Appearance
QUESTION 3A: Emergency Logistics Response (25 marks)
Format: Crisis Management PlanTime Allocation: 56 minutes (2.25 minutes per mark)
CRISIS MANAGEMENT PLAN
TO: Menu-Craft Executive Committee
FROM: Operations Director
DATE: [Current Date]
SUBJECT: Emergency Response to GoFlow 7-Day Strike - Immediate Action Plan
1. SITUATION ASSESSMENT (5 marks)
Strike Impact Analysis GoFlow's announced 7-day strike creates immediate operational crisis affecting 15,000 pending deliveries across MC's customer base. This represents approximately £2.1 million in revenue at risk (15,000 orders × average £140 order value) because delayed deliveries will likely result in order cancellations and customer defections to competitors like HelloFresh who maintain multi-supplier logistics networks.
Critical Timeline Pressures The 24-hour notice period severely constrains response options, therefore MC must activate emergency protocols immediately. Peak delivery windows (Friday-Sunday) account for 65% of weekly volume, meaning 9,750 orders require urgent rerouting because customer expectations for weekend meal preparation cannot be compromised without significant reputation damage.
Stakeholder Risk Assessment Premium customers paying £12.99 monthly subscriptions expect guaranteed delivery reliability, therefore service failures will directly impact our 89% retention rate and £420 average customer lifetime value. Restaurant partners depend on ingredient sales for weekend revenue, meaning delivery delays cascade into B2B relationship strain and potential contract renegotiation pressures.
2. TARA FRAMEWORK APPLICATION (8 marks)
TRANSFER Risks Immediately engage emergency logistics insurance coverage (£500,000 annual premium) to claim compensation for delivery failures and customer retention costs. Activate force majeure clauses in customer service agreements because third-party supplier strikes constitute unforeseeable circumstances beyond MC's reasonable control.
AVOID Future Exposure Implement immediate dual-sourcing requirement for all logistics contracts exceeding 70% capacity share, therefore eliminating single-point-of-failure vulnerability. Establish minimum 72-hour alternative capacity reserves with secondary providers (DPD, Hermes) because current GoFlow dependency creates unacceptable operational risk concentration.
REDUCE Current Impact Deploy MC's own vehicle fleet (currently handling 15% of deliveries) to prioritize premium customers and high-CLV segments in central Ayeland region. Partner with local same-day courier services for urgent deliveries within 25-mile radius of distribution center because maintaining service for top 20% of customers preserves 80% of revenue impact under Pareto principle.
ACCEPT Controlled Losses Accept delivery delays for standard customers in outlying regions while maintaining transparent communication about service restoration timeline. Budget £150,000 for customer compensation (refunds, account credits) because proactive goodwill gestures cost less than reactive customer acquisition to replace defectors.
3. ALTERNATIVE DELIVERY OPTIONS (6 marks)
Emergency Multi-Carrier Network Immediately activate contracts with DPD (capacity: 3,000 daily deliveries), Royal Mail (2,500 deliveries), and regional couriers (1,500 deliveries) to handle 7,000 of the 15,000 affected orders. This approach costs approximately 40% more (£12 vs £8.50 average delivery cost) but maintains service for priority customer segments because protecting premium subscriptions preserves long-term revenue streams.
Click-and-Collect Partnership Establish emergency pickup points at Tesco and Sainsbury's locations within MC's delivery zones, offering customers £5 account credits for collection flexibility. This reduces delivery burden by estimated 2,000 orders while maintaining ingredient freshness because retail refrigeration capabilities support meal kit storage requirements.
Direct Customer Collection Offer voluntary pickup from MC's Ayeland distribution center with £10 compensation incentive, targeting customers within 30-mile radius. Market research indicates 15-20% of affected customers would accept collection option because significant discount offsets inconvenience for price-sensitive segments.
4. CUSTOMER COMMUNICATION STRATEGY (3 marks)
Proactive Transparency Protocol Deploy immediate SMS and email notifications to all affected customers with specific delivery update timelines and compensation offers. Communication emphasizes MC's commitment to service recovery because customer surveys indicate transparency during service failures improves loyalty more than perfect service alone.
Escalation Management Activate 24/7 customer service center with authority to approve refunds up to £50 per incident without management approval. Social media monitoring team responds to complaints within 2 hours because negative sentiment spreads rapidly across social platforms and impacts brand perception among potential customers.
5. COST MITIGATION STRATEGIES (3 marks)
Short-term Cost Controls Negotiate emergency rates with alternative carriers capped at 150% of standard GoFlow pricing through volume commitments. Suspend non-essential marketing spend (£75,000 weekly) to fund additional logistics costs because customer retention takes priority over new acquisition during crisis periods.
Recovery Investment Prioritization Allocate crisis budget toward high-CLV customers and geographic areas with strongest competitive pressure, therefore maximizing retention ROI. Track incremental costs against customer lifetime value to ensure crisis spending generates positive long-term returns because emergency investments must support strategic positioning rather than simply minimize short-term losses.
PROFESSIONAL SKILLS DEMONSTRATION:
- Analysis: Quantified impact assessment across customer segments and revenue streams
- Commercial Acumen: Cost-benefit evaluation of alternative delivery options with ROI considerations
- Communication: Clear crisis management structure with defined responsibilities and timelines