The Logistics Strategy For Brewery Industry Commerce Essay

The Logistics Strategy For Brewery perseverance Commerce EssayT here(predicate)(predicate) was a survey on distri b belyion costs by institute of Logistics and Distribution attention in 1992. In this survey, it was plattered that 50% of the distribution costs ar occurred in pabulum and tobacco manufacturing and at that placefore a c atomic number 18ful cooking is necessary to make these costs (Institute of Logistics and Distribution forethought, 1991/92). These costs sub grammatical construction be controlled by impressive logistics perplexity and logistics scheme.As far as brewery indus pass judgment is concerned, a stool of distribution costs be incurred in transportation and logistics and to be a viable concern the brewery intentness necessitate to down a loaded logistics outline to outdo this job. In our wrangleion, we testament try to discuss the basic routing problems and vehicle schedule and then we pull up stakes try to endeavor a strong logi stics strategy to overcome this problem. Brewery effort in UK is no much a piece of cake now. The merchandise is now perfect(a) and to be a successful food marketplace mavener a brewery familiarity fills to bring down its costs.The basic routing problem which a brewery industry faces is Selecting the best way or route obtainable to bestow goods to the terminal consumers. The basic programming problem is Selecting the best time available to go by target clients. These problems are incurred whenever in that location are in that respect is a complexness in the marketing channel arrangement of an organization. The much than complex the brass, the more complicated the routing and scheduling problems in the logistics get byment. In our discussion below, we entrust try to review the strategies followed by a brewery industry and give make an get to recommend a valid logistics strategy in the context of UK Market. epitome of a UK ground brewerys current strategic al position from a logistics lieu and Critical assessment of available opportunities to develop existing logistics capabilities.An Example of economical and tender castling plcScottish and New stronghold plc is one of the largest UK based brewery groups. This group enjoys a strong financial back plus a pie of giant sales in the UK. The comp each has well defined market logistics bodys and female genitalia substantially work a competitive edge due to its systematic and professional operations. The Companys main operational parameters areFirst the tell aparts from the clients are collected on a telesales system which is a uniform computerized. Then tack togethers are manually punched to the companys main database and provided screening is done over there such as credit limits and stocks available.Emergency orders are scarcely evaluate after estimating the order lead time for founder node service.They practice session heavy goods vehicles to deepen the bulk of good s at a time. This approach leads to trim costs and as well as luck cost of time.In caseful of client claims a puritanical back hauling strategy is there to overcome the problem of customer churns and lower costs.The drivers and break off crew members are salaried priggishly which are involved in the distribution process.Despite of such a well managed system, there are any(prenominal) problems which motivation to be reviewed and addressed strategically.More Order to payment cycleCustomer retirementThe streets in UK are mostly one way.There are original government regulations in scathe of weight limits.Inappropriate size of order shipments is thereThe lack for a better computerized and engineering management system.Drivers are strict to work for 9 hours despite the fact that it is a broken job. (Peter G. Eibl, Roddy Mackenzie, David B. Kidner, 1994)We can review these problems are opportunities which needs to address for a strong and loyal customer base. It is classi c to note here that melody needs to management on the customer and should imbibe a broad interpretation of market for a strong and loyal customer base. The main threats to line problem and a source of missed market opportunities is the weak focus on the customer and competition. It is a habit of the market attracters to be strong and have a strong focus on market. These market leaders do not only focus on full-blooded current consumer needs but also to see the needs of customers which no one is addressing. As a reason, they enjoy a buy the farm profits and strong and loyal customer base (Roger J Best, 2008). Keeping the preceding(prenominal) views in mind, we can collapse as a beer manufacturing company, we need to discerp the untapped deal out of the market and should need to implement such a logistics strategy to overcome over problem.It is all important(predicate) to note that this company has an populate of computerized vehicle routing and scheduling system. At be ginning the company planned to function the computerized system in 1970, but due to less development in engineering science and some some other constraints it was difficult to achieve this objective. An initial system was developed but it was difficult for the company to meet the demands of the customer appropriately and the cost of technology dropped in the British Market. This also led to the opportunity Technological Advancement. The Scottish and New move successfully gained profit from this opportunity, choose a computerized logistics management system and it is the secret of its success to twenty-four hours in the UK Market (Peter G. Eibl, Roddy Mackenzie, David B. Kidner, 1994). Despite all the in a higher place conditions, the company enjoys a sound competitive and strategic position in the market and now we allow for see that how can we maximize these opportunities to overcome the problem.Since now we are talking about the scenario of 1991, the challenges which a brewery company faces in UK environment are virtually the same today for example they need to improve their logistics for better customer service and in this sense there is an opportunity for a create from raw stuff company to address this customer need to through fit routing and scheduling for customer convenience. accord to the latest trends in brewery industryThere is more growth than beforeCompetitive TurbulenceGrowth of Local companies competing the giants additional Capacity and straight-laced logistics and inventory management are the drivers of success and market leadershipEconomic Conditions have hit the beer marketThere is a new trend of mergers and acquisitions. (Society of Independent Brewers, Local Brewing industriousness Report, 2009)If we analyze the Scottish and New Castle plc with respect to above trends in brewery industry then it is easy to find that we need an effective logistics management system to control over costs. We need to fully implement the Systems Concept and nitty-gritty Costs Concept for designing a successful logistics strategy. All the above problems are actually opportunities available in the market.Evaluation of the key strategic approaches to logistics management that could be used by a UK based brewery strategical and Rational Logistics Planning for Scottish and New Castle plcIn the case of Scottish and New Castle plc, a lot of strategic planning and tactical approaches could be used for designing and strong logistics strategy. A straitlaced an appropriate route planning mustiness be done. In terms of bulkyer routes some special incentives must be given to the drivers and the mental faculty involved in logistics and operations. Unnecessary routes must be avoided to overcome this problem be driving the reason for that is they volition cause costs higher. victimization contrary vehicles to transfer goods to customers also incurs unnecessary costs. Using proper vehicles to deliver goods at the receiving facilities of consumers is a good approach to control the costs.It is also important to note here that all of our methodologies circle around costs. Only those logistics strategy volition be successful which giveReduce CostsProvide Customer toilet facilityInventory ManagementIntegrated Order Processing.We will try to incarnation a logistics management strategy in the following scenariosFulfillment ManagementFirst of all we need to plan about how to effectively deliver goods to the final consumers. Then we can decide about the best available options such as trucks or small vans to deliver goods to final consumers. As far as UK is less short of two way roadstead and most of the roads are one way. Therefore we could use large trucks to deliver goods and services to final consumers.Secondly, It is important to analyze that would these transportation strengths will save us money or not. Extra shipments and lower order sizes of Scottish and New Castle plc will automatically cause plain ship ment to consumers. There should be a proper documentation and record maintaining of transportation and distribution for future referencing and monitoring logistics costs.A proper warehousing system must be developed to ensure proper logistics management. For example, the warehouses must be located at a place weedy the marketing channels for quick transportation and costs. Small order sizes and remaining orders can ruin the distribution costs. A proper packaging technique must be used to store beer bottles for proper utilization of quad and proper distribution of goods.Supply Chain ManagementProper customer service and inventory planning must be done in beer industry because the market is now at its maturity with more competitors and educate customers. many Master Production plans must be done for logistics management. Beer Industry in UK contains both price conscious and quality conscious customers and so proper market segmentation and positioning is required by this brewery company. about of the products fail in market because of their supply. An opportunity for Scottish and New Castle is to make their products widely available for strong consumer response. Effective reverse logistics system can be developed for better customer service.Demand ManagementIn order to effectively distribute goods to final consumers a proper demand forecasting must be done for cost effective deli actually measures and options. Some time larger and excessive production leads to pointless costs and are an additional burden over the company. On the other emplacement an underproduction also leads to lose of customers. The consumers find value only in that product which is available easily. We can take help for demand management from our channel intermediaries as well. Channel Intermediaries for Scottish and New Castle plc can provide useful insights about the demand and tastes of consumers. In short we need a consumer point view while deciding about the routes and agendum for distribution of goods and services. In beer industry at UK, we can perform some research and development to reach the end consumers for a loyal customer base. We can redefine our routes by doing some research on what consumers motive?(The Above Model was derived from E is for Excellence Leadership in Logistics By Heather Cartwright, PMP, P.Log. as published in LQ Magazine Spring 2004) engineering science as a source of Advantage for Scottish and New Castle plcAs we discussed above that the company has already an experience in technology and technology by the company. It is an era of technology. The company had an experience of collecting orders through telesales and then manually entering the orders in a database. This is an era of technology. For proper order to payment cycle, one recommendation we would like to discuss here is that Scottish and New Castle has not yet developed an online system through internet on which the customers can place their orders. This strategy will help us to attract more and more customers and may emphatically decrease order to payment cycle which is one of the costly areas of logistics management. roughly of the beer customers today are youngsters and these youngsters use internet more than the people of other ages. Useful insights about the industry from consumer point of view can also be gained by collecting feedbacks from customers.Consumers today love to buy online because they are now more advance(a) and require more information. An online website works as a sales man. We do not need to hire separate professionals. Coming online will automatically a source of competitive advantage for the Scottish and New Castle plc because no one is addressing consumers through this medium of distribution in UK.Identifying the management issues caused by implementing a new logistics strategy with consideration for available expectant, technical and human resourcesAvailable CapitalThe first problem that will arise from adopting thi s strategy is that we need to spend a lot in measuring consumer preferences and perceptions about logistics. This thing can cause problems of costing in the short run. For example, redesigning vehicle routes and scheduling is a rattling daunting task and we need to change our structure fully if we compulsion to implement this strategy. More over we will need to purchase some new technological solutions if we want to do effective and computerized scheduling and routing of goods. gainful drivers more incentives will lead to higher costs and is an particular(a) burden on the firm costs.The management will need to change the allocated knock costs and new planning with a new allocation of capital overheads will create obstacles for the management to adopt this policy. But if we see the other side of the road then this addition is capital required will lead us profitability in the beer market. For example, by analyzing consumer tastes and preferences will lead to proper scheduling an d routing of goods. Customer will be satisfied and it will help the Scottish and New Castle to capture more and more market share.TechnicalWe require more and more technical professionals in beer industry to operate the latest technological equipment for our professionals. While selecting technology it is important to note that technology must be compatible with the organizational structure and culture otherwise it would become a threat. Moreover while selecting technology, it is important to note that we need it should be sustainable for example it is difficult for the competitors to imitate it. Technology is always costly. Apparently from management perspective, it seems that by adopting the new technology will lead us to higher costs rather the control of costs and quality in beer industry.But if we see the other side of picture then we can analyze that using technology will easily help to gain higher profits and better logistics management. For example, by hiring technological professionals will increase the management skills and expertise for Scottish and New Castle plc. We already had an experience in technology since 1970, as we have seen above we can experience and use technology in different dimensions. Moreover, there is no compatibility issue of adopting the computerized technology for logistics management as we are already using a telesales system to record customer orders. Some new techniques like RFID or Electronic Data interchange must be used in technology which can easily enable us to track where a product is at this time in the marketing channel. Going online has tremendous advantages. We can be successful because there is a dramatic increase in online shoppers. No one is religious service customers online. Going online will reduce the order to payment cycle with better customer service. It will also save us money for hiring extra professionals for customer dealing and service.Human ResourcesManagement concerns about the change in strategy would be they need to hire more and more professionals to manage their operations. For example for redesigning logistics strategy we need to hire a professional leader for research and development. Moreover, paying the logistics staff more benefits will lead to again more costs. Therefore, what is the benefit for adopting a new logistics strategy?But on the other side of river, we will earn revenues in a long run. For example, a logistics strategy will produce more and more customers and just now our revenues will increase. Therefore by hiring more and more professionals such as drivers, computer professionals will lead to more profitability and these costs were covering up in a very small time. Human Resources are the most important assets of any organization. By paying them more incentives will lead to more employee motivation and loyalty. Motivated employees are more priceless than golden nuggets for any organization. This motivated staff can be further trained to use the bes t available route and proper scheduling for reaching our logistics goals. Employees interact with our customers. Therefore by facilitating logistics employees will lead to very fruitful results in the future.Outlining the strategic significance of new technology developments and business trends on future logistic strategies for a beer manufacturerAdapting new technology will open new dimensions for logistics management for a beer manufacturer like Scottish and New Castle plc. Some of them are discussed belowUsing a computer or professional software and database of vehicle routing and scheduling will open new dimensions for logistics management. We will have a lot of savings than we are saving manually. For example by using RFID or EDI may it is costly for a beer manufacture to manage operations but we will have better inventory tracking and logistics managementAccording to the recent trends in the market. Almost all the companies are now on web for reaching target customers. Moreove r the number of online shoppers is increasing day by day. No one in the beer industry is serving the market online in UK. I think it is an untapped portion of the market and this portion can be tapped by going online. Selling goods to customer online will not only lower the costs of distribution but also but also reduce order to payment cycle. It is easy for customers to bring in information from the web.Now the consumption patterns of the consumers have changed. Now the consumer is more sophisticated and more aware of its needs. In the past, there was trend the man realise and woman played the role of house keeper. But now there is blurring gender roles as the number of working women are increasing. Moreover there is poverty of time for consumers. In this case, while defining a logistics strategy, we should keep these things in our mind. (Management Review Market and Strategy, 2009)Now due to competitive turbulence, we need to have a first mover advantage. People buy only those products which are most readily available and which they do not need to search for. In beer market, it would be really a strong strategy to gain a first movers advantage. This first movers advantage can be achieved by proper logistics strategy and inventory management.ConclusionIn our discussion, we have taken our point of discussion as Scottish and New Castle Inc as our point of discussion and as an example of how to adopt a successful logistics strategy in the beer market of UK. We have seen that there are a lot of opportunities available such as technology for develop and establishing a competitive advantage in the market. All these are wide-eyed measures but these simple measures can do a lot for us. For example, it can provide us better cost savings and better customer base. It can also provide us convenience in operations. Beer Industry is a food industry and according to research above that there are a lot of expenses in the logistics of food rather than any other product. Keeping the above strategy in mind, we can easily improve our logistics operations in the beer industry. But we also need to implement the continuous process improvement.