A systems study on the distribution system of AAA Foodmart, Inc.

• Main Authors: Ang, Terence Benson, De Guzman, Juancho F., De Guzman, Ryan C.
• Format: text
• Language: English
• Published: Animo Repository 1999
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/12091
• Institution: De La Salle University

Executive Summary. This undergraduate thesis contains a system study on the distribution systems of a bakery firm hidden under the name of AAA Foodmart Incorporated. The system under study is characterized by a centralized distribution of bakery goods involving one production plant in Sta. Cruz, Manila and twenty-one (21) branches located in the Metropolis and nearby provinces. Considering the perishability of bakery goods, no finished product nor work-in-process inventory is maintained at the production site while minimal inventory is maintained at the branches. All branches rely on daily morning deliveries for replenishing of its stocks of bakery goods. Late deliveries, placed at 67.12% with monthly profit losses of P 11,895.43, was determined to be the most significant problem besetting the company. Problem analysis identified the absence of set departure times, faulty truck routing, frequent worker tardiness, ineffective lifting of crates and work stoppages due to lack of coordination as among the top contributors to the problem of late deliveries. The proponents of the study have developed a more effective and efficient distribution system which is designed to reduce late deliveries from 67.12% to 5% lateness. The study has set departure times for all truck delivery routes based on the required time of arrivals at the branches. These departure times are obtained based on simulation results using the Arena software based on past delivery performances. The departure times have taken into account traffic at the routes, varying loading and unloading times at the branches. It is theorized that as long as these departure times are met, no late deliveries will be incurred at the route. System improvements at the distribution site are then geared to meet the set departure times. Major system changes include expanded dispatching area, improved layout for minimal traffic congestion, installation of dolly railways, cooperative loading as against one-man loading, improved truck routing, new checking sequence and assignment, standardized checking procedures, use of markers for the checking procedure to eliminate the need for oral instructions, implementation of worker incentives and the assignment of an over-all distribution supervisor. A 92.55% improvement on late deliveries can be obtained when the proposed system is implemented. Initial investment of P 60,000 will be returned after nine (9) months. Quantitative benefits of P 111,963.96 in a period of two years is expected upon implementation. Not to mention the qualitative benefits that include franchise satisfaction due to improved delivery service and increased customer satisfaction.