The transportation system has different control tasks. The system has to control costs. The system chooses the collection route and location and the delivery location that will be cheapest yet the company is still able to fulfill its customers. Without the scheduling system, the company officers would manually choose which route to collect from without a thorough analysis of the costs involved in the whole collection and delivery process.
The transportation costs incurred in using the manual system cause the company to incur higher production costs causing the selling prices of the milk to be high. Since the company is not cost-efficient the competitors who have fewer transport costs are able to sell their products at a cheaper price causing the company to lose sales and customers. The other companies are able to use a low-cost strategy in selling their product. The second thing that the transport scheduling system looks at is the demand for the milk. The company should not be out of stock in serving its customers. Customer loyalty and reliability is impaired where the customer needs are not met.
The scheduling system should be input with the demand for the milk that day so that the collection points with that supply of milk is chosen as the current route and collection point. Thirdly, the system should control the supply and match it to the demand. When the company takes excess supply, it will suffer losses due to spoilt milk as the product is perishable. The supply at the chosen collection points should satisfy the current demand. Excess supply will also negatively impact the profits of the business. The company to avoid making total losses by the milk getting spoilt may end up selling the excess milk at throwaway prices.
The scheduling system enables the company to engage in forwarding planning What is the schedule for the day for transportation and collection of the milk? Secondly, the system requires different departments to coordinate well. The sales department has to coordinate with the transport and procurement departments. It involves the integration of the three departmental systems. The departments have to give data that is timely to the operational coordinators of the system.
A database may have to be maintained for all the required information with interfaces for the users in the three departments to query and interrogate the system. The data in the database should have integrity. It should be the current costs and demand schedules. A change in the costs of transport should be input into the system as soon as possible. This is to help the company to avoid incurring extra costs by choosing the wrong route based on obsolete information.
A change in the demand quotas by the customers should also be input immediately into the system. This means the company needs to have elaborate management of information systems. There should be no data bottlenecks or bureaucracy that will hinder the transport system from optimum utilization. Staff may have to be trained on the importance of quick communication and coordination. This is a sensitive industry where the company is dealing with perishable products.
A break in the chain of communication may lead to high losses in spoilt milk. The coordination of the system will be centralized for better control. The staff at the centralized location will then have links to the various staff in the different departments. There should be a way to communicate with the drivers of the vehicles on any changes in the demand or supply quotas. The system will enable the staff to re-route the vehicles even during the day when there is a change in information. The management and staff will need to interact a lot with the system.
In summary, the transportation system controls the costs, demand, and supply of milk. The system should give the management and assurance that all is being handled well. Where they are mishaps, the company management should meet to look at the way forward. It is about fulfilling customer needs and wants. It is also about providing quality services as this will strengthen the company’s market position in the industry. Finally, the company should have reliable suppliers.
The system will enable the company to monitor its supplier’s trend in delivering quality service. Strategic decisions can then be made based on the information retrieved. The system will also assist the company monitor its customer’s demand trend for milk and find out any causes in decline. Is it customer dissatisfaction or a change in customer preference? Armed with this knowledge, the company now works towards improving better services and meeting customer needs.
How flexible is the company to the customer demands? How does the transport system assist in giving the company a higher flexibility allowance in milk delivery? The computerized system is important in giving the company a sustainable competitive edge.