Finding a New Warehouse and Office for Blue Bell Creameries

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  • Topic: McAllen, Texas, Rio Grande Valley, Blue Bell Creameries
  • Pages : 8 (2970 words )
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  • Published : January 23, 2013
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Finding A New Warehouse and Office for Blue Bell Creameries

Operations Management

Blue Bell Creameries
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Founded in 1907 in Brenham, Texas, the Brenham Creamery Company originated as, and continues to be, a family owned business. It initially specialized in the making of butter. In order to produce this good, excess cream possessed by surrounding farmers was purchased. A few years later, the Brenham Creamery Company began making and selling ice cream. This action soon proved to be very satisfactory as it began generating profits for the company. However, it was not until 1930 that the company officially changed its name to Blue Bell Creameries. Blue Bell has successfully infiltrated its respective market. Although their ice cream can be found throughout only 20 states in the nation, it is the third best-selling ice cream in the United States, following Breyers and Edy’s/Dreyer’s (Funding Universe). Blue Bell’s success can be measured through their need of facility expansion. Currently, there are 49 operating branches. A vital branch to this company is located in Harlingen, Texas. It will be the primary focus of our study. The Harlingen Branch is located at 300 Hanmore Industrial Parkway and Expressway 83. It serves as the main distributor of Blue Bell ice cream throughout the Rio Grande Valley. The branch is situated in a high traffic area. The territory where the branch is located is no more than one third of an acre in size. The region surrounding the branch is completely occupied by local businesses. Lack of land size has created a parking issue. It is unable to house its seven delivery trucks. They have remedied this situation by renting a parking facility in Pharr, Texas.

Current Issues The Blue Bell branch in Harlingen has acquired several problems over the years. First they have outgrown their current warehouse in Harlingen. Currently they have one third acre off the expressway and there is no way of expanding it due to all the other companies that surround it. They have thirteen current routes that travel from South Padre Island and all the way to Roma; seven are in the eastern area and six in the western. Due to Harlingen’s branch being so close to Mexico, they have to store their strawberries that come from Mexico in their warehouse. This is an inconvenience to them because they have grown so much over the years that the strawberries have to be placed on the floor due to there being no more space on their shelves.

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The second problem that they have acquired is cost; seven years ago they decided to rent a lot space in Pharr for their eastern routes. They currently pay $54 per truck, this includes the rent space and electricity that the truck uses, and they have seven trucks that are over there. This cost is roughly $378 a month, $4536 a year and $31,752 over the past seven years they have been there and it will just keep adding over the years. They are paying on an investment that they will never own, we believe that they should invest on a project that they can eventually own. The second cost is the diesel that each of the seven drivers waste when they finish their route because they have to drive all the back to Harlingen to load their truck for the next day and drive back to Pharr to drop off their truck at the lot. This costly drive is roughly two hours a day, five days a week, wasted in both diesel and payroll. The third problem that they have is when a last minute order comes up for the eastern route a truck driver from the western route has to go to the harlingen branch and then take the product to wherever it needs to be. The drivers usually only have the exact amount of product that they need, they do not carry extra product. The final problem, when a truck breaks down over in the eastern route, lets use Roma as an example, the driver has to wait for the operational manager from the branch in Harlingen to drive to the location of the broken truck and try to fix it. When this happens...
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