Zara and Ready Meals Case Study Individual Report Essay

Zara and Ready Meals Case Study Individual Report - Essay Example The problem arose mainly because of centralized stock ordering system, which was being practiced by Strutt. There is a change in the stock ordering and delivery system, which sees the losses tremendously reduced, and a significant improvement in customer satisfaction. Before and after Status of Ready Meals Case The initial system is flawed with extensive variations of the orders demanded. Strutt provided a provision all week long order and a final order the day before the intended deliveries. These two orders varied a lot at times even by over 50% and this resulted in an inconvenience to Ready Meals. There were also penalties associated with lateness of delivering the orders by Ready Meals. The Strutt demand of the food was also very uncertain. Ready Meals could not plan itself on what it would deliver more than a day before. This coupled with the fact that Ready Meals had to make small packaging led to an extended lead-time and this in turn led to creation of wastage. Ready Meals se t up stock buffering mechanisms to counter this effect of fluctuation of orders by Strutt. Buffering mechanisms was used in the supply of the sauces. This helped in mainstreaming the supply; however, the sauces have a life span of only five days and the keeping of excess stock led to wastage losses. Another buffer mechanism used by ready Meals to counter the uncertainty in supplying Strutt with food was the buffering of employee working hours. Employees could work for an extra 2 hours without notice and this led to an increased discontentment in the employee fraternity leading to turnovers. Wastage losses were also contributed to by Ready Meals computer system. On reception of provisional orders, Ready Meal would feed this information into their system. When this information was already in the system and the final order comes along, if the final order was less, the computer could not reduce the provisional order to meet the required order. If the final order was more than the provis ional order, the computer could not requisition for the excess rather it requisitioned for the final order in addition to the provisional order. This led to a great variation on the ordered quantity and the produced order. If Ready Meals also failed to deliver a day’s order, the computer would assume that the order was lost and make another order, which it would compensate for, by a lower order the following day. In the new system, a weekly schedule was set on Fridays with fixed daily deliveries for the following week. This was also found to not need changing from week to week apart from gradual seasonal adjustments. Threat of penalties was also removed and Strutt’s shelf life was increased by RM promising to dispatch on the day of production and supply the early rather than late delivery into the depots. Finally, the depot location was specified on the same day rather than 2 days before delivery, thereby enabling the packaging quantities to be in line with store requi rements and, therefore, avoiding depot delays in trans-shipment. This new system removed the variation in the quantities ordered and those delivered thereby reducing wastage for Ready Meals to zero. The uncertainty, which had earlier been created by the two orders placed by Strutt, was also removed. This is