Solving complex supply chain problems
A Dexion case study

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Page 3: Decision making

Dexion 2 Diagram 1All of these changes represent significant decisions in developing marketing strategies. The advance of more integrated systems has helped to develop a more sophisticated supply chain which help to generate maximum productivity from the labour force and to optimise the use of available space.

Although chocolate production is a continuous process, it has to meet highly specified seasonal requirements, which peak both at Christmas and at Easter. For this reason chocolate cannot be supplied by a major manufacturer such as Cadbury on a just-in-time basis. These seasonal demands are impossible to cope with, without a progressive build-up to meet the demand. For example, Cadbury’s Creme Eggs are manufactured all year round but are only supplied to shops from January to Easter. Easter Eggs obviously peak at Easter while other chocolate sales have to be maintained throughout the year.

The storage of chocolate products can be critical. It requires special facilities as the product might deteriorate if it is not kept in a chilled environment. Any new warehouse has to have the capability of storing in ideal conditions, to meet demand peaks and, in order to provide for the needs of customers, be able to discharge to retailers in huge volumes over very short demand periods.

Solving this type of problem required a massive investment. Given the size and nature of the needs it was essential to avoid any wastage of space. Cadbury invested more than £24 million in a state-of-the-art storage and distribution facility on a greenfield site at Minworth, near Birmingham. Its major benefit was that it was close to the Cadbury point of manufacture at Bournville which would help to minimise costs from the manufacturer to the warehouse.

The warehouse was designed around the requirements of the storage system and when the main contractor for the new building, Taylor Woodrow Design & Build, specified the equipment to be installed, they chose Dexion’s double deep pallet storage system. This system was selected because it offered the best combination of storage density and product selectivity thus making the best use of the available floor space.

Dexion | Solving complex supply chain problems