CASE ANALYSIS

Case Analysis

Urgent

Case Analyses

National Brewery

Forecasting and managing demand for customers requires a strategic, holistic view of the supply chain involved in delivering customer service expectations. The effective execution of these detailed plans can ensure achievement of customer service goals with the use of management feedback information on an operation's performance against pre-determined plans. The demand management activity provides signals to the three pubs (White Lion, Oak, and Castle) for revising plans and associated corrective actions to maintain supply to the specified customer's requirements (Johnson, Clark, 2008, 102).

This approach necessitates detailed attention to stock control of beverages throughout the supply chain to maximise high levels of customer service. There is an ever-increasing range of products on offer to the consumer from real ales with a short shelf life to keg and bottled beers, wines and spirits with longer shelf life. But there is a trade-off between stock holding and customer service that is central to an effective operation and is particularly relevant to the three pubs (White Lion, Oak Pub, Castle). Poor demand management will inevitably lead to high residual stock, reduced cash flow and costly discounting to move slow moving products. Appropriate stock holding will offer customers consistent availability of a wide range of products to meet their fickle requirements. This ability to be able to plan and co-ordinate all those activities necessary to achieve desired levels of delivered service and quality at the lowest possible cost is fundamental to managing an operation effectively for three pubs (White Lion, Oak Pub, Castle) (Johnson, Clark, 2008, 103).

Traditionally, the breweries owned most of the public houses, and either installed managers, who were simply employees of the breweries, or allowed the public houses to be run by tenants or leaseholders. Ownership was retained by the breweries, which charged rent for the use of their property, and controlled the types of stock that could be sold. Indeed, the breweries themselves often supplied the stock, but the tenants and leaseholders retained the profits. There are also free houses, which are owned outright by the individual licensees.

Currently, about 35 per cent of the public houses in the UK are free houses, but some are owned by chains that are unaffiliated to the brewers, so it does not mean that all are small businesses. Lease and tenant holders run 42 per cent of pubs and the remainder are managed houses owned by breweries and corporate chains.

The three pubs (White Lion, Oak Pub, Castle) are part of a major business enterprise, and so their financial controls have been devised to effect economies of scale. Managers may find that their tills are directly connected to head office, so that the sales of particular products are monitored. Alternatively, they have to make regular and detailed reports on the sales of each product, so that head office is able to monitor trends, on gross profit for example and affect the appropriate delivery of stock. Tenants, leaseholders and free traders have no similar level of direct support from a brewery ...