operation management report

1. Yakult-Danone
Operations
Management
Report
2015
BY: MANIKYA SHARMA- 22/016, NIKHIL PAL SINGH -
22/019, V.SRINIWAS - 22/029, VIPUL BHATIA - 22/031
APEEJAY SCHOOL OF MANAGEMENT
3/5/2015

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INTRODUCTION
Yakult Danone India (P) Ltd is a Joint Venture (JV) between Yakult Honsha, Japan
and Groupe Danone of France, both of which are global probiotic leaders. The JV
was formed in 2005 to manufacture and sell probiotic products in the Indian
market.
Yakult, a probiotic drink was launched in India in 2007, and is presently available
in Delhi, NCR, Nasik, Chandigarh, Punjab, Jaipur, Mumbai, Pune, Hyderabad,
Chennai and Bangalore. Yakult is manufactured at an ISO 9001:2008, HACCP and
OHSAS 18001:2007 certified manufacturing facility in Sonepat, Haryana in India.
As a pioneer in probiotics, Yakult has formidable research capabilities and product
technologies in the field of probiotics.
Yakult Central Institute for Microbiological Research has for years researched the
use of intestinal bacteria as a factor in health maintenance, conducting a wide
range of studies on the benefits of microorganisms in Japan.
In India too, Yakult Danone India is working actively to build awareness about
probiotics and contribute to a healthier society. Yakult's benefits have been
scientifically established through years of research and 30 million people in more
than 30 countries drink Yakult every day.

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YAKULT’S WORLDWIDE PRESENCE
SHARING OUR HOPE FOR PROBIOTICS WITH THE WORLD!
Yakult is helping people throughout the world to enjoy healthier lives. It has an
overseas network based on the simple idea that "Yakult = Good Health"

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WHY YAKULT?
Yakult is a delicious probiotic drink that helps improve digestion and helps build
Immunity. Yakult contains 6.5 billion beneficial bacteria (Lactobacillus casei strain
Shirota) that reach our intestines alive and restore the balance of the beneficial or
friendly bacteria in the gut. Ithelps improvedigestion and helps build immunity. It
has been scientifically proven to be safe and effective.
Over 30 million people in more than 30 countries including India trust Yakult and
drink it every day!

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OPERATIONAL STRATEGY OF YAKULT
S W
O T
STRENGTHS
S1: High brand awareness
S2: Strong brand
reputation with health
benefits
WEAKNESSES
W1: Limited
flavor
W2: Storage
Difficulty
(temperature)
W3: Limited
Distribution
channel

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BCG MATRIX
OPPORTUNITIES
O1: Trend in health
concerns
O2: Increase in number of
convenience stores and
hypermarkets
THREATS
T1: Competitors provide
many flavors, packaging,
and promotions
T2: Expiration of
lactobacillus patent gives
rise to new competitors
Cash Cows
Stars

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Few of the quality control measures:
- More than 100 checks are carried out to ensure that the final product
taste’s right and special care is taken to safeguard the viability of the live
Yakult bacteria.
- Workers wear special protective clothes.
- Workers sanitize their hands and pass through the air shower before
entering the production area.
- The bottling and filling area is controlled with germ free air.
- Every batch of Yakult produced is monitored for 24-hours before it is
dispatched for sale.
- Frequent testing at Yakult’s on-site quality control division makes sure that
each bottle of Yakult has more than 6.5 Billion beneficial bacteria-
Lactobacillus Casei Strain Shirota, and that the product is of the highest
standards, right up till the date of expiry.
FORECASTING
Yakult’s sales department usually uses Regression Analysis for forecasting sales
for the upcoming months. Their forecastis mostly dependent on sales.
QUALITY STANDARDS & ACCREDITATIONS
Yakult follow

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PRODUCT DESIGN
RESARCH&DEVELOPMENT (TOKYO)

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SOFTWARES
Omron-Switches & Sensors-Ellen Bradley
1. SCADA (supervisory control and data acquisition) is a system operating with
coded signals over communication channels so as to provide control of remote
equipment (using typically one communication channel per remote station.
2. Mitsubishi PLC & Panels
3. Siemens Controllers
FACILITY LAYOUT
- The Sonepat facility is built to produce 1 Million bottles per day. However,
they are only using 15% of the total capacity i.e. 150,000 bottles are being
produced per day.
- There are 70 employees currently working in this facility.
- The cold storages & warehouses are located within the facility campus to
save on time.
- The facility also has generator back up – 500 KVA * 3 units: 2 operational, 1
backup on rotational basis.
- The waste produced is Nil according to them. However, for utilization the
water used in the production process they have installed ATP plants for
collecting & treating the Sludge so that the resultant recycled water can be
used for gardening purposes.

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- Their company policy allows them to save 30% of the total land area for
green area and it is being implemented across all the factories worldwide.
FACILITY LOCATION
The Rai, Sonepat was chosen as the best option to setup the factory as it was
having fewer constraints with regards to ground water, electricity etc.
According to them, Haryana government had supported them as their policies are
quite companies friendly with regards to foreign investments.
Also, the labour is quite inexpensive over here and no problem regarding them.
PROCESS DESIGN
Making of World’ Original Probiotic Drink
Yakult’s first state-of-art probiotic factory in India is located at Rai, Sonepat,
Haryana. Built on 8-acres of land, this plant has a total production capacity of 1
Million bottles per day that will be achieved in a phased manner. The
manufacturing process is automated and follows strict quality control measures
to ensure that each Yakult bottle has more than 6.5 Billion live beneficial till the
end of its shelf life (40 days).

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They follow Batch Production process with a continuous flow. No rework can be
done i.e. if there is any fault or malfunctioning of the mixture in between the
process, thewhole batch has to be discarded. They cannotgo back and re-work or
rectify the problem.
The suppliers are based all over India. Milk is procured from Hatsun & Dynamix.
While, Sugar is procured from Mawana & Symbaoli and Glucose is procured from
Maze Products & Sukhjeet.
The total cycle time is 70 Seconds. This means that it takes 70 seconds for a bottle
of Yakult to get ready.

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SUPPLY CHAIN MANAGEMENT
(VALUE COMMUNICATION)
Distribution
Yakult does not believe in “Direct Selling”. Itdoes not haveany Distributors. It has
setup its own offices in every city.
Yakult’s unique distribution process -
• Yakult has roped in actress Kajol as brand ambassador and has an army of
girls to home-deliver Yakult on scooters, plans to launch a low-sugar variant
of Yakult.
• The Yakult Ladies, key components in the company’s distribution system,
are young, dynamic women propagating good health and spreading cheer
wherever they go.
• This system has been specifically created to help customers fully
understand the health benefits of probiotics, along with a free sample, to
help familiarize them with the delicious taste of Yakult.

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Yakult Ladies
• There are more than 240 trained Yakult Ladies operational in Delhi & NCR,
Jaipur, and Chandigarh and more than 500 in Mumbai and Pune.
• There are 80,000 Yakult Ladies across the globe, working through regional
marketing offices or ‘Centres’. Internationally, this system has been the
backbone of distribution for Yakult in more than 15 countries.
• Each Yakult lady is given extensive training and then allocated a specific
area for propagation and delivery. Usually she delivers up to 200 bottles
every day and earns a commission on every bottle sold, thus becoming
financially independent.

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CHALLENGES FACED BY YAKULT IN INDIA
- Besides doctors, most consumers do not know much about probiotics.
Making them pay Rs 10 for a 65 ml bottle is a challenge.
- Yakult needs to be stored at a controlled temperature of below 10 degrees
Celsius. This is why Yakult have been prompted to provide coolers at many
stores.
INDIAN PACKAGING FOR YAKULT