Lipton Green Tea Supply Chain

Name : Shivam Rai
Div. : F1M
Roll No. : 66
Supply Chain Management of Lipton Green Tea
Supply chain management can be defined as a combination of

integrated planning, coordination and the control of all processes and
activities along the supply chain to provide a value added service while
reducing the total cost of all stakeholders in the supply chain.
Sir Thomas Lipton, born in Glasgow, Scotland in 1850, created a
marketing empire that within a few decades made his name become
linked with quality tea. Lipton is pursuing Sir Thomas’s aim to make
Lipton teas available to consumers around the world. The United
Kingdom is the top consumer of tea, followed by Turkey and Ireland. The
Lipton teas are more popular now than ever. Lipton is the world leader in
tea production and present in more than 150 countries. At Lipton, there
are tea tasters skilled in the art and science of tea that make sure the
tea is well blended. The green tea is blended in specialised tasting
rooms in seven tea blending regional hubs scattered all over the world.
With the perfect combination of temperature, sunlight and rainfall at high
altitude, east Africa, Kenya and Tanzania and Kericho, Kenya hold
Lipton’s tea plantation and estates. Green tea starts off as fresh leaves
which then move on to withering. They are then rolled in a tea roller and
then head to oxidation and then they are finally dried and ready to be
grinded.
There are many types of tea- black tea, green tea, white tea, oolong tea,
etc. they are produced from the buds and leaves of the same plant; the
difference is in the processing. Tea is harvested all year round, but there
are also certain peak seasons. For example, the highest quality (and
most expensive) Darjeeling tea is plucked in April. After plucking, the tea
leaves need to be delivered to a factory, preferably within 5 to 7 hours’
after harvesting to prevent loss of quality.
Although most plantations have their own processing units, small
growers need to sell their green leaf to independent Bought leaf factories
(BLFs) or to estate factories nearby. At the processing plant, the tea
leaves go through a process of dying and crushing, resulting in factory
tea- also known as “made tea”. This processed tea is then sold in
packets and chests through auctions and international traders, ending
up at the tea blenders, retail and eventually the consumer.
The tea supply chain is characterized by a very strong vertical
integration by just few multinationals. At the global level, 85% of global
production is sold by multinationals. Direct links between manufacturers
and producers are common. The min packers, Unilever (12% of the
global market) and Tata Tea (4%of the market) are key players in
consumer market. They dominate the trade, have a strong influence on
transport companies, and source part of their supplies from their own
plantation.
Producers of tea were traditionally large estates, but the numbers of
smallholders are rising rapidly. China, India, Kenya and Sri Lanka are
the main producers. On estimate, there are 13 million workers involved
in tea production worldwide, of which around 9 million are smallholders.
Processing (dying, fermenting and/or cutting of tea leaves) is carried
out in processing plants. Estates usually have their own plant or one
located nearby. Smallholders often need to travel.
Trade between producers and buyers usually takes place at auctions,
facilitated by brokers. Brokers communicate information regarding
supply and demand, and indirectly determine the price of tea. 70 % of
the global tea production is sold through auctions.
Tea companies (also called packers/ blenders) buy the tea through
brokers. Although the processed tea technically is a finished product,
downstream stages such as blending, packing and marketing are the
most profitable.
Retail direct link between buyers and tea packers are often established,
making access by smaller companies or local producers/processors
more difficult.
Consumers roughly 3/5 of the world production is consumed locally in
the producing countries. Only 2/5 is consumed in non-producing
countries.

Lipton Green Tea Supply Chain

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Lipton Green Tea Supply Chain

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Name : Shivam Rai

Supply chain management can be defined as a combination of

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