Supply Chain Management

 Supply Chain Management
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Supply Chain Management
The thirst of beer is increasing day by day in the modern globalized world today. Its
demand never remains stable. The global industries producing beer are facing many challenges
in last five decades. In this paper, the issues and challenges facing by Brewery Industry of United
Kingdom will be discussed and explored.
The major issues and challenges of UK brewery industry include increasing and falling
customer demand, multiple competitive products launch in the competitive markets, different
keen demands and requirements of retailers and customers, and competitive hard access of the
competitive global and local markets. These issues and challenges are competitive for the UK
brewery industry as it is considered as the largest and competitive industry in the global markets.
In the era of 2007 to 2014, UK brewery industry had to face a decline in its production
volumes. Researchers and studies showed that the reasons behind it were the global as well as
the demographic changes, issues of distribution channels, information system integration in the
industry, alternative beverages options like cider, wine and many health related drinks, tough
international trade rules and regulations, and taxes and the global economic recession.
Issues of the distribution channels in the UK brewery industry:
UK brewery industry is facing the issue of the distribution channels. The issue is not just
the volume and demand related but also the competitive pressure is affecting the distribution
channels of the industry. Distribution channels include the marketing campaigns, sales and
pricing processes. The strong growth of the alternatives of beer is affecting the sales process of
the industry. This growth is taking the attractive profit margins of the brewery industry. The
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alternatives are competing with the industry and giving challenges for the future growth and
profit.
The production innovation along with the brewery industry is rapidly increasing with
time, like small brewers or craft brewers. In 2014, the production of beer at the global level
increases just 0.5 percent, while the small brewer’s rate of production increased 18 percent. It
gives almost 11 percent volume share to the beer production industry. But unfortunately, in the
UK the brewery industry was unable to catch up this trend of the global competitive market, but
it launched many new beer products to cover this fall as compare to the beer products launch in
the year of 2013.
The retail stores, supermarkets, large supply chains of distributors and multiple beer
stores are now a most important distribution channel in the brewery industry of UK. It is
affecting the overall profit margin of the industry. The manufacturers of the beer products are
now pressurized by the retail store's sales prices and profits margins. The retail stores are
becoming competitive in the markets by applying low profits margin techniques on the
manufacturers even they are not offering the discounts.
The demands of retailers are increased, and they prefer small and frequent product
deliveries just to decrease their cost related to warehousing. They are pressurizing the
manufacturers of beers and encouraging them to innovate or build some new merchandising
areas because they want to reduce the store’s cost of refill the stock.
The retail store owners are avoiding the revenue declines which are negatively affecting
the beer products manufacturers. There are increasing gaps in the inventory of the new products.
Retailers are keen, and they have the opportunity and option to go anywhere else in the market to
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support its demands. This will happen if the manufacturer of beer will be unable to supply the
products to the retailers on their huge demands and multiple promotional initiatives. The
Brewery industry of UK has to learn flexibility to appropriately operate the retailers and
manufacturers to increase the focus on minimizing the costs.
UK beer industry has to build new category management skills because the distribution
channels are forcing it to adopt new strategies and techniques. The manufacturers have to focus
on the demand, volume and supply of the products and they have to create or make a new
balance between the volume and price. The manufacturers of the beers have to adopt new
techniques and measures to attract the customers like small pack size and premium positioning
multiple and different styles.
The trade of whole products needs and require change. The manufacturers of UK industry
are adopting new measures to enhance the beer production profit margins. It includes the
specialist wholesale dealers of the beer products, which will enhance and increase the capital
strength in the competitive markets.
Issues of information system integration in the UK brewery indu