Case Study B: Last minute ordering
3.1 The scenario
Members were presented with a case study in which buyers regularly amend daily orders and
sometimes cancel orders altogether.
Context: A farm in Kenya produces fresh produce for a UK retailer. The farm has an annual
contract with the retailer. Produce is flown overnight every night to be on the shelves for the
next day. The farm has thousands of workers whose families rely on the income that is
generated through this work.
Buying practice: The UK buyer forecasts orders on a weekly basis. However, the daily
requirements are amended throughout the week according to daily sales data, UK weather,
promotional competition and department wastage targets. On average, orders are revised (up
or down) three days a week and the change is faxed through to the supplier by mid-afternoon.
The changes in volume are often around 50% more or less than the forecast. When demand is
sufficiently low, the order is cancelled altogether (this happens approximately ten times a
year).
The supplier and worker scenario: Any changes to the daily order are received at the
grower’s packhouse in the late afternoon.
If the order is increased, underproduction is addressed by asking workers to do overtime.
Women workers rely on company transport to take them home because it is unsafe to walk
and, as buses do not leave until the later shift is finished, many workers have little choice but
to continue working overtime. Furthermore, supervisors sometimes intimidate the women to
stay and help meet the order. As a result, people who work in the packhouse have to work
longer hours in cold conditions to meet the increased order. In addition, the farm manager is
unable to negotiate a higher price for the additional stock, and so does not pay the workers a
higher hourly rate for overtime.
If the order is decreased or cancelled, the lost revenue has to be factored into the suppliers’
costs. As a result, the supplier sends workers home early and does not pay them fully for the
hours worked.