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Dairy crest presentation

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  • Who Dairy Crest Age formed in 1981 from the Milk Marketing Board (1933).WhatDiary products to supermarkets & distributors / food producers / middle ground customers / householdsFarmer gate to front doorSpreads / Cheese / Milk £10bn marketWhereEngland / WalesFrameworkFocus on the last mile depot to customer houses1m residential customersNetwork 2100 milkmen with 1500 franchisees (page 24)Use the value chain framework to analyse the home deliver operationsStrategic Issues2011: Company revenue £1632m, Diary £1,069m revenue (down 2%) £10.2m profit (down from 27.1m) Margin 1% (down from 2.5%), division generates 66% revenue only 9% profit
  • The Central management uses the depot sales revenue as a measure to plan for stock deliveries and measurement of the depot’s productivity.
  • Track detailed adata over time trackers / gps / time / order qualtiy & value
  • Transcript

    • 1. Bedford’s Last Mile Home Delivery
    • 2. • Home Delivery Farm Gate • Responsive Ordering • Own Brand Convenience & Perishable Goods • Personal Customer ServiceDairy Food Processing Order Winners B2B C Operational Conflict: DairyLast minute Cost Crest: Suppliers ordering of S driven lean D convenience goods, with Depot vrs next day Last Mile Customer: doorstep Q delivery, with a Convenience driven personal touch F flexibility Customer R
    • 3. Plan control KPI1600000140000012000001000000 Budget 800000 Actual Variance 600000 400000 200000 0 Total sales Margin
    • 4. Source Bedford
    • 5. Make
    • 6. Control & KPI• Centralized management• Depot manager and staff in complaint zone
    • 7. Inventory Management• Head office allocation  goods allocated based on depot sales programme(weekly round sales)• Supplementary stock ordered in by the Depot Manager• Pull ordering
    • 8. Ordering pattern• Daily orders: Allied bakeries/ Nuneaton: Dairy Crest products (6 days a week) – 2 days lead time• Weekly orders – External suppliers (Britvic, Coca cola Schweppes)• 1-3 week orders - Durston  gardening products: 3 palletes minimum
    • 9. Arranging orders• Daily orders received from centralized booking system by 9pm• Each order is organised into routes and any further customer request included• Order lists per route are assigned to Drivers: Put on Pegs• Drivers go to stock room with order list: Order is collated and then loaded into fridge
    • 10. Deliver, Customer and Return
    • 11. Arrive at Depot 2235Departs Depot 2315Returns to Depot 0851 9 hr 36Duration of Route min 8 hr 34Productive Time minFrequency of Stops 2.7 minsTotal Route Distance 32 kmNumber of Delivery Stops 230Number of Deliveries 552Average Deliveries perstop 2.4Delivery Stock Value £630.45Delivery Value (mean) £1.14Delivery Value (max) £5.97Delivery Value (min) £0.68Damaged Goods £6 (est)
    • 12. Delivery Takt Time 1Delivery 0 Time (20 / 21 Nov 2012)
    • 13. Issues• Workforce: – Ageing workforce, struggling to attract new staff – Long hours for drivers – Compliance & Adaptive – Relocation / Challenging staff from MK depot• Competition: – Tesco / Abel & Cole – Tesco is cheaper on unit price• Margin: – Historic creditors MK depot closed bedford left to pull debt from their customers – Payment cash / doorstep legacy / new banking rules for drivers
    • 14. Recommendations• Workforce:• Competition: – Canvas traditional customers (Senior citizen functions/locations) – Use tying/ bundling deals to get people paying upfront and tied in for a long period• Margin: – Improve Forecast for inventory to reduce waste. • Data analysis – Discount on a one year order of minimum order (with room to increase order when required) – add slow moving stock to other popular products (could them free when a higher margin product is bought)
    • 15. Questions

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