SCM , Team I

Case Study: Sausages Made To Order?

About the Company

Bradley Smallgoods

A meat-processing company in Melbourne, Australia.

Formed in 1947, a subsidiary of a large food-processing company.

Annual turnover of Aus$110 million from sales of 14,000 tonnes of product.

Sell to national markets (predominantly made in the state of Victoria) and some exports.

Has been making fresh sausages from meat trimmings, grain and seasonings filled into a
casing for almost 50 years. Originally made only pork sausages and they were primarily sold
through corner shops and delicatessens. Customers of the deli counter in a supermarket want
a variety of sausages such as bratwurst, pork, honey and soy, beef and tomato, and chicken.

Bradleys processes in brief:

Bradley purchases boned pig meats,

processes them into a range of cured, preserved and fresh meat products known as
smallgoods,

sells the sausages to 3 market segments: supermarkets (60%), delicatessen shops (20%) and
other food manufacturers (20%).

Bradleys Manufacturing process:

Bradleys typical schedule for its sausage production:

Scheduled production of sausage produce to stock (tonnes)

SCM , Team I

Bradleys Supply Chain

The integrated supply chain diagram

Materials flow:

Information flow:

Bradley purchases the pigs from a piggery in

northern Victoria, which then are slaughtered and

a week. It estimates its requirements a month in

dressed at an abattoir adjacent to it.

advance but without any commitment.

The carcasses are delivered to Apollo Meats,

Bradley has a weekly requirement that Apollo

processes a number of carcasses for delivery

meat is then refrigerated and delivered to Bradley

every 2 working days. This number is changed

twice a week.

without notice when Bradley so wishes, on the

Bradley distributes its sausages from its chilled

Friday before a working week.

Production scheduling is carried out at Bradley

Delivery for Safeway Supermarket, its major

using a stand-alone spreadsheet. The scheduler

customer, is to Safeways cold store by using

uses this sheet to plan production 4 weeks

pans (pantechnicons) pulled by a prime mover.

ahead, but there are daily changes to the

Bradley hires a transport company to deliver

schedule as customers exact needs are obtained.

these pans to Safeways Distribution Center in a

where Apollo will bone and trim the meat. This

store at the end of the production line.

Safeway places orders for sausage varieties twice

The only computer information Bradley has on

narrow time slot.

the stocks of sausages is the financial value of

Safeway is the largest supermarket chain in

the pallet loads in its despatch store. To find out

Australia, with 150 stores in Victoria. Its

stocks of individual varieties, sales staff have to

customers buy sausages to keep in the freezer

ask the store person.

until needed. The majority buy sausages for a

particular occasion, such as a barbeque.

Safeway has detailed information about its

sausage stocks at its cold store but does not
share this with Bradley. Delivery information is
compiled from the loads assembled in despatch.

SCM , Team I

The Personnel

Bradley Smallgoods

Safeway Supermarket

Paul Liddy, Operations Manager

Gwen Davies, Senior Buyer

Mikhail, Production Supervisor

Rachel, Order Clerk

Chris, Production Scheduler

Apollo Meats

General Manager

Brian, Manager

Shift Supervisors

Zoltan, Boning Supervisor

The Case
Background:

Paul want to try to improve the process since Bradleys profit is too low. The long-term objective
is to streamline operations so that customer service levels will increase and costs will be
reduced, so he introduces the concept of changing the sausages production to Make-to-Order
and Just-in-Time approach.

Paul arranges meeting with Brian from Apollo, and Gwen from Safeway to discuss his
improvement project. Pauls statement: I want to move from making sausages in large batches
in advance, to making exactly the varieties and quantities you want when you order them.

Result from the first meeting:

Gwens comments:
That sounds like a good proposition. We

would get fresher sausage, provided you

can react quickly to our afternoon order.

Brians comments:
My boning room is not set up to deliver
meat exactly when you want it.

I only operate one crew of butchers, so I

We could not tolerate any drop in delivery

need to arrange my production schedule a

performance. Already we have seen 8% of

week in advance

deliveries miss the required time this year.

Paul and the rest conduct their study and propose below changes:

the increased frequency of Safeway ordering,

the increased number of sausage batches, and

the extra shifts needed at Apollo.

SCM , Team I

The study findings, showing the current situation and the expected changes:

Reactions to the Proposal:

Bradley

Safeway

The GM is entirely in favors of

Gwen accepts the main

Apollo

Brian is quite negative about

the change.

results of the study, and

his ability to bone some

However, Bradleys shift

agrees that orders could be

carcasses for Bradley during

supervisors were not

placed every 4 hours during

every shift.

convinced, as they could see

the working day.

problems in changing over,

Zoltan pointed out that

Expected benefits: getting

traceability and cleanliness

which they didnt want to do

fresher sausage and fewer

would be compromised by

during the Easter period, in 2

delivery failures.

changing from boning for a

However, she cannot predict

food service company to

the size of individual orders.

Bradley products during every

Her biggest problem will be to

operating shift. He would

argue that a lot of their work

get her superior and store

have to stop the entire

is related to the batch of

managers to accept Pauls

operation for 15 minutes, and

sausages made. So, more

proposals.

he could face an industrial

weeks time.

They could not envisage the

real savings in their area, and

batches equal more work.

dispute from the boners.

Pauls Dilemma: to go or not to go?

Should he go ahead with his proposal to make sausages to order?

What are important factors to consider, in order for him to implement the change successfully?

Please come to our presentation for the answers on Wednesday, 14th October 2015.
See you there!!
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