Unlock synergies
We continued to drive synergies and simplification across the organisation. During the year, we have progressed restructuring initiatives, enabled faster integration of acquisitions and increased supply chain efficiency.
Streamlining and simplifying the organisation structure
Tata Consumer proposed a merger with Tata Coffee Limited (TCL) in March 2022 with the objective of unlocking synergies and creating a simpler organisational structure. While the plantation business of TCL will be demerged into a wholly-owned subsidiary of Tata Consumer, the coffee extraction business of TCL will be absorbed into Tata Consumer. The coffee extraction and tea extraction businesses will be combined on a common platform.
The restructuring is currently in progress and is expected to be completed in 2023. It is projected to result in significant synergies and efficiencies.
BUILDING A COMMON EXTRACTIONS PLATFORM FOR B2B COFFEE AND TEA BUSINESS
Integrated and digitalised supply chain
The transformation journey towards an integrated and digitalised supply chain is in progress. Our focus has been to ensure cost-efficient product availability with the end consumer in mind; this was achieved by securing opportunities to digitise essential elements of the value chain, across planning, delivery and other critical elements of the supply chain, resulting in agility, higher customer service metrics and lower costs.
Driving greater operational efficiency in the international business
We implemented restructuring in various areas of the business to optimise operations and facilitate collaboration, including a US supply chain revamp, a new management hierarchy at our Eaglescliffe production facility in the UK, and the appointment of a CMO (Chief Marketing Officer) to aid with new category development and launch of products. Additionally, financial transactional functions were successfully transferred to the new shared services centre in India.
Sharing knowledge to build expertise
We are applying the knowledge and expertise we have gained in commodity sourcing in our Tea business to our Food business. We took various initiatives during the year to build a more resilient supply chain and bring cost efficiencies in rawmaterial procurement. These included:
- Expanding and diversifying our sourcing points across the country, giving us more buying options and a lower overall cost
- Increasing the footprint of sourcing locations to lower TDC (Total Delivered Cost)
- Building selective inventories of raw materials at low points in the commodity cycle to move away from replacement purchasing towards a more strategic, forecast-based approach
- Purchasing semi-finished goods when prices and conversion costs are advantageous.