how they interact with a person’s body. By the help of his
colleague and books they found the Lactobacillus casei Shirota which is now
used in the production of milk-like product called Yakult. At the beginning the
milk was used with medical purposes to cure stomachaches and disorders. However
few years later it was introduced to the world market. It first gained brand
recognition in Japan and Taiwan, but then in 1966 the product was transferred
to Brazil. This was the moment when Yakult started its international growth and
today the milk is sold in 31 countries, has plants in Europe, USA, and South
America. There are two kind of the milk- a red (classical) and a green one. The
main differences between them are the price and the level of sugar. However the
price on the international market is fixed.
Visit Outline
First we had a presentation about
Yakult. It included all from history, how and where the bacteria is produced
and put in the milk. We had the chance to try one of the products, which was an
interesting experience since we were exchange students and didn’t know that
much about it. Also we could see different packages used for special holidays
like Christmas, or what other products the company is producing. After this we
had a tour around the plant, which showed us first-hand the production line.
What was interesting was how clean everything was and the precautions they take
in order to keep the environment like this. There are workers responsible for
monitoring the quality of the milk by taking a sample from the production line
and testing it, which proves the quality obsession of Yakult. The production
line itself was very well organized and monitored by few employees in case
something goes wrong with the machines. The employees were very friendly and
open for question which was helpful for us as student interested in the supply
chain management.
Supply Chain Aspects
The supply of the bacteria for
Hong Kong is coming straight from Japan since this is where the main plant is.
In the first few years after a plant in Hong Kong was opened the production
line was working few days in the week, while now it is working daily producing
millions of milks.
We came to know that the packaging
of Yakult had a strategically value. It is so small in order to drink at once
and also not to allow oxidizing since this will lower the effect of the
bacteria. What we found interesting while doing our research was that a pack(
in Australia and not only) a pack consist of 5-6 bottles which is consistent
with a statistic which states that the average family consist of 5-6 members.
This makes is comprehended with the slogan for Yakult “Everybody. Every day”
Yakult are having their own
delivery system which means that’s is delivered to independent supermarkets,
health food stored, milk bars, etc. by highly trained consultants to ensure the
product is always fresh and stored correctly. In the presentation was mentioned
that if Yakult wants their product to be a first raw product in the Park’n’shop
they need to pay a certain amount of money, which was not mentioned but implied
it was a big one.
As far as for the warehouse system
it is delivered directly to the warehouses of major supermarkets. From there
the product is distributed to individual stored from the same chain. Curious
thing was that in Japan one can get Yakult products delivered to the door. This
service is called Yakult Mama.
Q&A
One of the weaknesses of Yakult is
the new competitors entering the market. However the well-recognized brand name
and quality are enough to keep the demand for its products high. Moreover the
company is trying to develop new products like food and beverages, cosmetics
and pharmaceuticals using probiotics. What the milk is offering is something
that can’t be found in other drinks especially in Asia. Some parts of Balkans
and Turkey the same bacteria is used in yoghurt, however this doesn’t put any
direct threat on Yakult. Also we have to bare in mind that for different
countries the packaging design is different, not the size thought, which adds
diversity to the production line. However in the Hong Kong plant this is not
possible only because the capacity doesn’t allowed it.
The demand for the milk is
increasing every year which implies the stability on the market. However is
hard to forecast correctly how many units one should produce. Since more
mainlanders are now coming to Hong Kong to buy the milk the supply has to be
updated regularly. To forecast the demand employees are send to retail stores
to collect data on the demand which is integrated after this on the production
line.
As we mentioned the quality of the
products is observed very closely. Once the milk is ready, some tests are ran
and after the packaging as well. A sample from every production cluster is
collected and then tested. The reputation of the company is very important
taking into account the product they are selling. So we can conclude that this
is one of the main things Yakult is looking after.
Even thought the bottling of the
product is small we see as a competitive advantage. First is one of the few
products that a customer can find in such a small packaging which is
interesting. Also it is convenient just to buy and drink the whole content.
This has a reason behind it as mentioned above, the milk is preserved better
and the bacteria have a stronger affect. As far as the level of sugar is
concerned few year ago a product with less sugar was released on the market.
The outcomes were not that satisfactory neither for the customer not for
Yakult. People didn’t like because the taste was too strange and sour for them,
which is normal because of the bacteria used in the milk. However, Yakult
Company has done several tests to make a balance and launch a new product which
contain less sugar which is known as the Yakult milk with the green packaging.
Additional Learnings from the Visit
Through the visit I could see how
presentation skills are important for delivering information especially when
one stats working the business field and not only. Also paying attention to
small details and monitoring your own and sometimes others job as well. In this
case the product is used by many people daily, by young and old, and if
something goes wrong peoples life could be endangered.
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