5. Case analysis (30 points) Read the following case and answer the questions. M

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5. Case analysis (30 points) Read the following case and answer the questions. Meet the retailer taking grocery chain waste back to the masses Retailers are an extremely visible facet of the food waste scandal, but there are all sorts of reasons that products fall out of the grocery supply chain. Edward Perchard spoke to Approved Food founder Dan Cluderay to see how he's turning this would-be waste back into a profit with his online clearance food and drink store When you think of waste in the grocery supply chain, chances are images of the bins outside supermarkets full of ready meals and bunches of bananas will come to mind, or maybe a pile of carrots sitting on a farm, deemed too big, small, thin or fat for the shelves. But what about the stuff that gets lost in the middle? According to WRAP every year by grocery manufacturers. Around 900,000 tonnes of this, food worth approximately £1.2 blion, is deemed avoidable. And though much (51 per cent) is made up of extremely perishable stuff like meat and dairy, 11 per cent, some 185,000 tonnes of waste, comes from ambient products: the kind of thing you canill your cupboards with. It's this waste, created for any number of reasons, that online retailer Approved Food is trying to turn back into edible profit. Launched in 2008, the website receives 20,000 unique visitors a day and last year shipped 9.8 million items of food, alcohol and household products that have slipped through the supply chain cracks from its Sheffield depot across the UK and Europe. Sourced at manufacturers rather than retailers, Approved Food's stock is irregular, a new range every week, with 200 different lines arriving at the depot every day in a range of quantities, depending on what's become available. The retailer's founder, Dan Cluderay, says that as online shopping has completely changed the way people buy food, the internet has also opened up avenues for clawing back produce that would otherwise go to landfill, and getting it to the people that it was made for. "There's been a massive shift in how people buy, what they think is value and what's socially acceptable. It's coming into all walks of life, the manufacturer down to the consumer. Approved Food pitches ts wares squarely at those looking for bargains on groceries, what Cluderay describes as the Money Saving Expert group' (he says the average customer last year saved £77 on every order placed). Much

Explanation / Answer

Main characteristics of grocery supply chain –

Grocery supply chain supplies goods and services in a proper way and proper channel. Proper warehousing and transporting is done in more meaningful way. It manufactures in bulky way and distribute it through proper channel. Grocery deals with all type and kind of products from manufacturing to up to the place of distribution. Online shopping has completely changed due to advanced technologies to the way to buy the foodand basic necessaties products.

1) With the help of supply chain management the flow of raw materials, products and information has become a focal issue in modern manufacturing and service systems.

2)Supply chain management requires effective use of assets and information that has far reaching implications beyond satisfaction of customer demand, flow of goods, services or capital.

3)Aggregate planning is a fundamental decision model in supply chain management which refers to the determination of production, inventory, capacity and labour usage levels in the medium term. Today supply chain management has become one of the most important core functions of companies in manufacturing and service sectors.

4) Supply chain management considers all the stages from raw material procurement to consumption by the end users in fulfilling the demand for a certain product or service. In the simplest terms, whenever there is a demand either for a product or a service and supply to fulfill this demand, a supply chain emerges.

5)The standard aggregate planning problem aims to determine the production levels, inventory kept in the supply chain, hiring and firing employees, overtime production, backorders and demand satisfaction levels with the objective of having the minimum cost or maximum profit.

6)In aggregate planning, the decision maker first estimates aggregate cost components including labour costs, capacity changing costs, production costs, inventory holding costs, stock-out and backlogging costs, and subcontracting costs. The estimation of these costs is not an easy task but can be done through aggregate planning.

7) The decision maker not only reveals information on production, inventory, and capacity levels but also on the required capital, machinery, and warehouse space, sourcing decisions and supplier purchase level, customer service levels, and product pricing by deducing the aggregate plan.

8)Aggregate planning is a fundamental step in the entire supply chain and operations management. There is methodological approach to inGood sustainability considerations in the aggregate planning problem.

9)The standard model is enhanced with realistic considerations including the learning curve of new employees and smoothing limits on the hiring and firing of employees in an organisation. Moreover, the aggregate planning model is revised to in Good environmental and social effects to conduct a triple bottom line accounting analysis of sustainability and the solutions obtained with the model are analyzed to obtain insights. The analysis shows how environmental and social criteria can be appended to traditional cost accounting in order to address sustainability in supply chain and operations management based on the aggregate planning problem.

10) Logistics management forms an integral factor in the success of any manufacturing companies operations and has direct impact on their bottom line. Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. It is simply the management of the movement of goods.

Operationally various checklist have done and rules framed for the approved food.

Network Design: First of all, it is necessary to decide the number and location of facilities needed for Approved food. Proper design of network and infrastructure improves efficiency of supply chain. The facilities in this network are manufacturing plants, materials handling system, distribution system, order processing system, after sale service, etc.

Information:Information is needed to forecast sales and to process customer orders. Sales forecasting helps in inventory management. Correct information is necessary to avoid errors and delays in order possessing.

Transportation: A cost effective and speedy transportation system improves efficiency of value chain.Roadways, railways, airways and waterways are the different modes of transport. Road transport is suitable for carrying goods of medium bulk and weight over short distances and for point to point service. Rail transport is suitable for carrying heavy goods over long distance. Air transport is suitable for carrying light and valuable goods at a fast speed. Water transport is appropriate for carrying bulky goods of low value.

Warehousing :Proper storage of goods is necessary to serve customers efficiently,

– What type of warehouses?

– Where to locate warehouses?

– What size of warehouses?

Procurement: Acquiring raw materials, semi finished items and a finished product is an important part of supply chain. It consists of several activities, e.g., requirement planning, sourcing suppliers, negotiation, order placement, receipt and inspection, quality assurance, handling etc. It provides support to manufacturing and resale operations.

Packaging and Labelling: ‘Packaging’ involves designing and producing appropriate packages for various food products. Effective packaging protects the product, makes product handling convenient and serves as a silent salesman. ‘Labelling’ refers to putting identification marks on packages. A label provides information about the brand, grade, price, manufacturing date, expiry date, etc. It may be a part of the package or may be attached to the product.

Inventory Management: A business firm maintains inventory to fulfill orders of customers. The amount of inventory will depend upon anticipated demand and time involved in replenishment of inventory. Inventory control involves maintaining inventory at the optimum level so that the costs of carrying inventory and ordering costs are minimized without loss of sales. The nature and quantity of various items to be kept in stock are decided so as to minimize investment in inventory and at the same time avoid interruptions in production process and selling.

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