Jt's Creamery Case Study

Harrison and van Hoek (2005), defines supply chain as, “a group of partners who collectively convert a basic commodity (upstream) into a finished product (downstream) that is valued by end-customers, and who manage returns at each stage” According to ABE Operational Management text, Chapter 2, risk can be defined as: “Any potential event, threat or failure that disrupts the upstream and downstream flow of material, information and finished goods thereby jeopardizing the focal organization’s ability to fulfill the requirements of its end customers, as a consequence, increasing the possibility of lower-than-anticipated profits.”

“Supply chain risks refer to the possibility and effects of a mismatch between supply and demand.” Juttner & Christopher

Sourcing and securing loyal suppliers of organically grown fruits and dairy produce is key towards JT’s creamery survival geared towards attaining twenty percent market share in the industry to which it’s operating in. JT’s creamery is faced with both internal and external supply chain risk which can be detrimental if not thoroughly managed.

In the first year of operation, JT’s creamery a small partnership company was faced with internal supply chain risks such as planning and control risk, caused by inadequate assessment and budgeting, which amount to ineffective management. JT’S creamery was also struggling with staff members that did retail sales from carts with bad cash management and failed at bring in accurate proceeds from cart sales. This led the partners to initiate more capital to sustain daily operations of the business.

Just like internal supply chain factors, JT’s creamery was also faced with external supply chain risks, such as demand risks caused by unpredictable or misunderstood customer and demands and supply risk, caused by interruptions to the flow of product, either by shortage or unavailability of raw material within the supply

These risks caused delays in production during the first two years of operation. When fruits are in season, JT’s creamery, will purchase large amounts, puree the fruits and freeze for later use. This will ensure that fast selling ice cream flavors are available throughout the year, to prevent the creamery from being forced to use any artificial flavoring when a specific fruit is scarce or not available.

Quantifying & Prioritizing risk: - JT’s creamery, has sourced financing to expand its operations, by purchasing assets such as, large ice cream machines, freezers and sterilizers which will facilitate bulk orders when in high demand.

Mitigating Risk: - JT creamery strategy, is to choose a supplier with an excellent track record and years within the supply chain to provide raw materials such as dairy, custard, essences, containers and ice cream cones. Monitoring inventory, together with accurate book keeping have become part of JT’s daily operations to ensure the business is operating