West Indian Tobacco Company Supply Chain Management

I. Introduction

Heizer defines Supply Chain Management as “the management of activities that procure materials and services, transform them into intermediate goods and final products and delivers them through a distribution system” (Heizer, 452). In a heavily competitive market such as the tobacco industry, the supply chain management must be constantly regulated in order to keep up with the growing demand for agricultural products and increasing competition. Since the tobacco industry heavily relies on agriculture, in particular, the long term security of the tobacco leaf, companies must secure a supply chain strategy that relies on specific processes, systems, metrics and organizational capabilities that help the company gain a strategic advantage in the market.

II. West Indian Tobacco Companies Supply Chain Management Strategy

The West Indian Tobacco Company’s supply chain strategy is based on a backwards vertical integration strategy. By implementing this strategy, the West Indian Tobacco Company has increased control of its suppliers, tobacco farmers, and can therefore maintain control over the security and quality of the tobacco leaf supply that is received. Integrating a backwards vertical integration strategy into their supply chain, gives WITCO a strategic curb on in the tobacco market. With increased control of its suppliers, WITCO has the advantage of timely delivery of supplies, cost reductions, inventory reduction, and greater flexibility. Additionally, to ensure that suppliers improve their management of social and environmental risks, WITCO implemented the Social Responsibility in Tobacco Production (SRTP) guide.

III. Components of Supply Chain

Tobacco Farmer: supplies tobacco leaf to the West Indian Tobacco Company

Leaf Manager:

-provides agronomy support to all directly contracted tobacco farmers

-Ensures best practice labor and safety standards are adhered to through the appropriate use of agrochemicals

-provides guidance to...