Below is the text from an email I received in the 90-ies (as a copy). What Chandrashekhar explains is still valid. Anyway, I thought I would post this after I found the email again by accident - especially in relation to my last post "Isn't It Obvious (part of the Learning from Experience series.)

CHICKENS

Hi Luis This is Chandrashekhar from India.

From the inputs what you have provided, ToC’s distribution / replenishment solution is the best solution. To design the solution completely you need to have past data.  I have implemented replenishment solution in the distribution of a Chicken (Shelf life of 24 hrs only).

The case was:

• The supplier had one factory from where he was supplying to more than 200 outlets in the city. All outlets were giving their next day’s requirement by afternoon 3.00 • Live birds then transported to factory by 10.00 in night.• Factory used to start the production late night and complete it by morning 6.00. the finished product was delivered to all outlets in the morning by 10.00• If a shop sells less than what he has ordered, the extra chicken is wasted.• If a shop sells more than he ordered, there is stock out and sale is lost.  17% of the rejections were taking place due to this. Sale lost – no data available

Solution:

• Instead of one delivery, now we are making two deliveries, one in morning, second in evening. • In first delivery (Morning 10.00) we supply 40% of the forecast or ordered quantity by the retailer.• At 3.00 they call up all retailers and take sale figures.
• If sale is less than forecasted, then quantity in second delivery is reduced • If sale is more than forecasted, extra quantity is supplied in second delivery.

This reduced the rejection (chicken coming back from retailers) from 17% to 6%. On one side the rejections came down, i.e. the loss of throughput is arrested on other side the sale improved by 11% i.e. Throughput increased. I hope this example will help you in developing solution for your problem.

 

 

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