Value chain analysis of Thorntons - Essay Example

Supply Chain Analysis of Thorntons Grade Thorntons is famous for its chocolates. It deals with a variety of products like gift hampers, personalized gifts and seasonal gifts. In order to provide quality product and to gain customer’s confidence and loyalty, a company needs to have an effective value chain system. Such a system will ensure timely acquisition of raw materials, manufacturing, packaging and delivery of the finished product to the customer. This paper will analyze the value chain analysis of Thorntons with regard to inbound logistics, operations and outbound logistics.

INBOUND LOGISTICS Thorntons receives the coco beans, food colours and other such raw material from all over the world. Thorntons has also outsourced the packaging of its products (Niesing, 2008). The inbound logistics of Thorntons has been made effective by occasionally carrying out meeting and auditing sessions with the suppliers of the raw materials. Thorntons also takes great care while choosing the time for the acquisition of the raw materials (Thorntons PLC Interim Report, 2012). OPERATIONS Thorntons has always endeavoured to maintain its manufacturing capability.

The Thorntons keeps periodic checks on its inventory level so that its chocolate plant can work efficiently even during the peak season (Thorntons PLC Interim Report, 2012). The in house manufacturing of chocolate provides Thorntons with an advantage as it can keep a strict check on the quality of the product being made. OUTBOUND LOGISTICS In order to provide timely delivery to the retail stores and then to the valued customers, Thorntons has outsourced its outbound logistics to DHL. About 100 of Thornton’s truck drivers and the warehouse staff members have moved to DHL (Logistic Partners Limited).

This is a wise decision on part of Thorntons to put an end to its outbound logistics and hand it over to an expert like DHL which has been in this business for many years. This move is anticipated to save more than £2 million yearly so Thorntons will also experience financial stability due to this action (Logistic Partners Limited). Moreover, this will also make it easier for Thorntons to deliver their products in time to the stores during the peak season (Thorntons PLC Interim Report, 2012).

In order to add value to its supply chain system, Thorntons has maintained cordial relations with its retailers so that they can make the communication process better and hence increase the sales of their chocolates. Thorntons management periodically meets its retailers and try to address the key concerns of the retailers (Thorntons PLC Interim Report, 2012). CONCLUSION The strategic decision of Thorntons with regard to the value chain system has proved to be quite beneficial for the company.

Thorntons believes in a philosophy that you cannot do everything under the sun so it has outsourced some of its value chain operations. The company can now solely focus on the manufacturing quality chocolate and use the services of the experts to pack the product and deliver it to the end user. This has led to a considerable rise in the sales volume and also on customer satisfaction. Furthermore, it has provided Thorntons with a competitive edge over its competitors. REFERENCES Logistic Partners Limited, 2011.

Sweet Deal for DHL as Thorntons Outsources. [Online] Available at: < http://www.logistic-partners.com/486/sweet-deal-for-dhl-as-thorntons-outsources > [Accessed 14 March 2012] Niesing, Roberto, 2008. Analyzing Thorntons Based on Different Strategic Models. [Seminar paper] Available at: [Accessed 14 March 2012] Thorntons PLC Interim Report 2012. [Online] Available at: < http://investors.thorntons.co.uk/download/pdf/interim-report-2012.pdf> [Accessed 14 March 2012]