Short case Seasonal salads Lettuce is an all-year-round ingredient for most salads, but both the harvesting of the crop and its demand are seasonal. Lettuces are perishable and must be kept in cold stores and transported in refrigerated vehicles. Even then the product stays fresh for a maximum of only a week. In most north European countries, demand continues throughout the winter at around half the summer levels, but outdoor crops cannot be grown during the winter months. Glasshouse cultivation is possible but expensive. One of Europe's largest lettuce growers is G's Fresh Salads, based in the UK. Its supermarket customers require fresh produce to be delivered 364 days a year, but because of the limitations of the English growing season, the company has developed other sources of supply in Europe. It acquired a farm and packhouse in the Murcia region of south-eastern Spain, which provides the bulk of salad crops during the winter, transported daily to the UK by a fleet of refrigerated trucks. Further top-up produce is imported by air from around the world. Sales forecasts are agreed with the individual supermarkets well in advance, allowing the planting and growing programmes to be matched to the anticipated level of sales. However, the programme is only a rough guide. The supermarkets may change their orders right up dominant factor. First, it determines supply - how well the crop grows and how easy it is to harvest. Second, it influences sales - cold, wet periods during the summer discourage the eating of salads, whereas hot spells boost it. Figure 11.6 illustrates this. The iceberg lettuce sales programme is shown and compared with the actual English-grown and Spanish-grown sales. The fluctuating nature of the actual sales is the result of a combination of weather-related availability and supermarket demand. These do not always match. When demand is higher than expected, the picking rigs and their crews continue to work into the middle of night, under floodlights. Another capacity problem is the operation's staffing levels. It relies on temporary seasonal harvesting and packing staff to supplement the full-time employees for both the English and Spanish seasons. Since most of the crop is transported to the UK in bulk, a large permanent staff is maintained for packing and distribution in the UK. The majority of the Spanish workforce is temporary, with only a small number retained during the extremely hot summer to grow and harvest other crops such as melons. The specialist lettuce harvesting machines (the 'rigs') are shipped over to Spain every year at the end of the English season, so that the company can achieve maximum utilization from all this expensive capital equipment. These rigs not only enable very high productivity of the pickers but also ensure the best possible conditions for quality packing and rapid transportation to the cold stores. Questions 1. Which capacity management option (level capacity, chase demand, manage demand) is used by the company? 2. What methods could the company use in order to forecast the demand? 3. What methods does the company use in order to adjust its capacity? Heads of iceberg lettuce 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Week number 1 3 5 June 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 August (forecast of demand) Programme sales November January English-grown sales May Spanish-grown sales Figure 11.6 Typical year's iceberg lettuce sales