Golden Dairy Farms (GDF)

Case study scenario

Business History
Golden Dairy Farms Pty. Ltd. (UMC) was founded in 1961 in Berwick, Victoria by Mr.
Geoff Frost, a former East Gippsland farmer. From humble beginnings as a milk
processor for the local dairy farmers, the company has grown into a multi-million
dollar mixed-product firm with a strong penetration into the local market, and a
developing export business. The company’s products consist of a large range of milk
products (e.g. whole milk, reduced fat milk, skinny milk, flavoured milk etc.) and a range
of specialised milk products including, A2 milk, UHT milk, Lactose free milk, and Organic
milk.
Every morning, a fleet of stainless steel UMC tanker trucks leaves the factory to collect
50,000 litres of whole milk from selected dairy farms in the area. When the tankers
return the milk is pasteurised and homogenised after which it is either packaged or
subject to further processing to become skinny milk, flavoured milk, A2 milk, and
other products. A second fleet of refrigerated delivery trucks then transports the
finished products to the company’s major distributors.

1|Page
Current Business Challenges
To remain competitive in this sector, the new general manager and the other decision-
makers of the company are wanting a system that can respond more effectively to the
complexities of the changing market place. But due to its reluctance to innovate in
previous years, much of the business remains without any data network connectivity
and relies on individual standalone systems that do not share data with other
departments. Because of this, the majority of exchanges between departments occur
over the phone or informally via email, with the formal paper work following the
request 1 or 2 days later.
With the urban development of new housing estates expanding further out into the
outer fringes of the metropolitan area, GDF was fortunately placed to serve some of
these new estates.
Once such estate is Serenity Meadows estate which has been growing steadily since
2015. This estate is currently not served by any major supermarket chain yet, but it does
have four (4) convenience stores that provide the area with general daily necessities
(milk, bread and some other products). Three (3) out of the four (4) stores also provide
fuel.

2|Page
Overview of the local stores:

Coles Express: A combination of a cut down version of the major supermarket with
a service station. Coles Petrol offers a very good level of choice and price options for
most of its grocery options, they also offer recharging options for most mobile and
internet plans. Due to its location (positioned on the main junction point between
the estate entry and the freeway to the city) the Coles Petrol is very popular with car
commuters and trades people. Trading hours 6am-10pm.

BP: This BP service station is seen by the locals as mainly a fuelling point. The level of
choice of grocery products is very limited and prices over inflated. While positioned
across the road from the Coles Express facility, its main point of difference is that it’s
open 24hrs and has a carwash facility. This makes the BP popular with shift workers
and weekend car washers.

7 Eleven: The 7 Eleven store is also a combination of limit grocery products and fuelling
station. The main point of difference is that 7 Eleven offers a greater level of choice in its
heated snack food and treats range. The location of the store is more convenient for
train commuters than car commuters. It is also popular with trades people as well as

3|Page
train commuters due to its breakfast and lunch options. Its trading hours are between
6am–midnight.

Uncle Bob’s Milk bar: Uncle Bob’s Milk bar has been serving the local community for
long time. It is not positioned on a major road or highway or is it near the train station,
but it is positioned within the major grouping of housing and within a short walk from
the local high school and primary school. It also offers a limited range of grocery items
and some heated snack foods and treats. While having the shortest trading hours of all
the other local stores (7am-9pm), it does have a good level of casual clientele from
nearby local schools. Uncle Bob’s Milkbar does not have a vehicle fuelling option.

4|Page
Current Processes

Currently these businesses phone order their milk products from GDF directly, the GDF
Ordering Department would then send a junior staff member to check (visually) the
availability of stock within their refrigerated storeroom. This is then relayed back to the
senior ordering clerk, the ordering clerk would then contact the dispatch officer to check
whether there are any trucks available to deliver the order. The dispatch officer will also
need to check that other orders within the area are also ready as the trucks needs to
have a minimum order or 10 crates of product to make the delivery of the order viable.
If the total orders were under 10 crates, the dispatch clerk would then source an
external delivery company to fulfil this delivery commitment.
In case of any quality complaints from the clients, the dispatch officer would also make
a personal note of the expiry date of the products as well as the dispatch date and time.
All other complaints are to be completed on a designated form and mailed back to the
ordering dept.
Upon delivery at the stores the delivery truck would unload the required stock in a
designated area and be expected to leave within 10mins. The delivery truck driver
would also need to confirm the correct delivery of the stock by attaining a signature
from a client representative at the store before leaving. Delivery docket receipts with
confirmation sign offs by the client would be collected at the end of the week and sent
back to the ordering department for processing. The route the delivery truck would take
would be determined by the driver and knowledge of the local area.
The client is expected to pay for the ordered stock by direct bank deposit or cheque. But
due to the delays in this process, payments may take up to 10 days to be processed.
Promotion of new products is only done via postal outs.

5|Page
Issues with the current processes.

While the current process seems to work reasonably well on this small scale, these
processes would not be adequate to serve future clients from other local developing
neighbourhoods. The identified issues include:
• Inadequate level of connectivity between the business and the clients.
• Current phone ordering process only allows a single order to occur at any time.
• The majority of the inter-department communications is done via phone or
email, with formal paperwork being exchanged via the internal mail system.
• Lack of connectivity between the ordering system and stock control
• Lack of connectivity between the ordering system and dispatch system
• Lack of connectivity between the dispatch system and the transportation system.
• The truck driver is not contactable during the delivery process.
• The truck is not being tracked during the delivery process.
• The process to assure that the delivery person (truck driver) has confirmed the
delivery (client sign off) and delivery receipt is very inefficient (1 week delay).
• Inefficient quality control process- used by dates not centrally available.
• Inefficient complaints handling and logging facility.
• Difficult to adequately measure waste (unused expired products)
• Poor product promotion

6|Page
Required Improvements

After some discussion with the board members, the general manager has sought
funding and a commitment to substantial changes that should move this company to a
more competitive standing. This consist of developing a new set of processes,
procedures with the support of new technologies, including;
• Developing a new customer interface for ordering and promotion of new
products. Also provides a fault/complaint logging system
• Provide a stock control system to monitor available products and expiry
details.
• Stock control system needs to integrated into the ordering system
• Ordering output data needs to be instantly accessible by the dispatch dept.
• Automatic assignment of stock to transport options.
• Portable delivery driver system to enable electronic sign off and e-receipts on
delivery of products.
• Portable delivery driver system provides most efficient route based on best
available data (congestion details, free or toll roads options, etc). Provides the
home base (GDF) to dynamically track

The general manager would like to have a clearer understanding before these changes
are implemented so he has asked you to submit a business report (with academic
references) with the relevant information (refer back to the main assignment outline to
understand the tasks associated with this case study).

7|Page