LOGI-150, Information Technology in Logistics
Assignment: Case Study #1

David Smith

Autumn Quarter
October 10, 2011

David Smith 1
Case Study #1

CEMA is a company local company that owns franchisees of YUM! Brand (Taco Bell, Long John Silvers, Pizza Hut, KFC, and A&W) restaurants. To get the food items to the final customer, goods travel though and integrated supply chain. First, goods and food are purchased from a company to be used in production. After YUM! purchases materials, they will produce the goods needed to make food for the end customer. After production, goods are then shipped via truck to a distribution center owned by another company, such as McLane Distribution. After CEMA submits orders for each store, the distribution center will load a refrigerated truck with goods stored at the distribution center and deliver them to the individual stores. At the stores, goods are stored appropriately until needed for use to make the actual food for consumer consumption. With this, tier 2 suppliers would be the group that actually gets raw materials such as beef and chicken to sell to YUM!. YUM! then produces their own products as a tier 1 supplier for the different restaurants. Since CEMA is a franchisee, they must purchase YUM! materials to keep a consistent product at all restaurants. McLane is the Distributer and supplies the restaurants with the goods they need to make food for the end user. YUM! contracts with its suppliers to deliver raw materials to its production plants electronically and by phone depending on the supplier. Truck is the most common way materials get to YUM!, but it depends on the supplier and how they transport the materials. Depending on the size of the supplier, they will either have their own trucks, or will contract with another company to deliver the materials. After production, materials are moved to the distribution center by McLane trucks or truck that YUM! has contracted to move materials. CEMA contacts McLane for their orders. They can do this by computer, phone or fax. If an order is not submitted within 12 hours of the cutoff time for orders, an automated reminder call is placed to the individual restaurant. If an order is not placed at the cutoff time, each restaurant has a “standing order” on file that will automatically be distributed for that delivery date. CEMA’s customers are end users, and are the ones that purchase prepared food by entering the restaurant. CEMA employees work with the customer to take their order via a point of sale system. This also tracks inventory by logging what items have been sold and how much product should have been used by prepared recipes stored in the office computer. There are not real outbound carriers for CEMA since the end user is taking the product they purchase for consumption. There are several risks associated with the supplier and