Question

Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.

what might be the best transportation options in this scenario?

Answer 1

The company needs to maintain the promptness in its delivery to maintain the freshness of goods it transports.

There are 3 scenarios -

(a) Transport of regular meat to local market through refrigerated trucks - 65% of market.

(b) Transport of meat to Illinois, Wisconsin and cities west of Mississipi - Specialised fleets using small trucks

(c) Speciality meats - Within Indiana, Illinois, Wisconsin - speciality distributors

peciality meats - Other cities - Transportation via air, local distribution by speciality partners.

The plan indicates that the majority market is within Indiana and nearby areas. Point (a) is OK as it serves its purpose, The point (b) seems to be useless exercise where during peak hours, the company has to use its own trucks to send the shipment to the partners' facilties where it is loaded again on smaller vehicles to reach the target market. This exercise probably involves more time, risk and reduces service level. Instead the company should invest in smaller trucks to reach the good directly to Illinois, Wisconsin and other nearby location. It will enhance service standards ( because company itself will be handling the cargo) and reduce the time and cost ( in reloading and handling of goods in times when peak performance is needed) besides increasing capacity of the company that can also be utilized elsewhere.

Seasonal exercise of sending the speciality material through air needs to be kept the same if it is cost effective.