QUESTION

Case Study

Ace Dairies gives a home delivery service for milk, dairy products and a range of related goods. Roger Smitheram has run the dairy for the past 12 years. His product is a combination of goods (the items he delivers) and services.

At heart of operations is an information system which contains full details of all Roger's 500 customers, including their regular orders, special orders, where to deliver, how they pay, and so on. Every day system calculates the likely sales of all products in two days' time. Roger adds some margin of safety allows for likely variations and passes his order to Unigate Dairy in Totness in Devon .This Unigate depot acts as a wholesaler for milkmen in Wales and southwest of England. The subsequent evening it delivers to a holding depot in Camborne, and then takes Roger's goods 10 km to a cold store in Hayle. At 5.30 the following morning Roger collects the order from his cold store and starts delivering to customers. This usually takes until 1.30 in afternoon, but on Fridays he spends more time collecting money and often finishes after 5.00 pm.

There are a number of specific problems facing Ace Dairies. There is, for instance, some difference in daily demand, so Roger has to carry spare stock. He cannot carry 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 percent of sales. There is also effort maintaining a service during holidays, or when Unigate has difficulties with their deliveries.

Perhaps Roger's major concern is maintaining his sales over long term. Order for doorstep deliveries is declining, as people buy more milk at supermarkets. The number of milkmen in Hayle has declined from 10 in 1987 to 3 in 2002. Most of Roger's customers have been with him for many years, but he generates new custom by canvassing, delivering leaflets, special offers, carrying range of other products, and so on.

Required-

Base on the above case study, answer the following questions:

(a) Explain the supply chain of milk

(b) Where does Ace Dairies fit into this?

(c) What particular activities form the logistics in Ace Dairies?

(d) What are key problems that Ace Dairies has with logistics?