OPERATION MANAGEMENT

( PMG 3093 )

TOPIC:

PREPARED BY:

NAME ID NUMBER

MUHAMMAD HAMIZAN BIN MD HALMI PTM 160705323

MUHAMMAD AMIRUL BIN MAT YAMIN PTM 160705335

ALIYA SYAFFA AMIRAH BINTI SHAMSURI PTM 160705420

AZZAHRA NUR HUMAIRAH BINTI RAMLI PTM 160705463

INTRODUCTION OF YAKULT COMPANY

The Yakult cultured milk drink in Malaysia is proudly Malaysian made, from the finest selected
ingredients. Although Yakult has enjoyed 70 years of successfully promoting better health
overseas, it is a new product to Malaysia. Yakult (Malaysia) Sdn. Bhd. commenced production
in February 2004 and is a wholly owned subsidiary of Yakult Honsha (Japan). Yakult has
committed millions of ringgit to establish and operate its Malaysian manufacturing operations
in Seremban, Negeri Sembilan and head office in Glenmarie, Shah Alam, respectively. The
product that is marketed in Malaysia is Yakult Ace, an improved version of the standard Yakult
cultured milk drink available in other countries worldwide. Yakult Ace has a higher
concentration of the probiotics Lactobacillus casei Shirota and added nutrients: calcium, niacin
and vitamins B6, B12 and D. Yakult (M) Sdn. Bhd. Currently employs over 88 people
throughout Malaysia. Our employees include production workers, sales consultants, customer
service officers, administrative staff, managers and human resource personnel.
COMPANY BACKGROUND

Yakult (Malaysia) Sdn. Bhd.

Yakult (Malaysia) Sdn. Bhd. was incorporated in February 2004 and it is a subordinate of
Yakult Honsha Co. Ltd. a Nipponese listed company and a world-renowned maker of probiotic
merchandises. The Company upholds the doctrine of advancing good wellness and
preventing diseases through the usage of probiotics. There is merely one Yakult mill in
Malaysia which is located in Seremban, Negeri Sembilan and its Head office is in Glenmarie,
Shah Alam. This mill produces Yakult for the whole of Malaysia, every bit good as for export
to neighbouring states. Besides that, there are branch offices in Johor Bahru, Melaka, Penang,
Kuantan, Ipoh, Seremban, and Kota Bharu.

MISSION OF THE COMPANY

Yakult's mission is to contribute to the health and happiness of every person around the world
through the pursuit of excellence in life sciences and the study of microorganisms. We
continue to spread the message of preventive medicine and the benefits of probiotics, such
as Lactobacillus Casei Shirota. One by one, city by city, country by country, we deliver this
message in the shape of a small bottle - a bottle that contains around 8 billion live and active
good bacteria.

VISION OF THE COMPANY

Yakult pushes forward with the quest for new possibilities for probiotics in the academic and
medical fields. Yakult work with doctors, scientists and dietitians worldwide to help people with
medical conditions and find ways our probiotics can be used to help people. Yakult's research
has led to many significant medical advances, even beyond the probiotics field, such as the
development of the Campto Injection, the first-line drug for colon cancer in the United States.

The human digestive system has over 500 types of bacteria, most of which are good and keep
you healthy. A healthy person has more good than bad bacteria, but any change in the body's
bacteria balance can cause digestive issues. With probiotics, the good bacteria help reduce
the possibility of bad bacteria taking over. By doing so, probiotics may help balance the
digestive system and improve overall wellness.
ORGANIZATION CHART
PRODUCT BEEN PRODUCES

About Yakult – The Probiotic Health Drinks

Presently there are two types of Yakult in the market which are the Yakult Ace and Yakult Ace
Light Yakult Ace is the first merchandise introduced into the Malaysia market. Yakult Ace Light
is the latest merchandise which contains 50 % less sugar and a less sweet gustatory sensation
as compared to Yakult Ace. Yakult Ace and Yakult Ace Light have HACCP and HALAL
certification which guarantee that the merchandises are safe to devour and suitable to all
Malayan including the Malays.

There are two types of Yakult. Yakult Ace (original) and Yakult Ace Light. Yakult is packaged
in an 80ml bottle and each bottle contains at least 30 billion of probiotic bacteria “Lactobacillus
casei Shirota” (Shirota Strain). Both Yakult Ace and Yakult Ace Light are about non-fat and
are tantamount to 0. 5 Weight Watchers points. Besides. Yakult is merely available in one
spirit and one colour. This is because different spirits require extra colourings and
preservatives. So Yakult is wholly free of preservative. Conditioner, stabilizer every bit good
as unreal colouring.

The natural (chocolate-brown) colouring material of the Yakult drink is resulted from
caramelization procedure during the warming of milk and sugar. Yakult has a low Glycemic
Index (GI) which means that the sugar in Yakult enters the blood bit by bit and it does not
significantly increase the blood glucose degree. Yakult gustatory sensation sour. This is
because during agitation the good bacterium’s produce organic acid such as lactic acid which
tastes rancid. Hence sugar is needed to equilibrate the really rancid gustatory sensation due
to high concentration of good bacteria.
1) Yakult Ace (80ml)

 Has a ruddy palpebra.

 Has glucose and saccharose (common sugar) which has about the same sugar degree
as an apple. Contains 63 Calories energy per bottle.
 Contains H2O skimmed milk pulverization. Calcium. Vitamin B6. B12. D and Niacin
(Vitamin B3).

2) Yakult Ace Light (80ml)

 Has a bluish palpebra.

 50 % less sugar comparison to Yakult Ace.
 Contains 46 Calories energy per bottle.
 Contains H2O. Skimmed milk pulverization, glucose. Fruit sugar (fruit sugar) and
Maltitol as a natural sweetening which is made from maize.
FORECASTING
Qualitative Approach

Yakult Current Philosophy

- Yakult contribute to the health and happiness of people around the world through
pursuit of excellence in life science in general and our research and experience in
microorganism in particular

Yakult Future Philosophy 2020

- Promote the idea that a healthy intestinal tract leads to a long life, to as many
people as possible on earth
- Apply a unique combination of preventive medicine and therapeutic medicine to
realize a healthy society
- Offer satisfaction and happiness to customers by whole-heartedly delivering the
best technology with gratitude

Quantitative Approach
PROCESS DESIGN

PROCESS OF THE PRODUCT

1. Mixing of Raw Ingredients

Live Lactobacillus casei Shirota strain is cultured in a 'seed tank' in our laboratory. Skim milk
powder is mixed with sugar, glucose and filtered, sterilised water to make a sweet milky
solution.

2. Sterilisation

The sweet, milky solution is sterilised at a high temperature for a short time, destroying any
bacteria that may be present. The solution is then transferred to a 6,500-litre culture tank via
a closed system of pipes and valves.

3. Culture Tank

The temperature of the tank is reduced to 37°C and live Lactobacillus casei Shirota strain is
added. The solution is allowed to ferment for about one week until the number of Lactobacillus
casei bacteria reaches an ideal concentration.
4. Mixing and Storage Tank

The concentrate is transferred to a 12,000-litre mixing and storage tank. The tank is chilled to
around 2° C. Sterilised flavours, syrup solution, vitamins and calcium are added to the
concentrate. Prior to bottling, the concentrate is diluted with filtered, sterile water.

5. Injection Blow Moulding Machine

The plastic bottles are produced on site. The bottles are made from polystyrene.

6. Bottling and Packaging

The bottles are wrapped with individual bottle labels. Then, they are filled with Yakult, capped
with a foil lid, sealed and transferred along the conveyor belt to the packaging facility. Single
bottles of Yakult are sorted into groups of five and shrink-wrapped in polypropylene film. Ten
"5-packs" are grouped together and wrapped again in polyethylene film and then heat shrunk,
forming a 'carton' of 50 Yakult bottles.

7. Refrigeration Room

Finished products are kept refrigerated before delivery to stores.

8. Yakult Quality Assurance

Yakult maintains a comprehensive quality assurance program in order to ensure that our
product is of the highest quality. For this reason, samples are collected for laboratory analysis
throughout the production process to confirm that the quality assurance measures in place
have been effective.

Our testing involves more than 150 samples per production run, upon which a total of more
than 200 tests are conducted. These determine Lactobacillus casei numbers, check for
potential contaminants, microbiological quality, composition, acidity, physical attributes and
taste. In addition, each bottle is inspected for undesirable markings and incorrect printing.

Quality assurance measures are in place to maintain standards for personnel and factory
hygiene, equipment cleaning, processing methods and parameters, and product handling.
Yakult's quality assurance utilizes a system called "Hazard Analysis and Critical Control
Points" (HACCP). The principles of HACCP are internationally recognised as an excellent
method for assuring stringently high standards.

9. Waste Management

Cleaning - Yakult adheres to a comprehensive hygiene and sanitation program, following a

cleaning program that is predominantly governed by CIP (Cleaning in Place). Steam, an
environmentally friendly cleaner, is used to sterilize the pipes and tanks. A single phase
chemical cleaner is used, reducing the numbers of chemicals introduced into the drains.
Chlorine based chemicals are not used.

Solid wastes - The amount of solid waste is relatively small.

Liquid wastes - Any liquid waste goes into a holding tank in our water treatment facility. The
acidity (pH) of the water is adjusted with acid or alkaline before being released into the sewage
system.
JOB HIRING
To reach the most appropriate candidates for the job, write an ad that speaks to them clearly
and directly. Include the type and level of the job in the headline, such as senior accountant
or junior copywriter. Describe the job responsibilities in an appealing but clear way, starting
with the most important duties. List requirements such as education, experience, skills or
certifications. If space permits, use bullets so that readers don't miss important points.

Local Newspaper

Local newspapers will find local candidates, with the advantages that they already know the
area, have a place to live and won't be distracted by having to assimilate their families, enroll
children in school and find their way around.

Online Jobsites

Many online job websites exist where you can advertise your job, often for free. The downside,
though, is that you may receive thousands of resumes from applicants that aren't a great fit for
the job. Nearly every industry has one or more job websites targeted toward specific types of
jobs, such as nursing or journalism.

Social Networking Sites

Post job openings on social networking sites -- some showcase your company in a casual,
friendly atmosphere, while others target a professional audience. These sites are widely used by
millions of people. If your company has a blog -- even if you aren't the blog writer -- mention the
opening there too.
AGGREGATE PLANNING DEMAND OPTION

Aggregate planning strategies

There are altogether eight aggregate planning strategies that Yakult can option for. These
strategies can be grouped into two options which is Capacity options and Demand options.

Distribution Strategies
Distribution Channels

1. Market Intermediaries

Yakult sell their products through several retailer outlets such as major supermarket,
hypermarkets and stores.

For example: Jaya Jusco, Tesco, Giant, Mydin and etc.

2. Yakult Trucks

Yakult also sell their products through mobile selling by using their own Yakult trucks.
Sometimes, Yakult trucks can be seen at night market or primary schools.

3. Home Delivery Service

In year 2007, Yakult started a special home delivery system in Malaysia via “Yakult
Ladies”. They visit housing areas to deliver Yakult right to customer doorstep. The delivery
service is free however, it is only available in certain areas for now. Selangor, Kuala
Lumpur, Melaka, Seremban, Penang, Johor and Perak are the only area that Yakult cover
so far.
Promotion Strategies
1. Supermarket Sampling

In order to convince people to put aside their misconceptions of what Yakult might taste
like, Yakult Company has implemented the sampling program in major supermarkets such
as Jaya Jusco, Tesco, Giant, Mydin and so on to provide consumers with the opportunity
to taste Yakult’s unique fruity flavour.

2. Sales Promotion

Yakult was able to increase its market share in the market by coming out with the double
pack where 2 packs of Yakult drink are bundle together and sold at a reduced price of
RM8.50 for Yakult Ace and RM8.90 for Yakult Ace Light. In trade promotions, Yakult was
able to obtain extensive distribution and shelf space in major supermarkets such as Jaya
Jusco, Tesco, Giant, Mydin and etc.
MANAGING QUALITY

 Differentiation

Yakult consists of the beneficial bacterium namely “Lactobacillus caseiShirota strain” which is
the strongest strains of beneficial bacteria and is the main ingredient in Yakult, and has been
shown to replenish the supply of healthy bacteria in our intestines and benefit human health.
This well-known and specially cultivated probiotic bacteria distinguishes Yakult cultured milk
from others such as Vitagen. Each bottle of Yakult consists of 30 billion of this probiotic
products. Yakult direct competitors are Vitagen, Nutrigen and Solivite whereas indirect
competitors are Nestle Bliss, Dutch Lady and Tropicana Twister.

 Product Bundle Pricing

Yakult came out with the double pack where they combine 2 pack of Yakult drink into 1 and
offer at a price of

2 packs of Yakult Ace – RM 8.50

2 packs of Yakult Ace Light – RM 8.90

Originally if consumers were to buy 2 pack of the drink separately, it will cost them RM 8.60
for Yakult Ace and RM 9.40 for Yakult Ace Light.
OPERATIONAL STRATEGY

Strengths

 Dynamic Research & Development power

Retrieved from the annual report of (“Global Yakult”— Entering a New Growth Stage, 2013),
one of the strengths portrayed by Yakult is its dynamic research and development power. With
its 252 medical doctors and scientists, they actively pursue research aimed at applying
bacteria effectively in the prevention and treatment of many diseases.

The R&D Division tails basic research in life science meant at applying and developing basic
materials in pharmaceuticals, food, cosmetics and other fields. Besides that, Yakult does their
research and development at the Yakult Central Institute for Microbiological Research, which
is situated in Tokyo, Japan. The aim of this central is to the study is to the use of beneficial
bacteria in the promotion of health. Therefore, there are continuous improvements in Yakult’s
products that can improve consumers’ health for today and in the future.

 Good distribution channel

Another essential strength of Yakult is the unique distribution channel by Yakult Ladies. It is a
type of delivery service that delivers Yakult cultured milk drinks directly to the consumers’
home through a network of Yakult Ladies. According to managing director Kouichi Nakayama
(abhishek_g, 2012), door-to-door sales through the Yakult Lady System are more profitable
than supermarkets sales. In Japan, more than 60% of Yakult products are distributed by Yakult
Ladies. They deliver door-to-door every day, from rural areas to high-rise buildings in the city.

However, in Malaysia, Yakult Ladies is also available in delivering of goods. However, it is

only available in certain place such as Klang Valley, Negeri Sembilan, Melaka, and Penang,
Kuantan, Ipoh and few other areas. The best thing is there is no minimum order or delivery
charge for the products (Fong, 2007).
Weaknesses

 Less product choice for customers in terms of flavours

The first weakness of Yakult is lack choice of flavours. There are only two flavours available
which are Yakult Ace and Yakult Ace Light. Unlike its competitors, such as Vitagen and
Nutrigen, these two brands come out with products with variety of flavours which will attract
more people to buy their products. As Malaysia is a multiracial country, different races of
people have different tastes. Thus, Malaysians usually prefer to choose their drinks from a
variety of flavours.

 Storage difficulty
Second is storage difficulty. The products are fermented milk drinks which contains active
bacteria under low temperature. However, if the temperature increases, the bacteria will
eventually become inactive that will turn the taste sour. This is because the bacteria will begin
to make lactic acid when the temperature drops (FAQs, 2010). Therefore, refrigerators are
necessary. However, consumers who do not own a refrigerator will find it a problem. By the
way, it will also lead to a storage difficulty for retailer outlets with little storage capacity as they
still have other products brand they need to keep. This will cause an imbalance of stock
availability during different time of the outlets. This problem also influences consumers’
purchase intention that does not have a refrigerator.

 Smaller packaging and higher price compared to competitors

Another weakness of Yakult is that the packaging of Yakult is small compared to its
competitors. One bottle of Yakult contains 80ml cultured milk drink while competitors such as
Vitagen and Nutrigen serve in 125ml per bottle (TK-eShop, 2010).

Besides that, according to Yakult, it is fine for consumers to drink more than 80ml of Yakult
cultured milk. Therefore, consumers who drink more than one bottle may go for other
competitors’ product who sells in larger packaging (FAQs, 2010).

Yakult products are sold in a bundle of 5 bottles, which is the same with its strong competitors
such as Vitagen and Nutrigen. However, the Yakult cultured milk drink’s price is higher than
the competitors, who offer their drinks in bigger bottles too.
Opportunities

 Trends in health concerns

Few studies shows that more and more people are concerned about their health problem and
health awareness is becoming increasingly important nowadays (Rollins, 2008); (Senterfitt,
Long, Shih, & Teutsch, 2013). This is an opportunity for Yakult since Yakult has already
scientifically proven that their products are good for health. Consumers are turning to dairy
products, yogurts and so forth to start their day.

In Yakult’s advertisements, the company informs consumers that their products are probiotic
drinks which are good for people’s health. This increases health awareness of the people.
Besides that, Yakult’s brand recognition also increases among consumers during this process.
The creative thinking of Yakult’s advertisement helps in promoting health by emphasizing
beneficial bacteria for intestinal balance of consumers which ultimately leads to good health.

 Increase in number of convenience stores and hypermarkets

According to (Wong, 2007), the number of convenience stores and hypermarkets are
increasing. It means that Yakult’s distribution channel will also increase. Yakult’s product can
be sold in more and different places. Consumers will also find it easier and more convenient
to buy Yakult’s product from the hypermarket or convenience stores nearest to them.

Threats

 Intense competition
Yakult faces a tough competitive environment in the market. There are similar healthy foods
and also probiotic drinks in the market. Yakult’s main competitors are Vitagen and Nutrigen
that has strong brand recognition in the Malaysian market. Vitagen is the first cultured milk to
be introduced in Malaysia which is also known as the number one cultured milk in Malaysia.
As for Nutrigen, it also provides cultured milk which is similar to Yakult and also Vitagen. These
competitors have their own competitive advantages compared to Yakult in terms of the
flavours they offered which can suit different consumers’ taste with their different flavours
available.
  Low switching cost
Besides that, consumers in Malaysia do not incur high switching cost if they choose to switch
to other category of healthy foods. Yakult’s price offering is also a threat as they offer in higher
prices and also smaller packaging compared to competitors. Consumers who are price
sensitive may choose competitors’ product instead of Yakult’s. Thus, Malaysians can switch
to another drinks or brands whenever they want if there are substitute products available with
lower prices. They can also shop favourably and also choose selectively without sticking to
one supplier.

 Competitors use aggressive marketing technique

Yakult’s competitors uses aggressive marketing plan to promote their products such as
advertising in traditional media like television advertisement, radio, social network sites and
forth, especially Vitagen. With this, competitors are more recognizable to consumers than
Yakult. As Yakult does not usually do aggressive advertisements to promote their brand,
consumers are more likely to be aware of competitors’ brand than Yakult. Besides that, the
marketing plans that are not heavily invested are usually advertisements that are easily
duplicated.

 Decrease in consumer’s purchasing power

Millions of middle-class Malaysians are suffering from low consumer spending growth while
increasing in state controlled electricity and gasoline costs since 2008 (Koon, 2014). As a
result, mid to higher end choices of beverage suffered a decrease on the sales (Consumer
spending to slow down in 2014, 2014); (Koon, 2014). The economic downturn has contributed
greatly to the slow growth of the purchasing power as Yakult is not a necessity in consumers’
daily life. Yakult is a probiotic drink, where consumers who desire for a better health can
consume it continuously and not a necessity for consumers to drink them as a must in order
to survive.
SUGGESTION FOR FUTURE IMPROVEMENT
 Hire new ambassador to influence people
- Yakult’s should considering hiring a new ambassador in order to attract more
consumers in the future.
 Increase the production line
- Yakult’s production line currently consist only one line and should have an extra
line in order for them to achieve higher output.
 Vary the amount of bottles per pack
- Yakult’s bottles packaging should be change. In order to attract more consumers,
Yakult have to mix between the two types of Yakult’s product. It will make it more
attractive.
 Increases advantage over competition
- Yakult’s currently leading in the market but they should reconsider in improving
their product to beat their competitors.
 Getting more innovative in launching new product of the same type which may include
the packaging design or information details.
- Yakult’s should get more innovative in launching their new product. As example,
Yakult redesign their packaging to make it more attractive.

CONCLUSION
The Yakult Malaysia is produced from high quality, carefully selected ingredients and is
packaged in a technologically advanced local manufacturing quality, incorporating some of
the latest food processing equipment. The factory maintains the highest quality standards
throughout the process, equivalent to the Yakult manufacturing plants in Japan. Through their
planning, they are able to produce output without backorder, maintain high quality product and
are able to gain one more consumers than competitors.