Reference no: EM132495987

Case - ACE DAIRIES

INTRODUCTION - Roger Smitheram has run Ace Dairies for 16 years, providing a home delivery service for milk, dairy products and related goods. His product is a combination of goods (the items he delivers) and services (the delivery and associated jobs he does for customers).

At the heart of operations is an information system that contains details of Roger's 500 customers, including their regular orders, special orders, where to deliver, how they pay, and so on. Each day the system calculates the likely sales of all products for the following days. Roger adds some margin of safety, allows for known events (such as local fairs or holidays) and passes his order to Unigate Dairy in Totnes, Devon.

The Unigate dairy is 150 km away and acts as a wholesaler for local dairies and milkmen in Wales and the southwest of England. On the evening after it receives Ace's order, the dairy delivers it to a holding depot in Camborne. Later it moves the order a further 10 km to a cold store in Hayle. At 05:30 the following morning Roger collects his order from the cold store and starts delivering to customers. This normally takes until 13:30 in the afternoon, but on Fridays he spends more time collecting money and often finishes after 17:00.

There are several specific problems facing Ace Dairies. For example, there is some variation in daily demand - particularly during holiday periods - so Roger has to carry spare stock. He cannot hold too much, as dairy products have a short life and anything not delivered quickly is thrown away. Roger aims at keeping this waste down to 2% of sales. There are also problems maintaining a service during holidays, when traffic congestion causes delays, and when Unigate has difficulties with their deliveries. However, Roger's main concern is maintaining his sales over the long term.

Demand for doorstep deliveries is steadily declining as people buy more milk at supermarkets. The number of milkmen in Hayle has declined from ten in 1987 to two in 2008. Most of Roger's customers have been with him for many years, but he generates new custom by

Questions -

QUESTION 1 - Describe Ace Dairies supply chain for milk and explain the process.

QUESTION 2 - What specific activities form the logistics in Ace Dairies?

QUESTION 3 - What are the main problems that Ace Dairies has with logistics?

QUESTION 4 - Which mode of transport would you recommend Ace Dairies to use to deliver their dairy products? Explain your reasons.