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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

Dairy crest presentation Dairy crest presentation Presentation Transcript

  • Bedford’s Last Mile Home Delivery
  • Strategy / Farm Gate Framing Operational • Home Delivery • Responsive Ordering Conflict: • Own Brand Dairy Crest: Convenience & Perishable Goods Cost driven • Personal lean Customer Service vsDairy Food Processing Customer: Order Winners Convenience B2B driven flexibility C Last minute Suppliers S ordering of D convenience Depot goods, with next day doorstep Last Mile delivery, with a Q personal touch F Customer R
  • Plan control KPI1600000140000012000001000000 Budget 800000 Actual 600000 Variance 400000 200000 0 Total sales Margin
  • Source Bedford
  • Make
  • Milk & More
  • Control & KPI • Centralized management • Depot manager and staff in complaint zone
  • 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
  • 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
  • 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
  • Deliver, Customer and Return
  • Delivery Route Arrive at Depot Departs Depot 2235 2315 Returns to Depot 0851 9 hr 36 Duration of Route min 8 hr 34 Productive Time min Frequency of Stops 2.7 mins Total Route Distance 32 km Number of Delivery Stops 230 Number of Deliveries 552 Average Deliveries per stop 2.4 Delivery Stock Value £630.45 Delivery Value (mean) £1.14 Delivery Value (max) £5.97 Delivery Value (min) £0.68 Damaged Goods £6 (est)
  • Delivery Takt time Delivery Takt Time 1Delivery 0 Time (20 / 21 Nov 2012)
  • 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
  • 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)
  • Questions