Study case of supply chain and logistics management

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Case Study No. 1

M.O.I Foods Limited is engaged in the manufacturing of various types of fast food

items that are ready-to-eat variety. It has been in the business for the past 12 years. It has its factory as well as the processing unit in Birmingham. The raw materials required are mainly vegetables, chicken which the company procures from either the local vendors, or from various suppliers situated at London, Manchester and Newcastle. The required materials are procured with the help of hired transporters. The company is using 5 carriers to deliver the raw material to the plant and the total damages for the goods due to transportation is 20% lost due to damage, deterioration, pilferage, etc. The company increased the numbers of carriers to ensure the availability of trucks, however the company is losing 10% of the plant capacity due to material run out. The company’s products are quite popular with the customers who are situated in middlesbrough, Glasgow and hartlepool. However, the company stands to lose the market due to erratic supply schedules which do not cater promptly to the customers. The packaging of the products is attractive and its the most distinguishable package on shelf, however there is high return from customers due to short shelf time, which is the shortest among other competitors. The shelf-life is only about 5 hours, if the goods are not properly refrigerated. Loss on this account is about 10%. The company has about 10 distribution centers. But there does not seem to be the much coordination between these centers. Logistical information system is not adequate. Due to this, the company is unable to expand its business. In fact, due to competition, there is fear that the company may stand to lose its existing clientele. Due to mismanagement, the company is unable to meet increase in the demands during December season which represent the highest demand during the year.

You are appointed as a logistics consultant. You are required to put forward your

suggestions with regard to:

1. Setting-up of proper, effective logistical information system to improve coordination [Note: Discuss about Logistics as an integrated process, ensuring proper planning]

2. Effective forecasting system to reduce inventory carrying cost, wastages, damages, pilferages [ Note: Forecasting can be in terms of door-to-door surveys, questionnaires, telephonic interviews. For markets/stores that are close-by, think of JIT strategies]

3. Setting-up of effective purchasing and distribution system [Note: Quality control with regard to purchases is required. Prefer those suppliers who can supply goods in their own transport]

4. Improved system of storage, handling and packaging [Note: Study warehousing, material handling system and packaging. Write/discus relevant points relating to the question.]

5. Alternative modes of transport to reduce/eliminate wastages [Note: Study has to be made regarding capital investment in having own fleet of specialized trucks and related variable costs versus hiring specialized fleet of trucks. In case of hired trucks, agreement should be made with regard to compensation to be paid

by the transport company in case goods are damaged/pilfered by them]