Ava Beane has considered, within the case study, two possible alternatives that would help enforce the four objectives given from the Scientific Glass executives. These four objectives are: improve order fulfillment time for both old and new customers, reduce customer backorders; reduce sales team involvement in tracking and expediting delayed product orders; and increase inventory turnover which would reduce overage and underage costs. Beane hypothesize that to achieve these objectives, the company would either have to centralize all warehouse functions or to completely outsource the warehouse process (Schmidt and Wheelhouse, pg. 6-7). The centralize warehouse option that Beane proposes would have the company close down a majority, if not …show more content…
The company would have to employ its current third-party shipper to transport the product from Waltham to Atlanta. From there Global Logistics would hold all inventory for Scientific Glass and due to the high volume of product that the firm produces, Global Logistics would cover all warehouse rental fees. Global Logistics would also provide all order fulfillment and inventory control processes. As for shipping to Scientific Glass’s customers, Global Logistics will give the company a discounted shipping rate for each of the region that Global Logistics serves, which each region has their own rate. Using a similar comparison with the first alternative, the cost of shipping the average product weight from Waltham to Atlanta, a cost of $4.00, and then from the Global Logistics warehouse to a customer in Dallas, which the end destination is in the Central shipping region, which is a flat rate of $22.25. Again, total average shipping costs are greater than the current setup, but there are added advantages. With all warehouse operation functions being outsourced, the company can focus on increasing sales, understanding emerging customer needs, and develop the next generation of products. The best way for Ava Beane to determine the best course of action between the two alternatives and the current decentralized warehouse setup, Beane would need to do a weighted-point model. The model below would be a possible example employed by Beane (Swink, Melynk, Cooper, and Hartly, pg.
...to deal with inbound and outbound logistics, one that is made up mostly of the personnel from outbound logistics. These professionals deal with the second core competency of Deere, logistics, separate from the manufacturing of tractors and lawnmowers. The creation of this team helps eliminate the risk Fedex’s poor performance (managers were not pleased with Fedex’s centralized transportation management service) and need to measure performance of a 3rd part continuously. As a result, performance is self-managed. We expect as the IT system is used to optimize and plan transportation routes amongst inbound and outbound trucks, cost savings will increase more rapidly. We believe internal continuous improvement, leaner logistics operations and synergies amongst all logistics activities will lead to the $69 million goal being met by the third year after implementation.
Inventory would no longer be a good option for them since holding inventory in a rather quick selling environment is deem bad for the company, showing inability to sell based on consumer demand and has to pay inventory cost. They would also need to implement and focus more on consumer demand, increasing the need to hire market researchers and so on to evaluate the right amount of products to supply. Great customer service will be required in order to satisfy large amount of end users rather than just dealing with a few B2B
The purpose of this paper is to analyze and discuss the effectiveness of the Target Stores supply chain. Target was founded in 1902 by George Draper Dayton who after partnering with the owner of Goodfellow Dry Goods Company for a year decided he wanted to have more involvement, so he purchased Goodfellows renaming it Dayton Dry Goods Company. After purchasing the store Mr. Dayton remained in management until the time of his death in 1938. By this time the store had seen many changes including a name change in 1911 changing from Dayton Dry Goods Company to The Dayton Company, as well as an addition of the Dayton Foundation in 1918. After Mr. Dayton’s death the family continued managing the business until 1983 in which the last two managing Dayton’s retired, ending 80 years of the Dayton’s family management (Target Corporation, 2014).
People will do almost anything it takes to save money. Clipping coupons and ad matching are common avenues to reducing costs. Buying in bulk and purchasing items at a warehouse store is another way to save. The two largest warehouse stores in the United States are Costco and Sam’s Club. Costco and Sam’s Club share the advantage of low prices; however, Costco excels in member benefits, number of locations and overall shopping experience.
Lastly, the stores and warehouses are not communicating well which is resulting in confusion for both parties. Store managers waste time by having to spend store hours on the phone with the DC to expedite demanded stock. This time waste can be avoided by properly organizing the warehouse and having informed workers who can get the job done right and on time. Also worth mentioning is the current condition of the warehouse; there is inventory underneath conveyors and scattered across aisles, making it harder to track down stock.
In order to minimize the total shipping costs in the Darby distribution system, linear programming can be used.
The purpose of this report is to understand the evolution of the inventory management of Amazon and how it has affected the company’s growth. This case study is both a practice case and a problem solving case, so the first section of this report focuses on the practices used by Amazon in the 4 stages and then in the second section we will solve the problem regarding their product returns problem and provide recommendations.
2) Knowing the selling price of the item. And from the first two pieces of data Bean is then able to calculate the profit margin generated from each individual item. Thus, profit margin = selling price – cost of item also relates to the costs of under stocking. 3) Knowing the liquidation cost of an item to calculate the costs of overstocking. With these calculations, Bean can use these methods mentioned in Q1 to decide what the final amount of items to stock are. Furthermore, Bean will need to compare the costs associated with under stocking relative to the sum of under stocking plus overstocking inventory. However, the costs of under stocking should not only include short terms losses, i.e. loss of sale for that item at that time, but also the loss of future business due to customer dissatisfaction. Bean must also consider that if a particular item is not in stock that entire purchase order may be cancelled. Costs of overstocking should include costs to hold inventory and consider that these might change if the salvage value of a product leftover is depended upon the number of units remaining at the end of the season. If there is a lot of product leftover, then the liquidation value might decrease and items will be transferred to next
Global: Worldwide packaging shipping volume is increasing as a result of global exchange, e-commerce, and changes in supply-chain management.
From the manufacturers’ warehouse to the shelves, the business must orchestrate a symphony of the right products to the right places at the right times. Walmart serves customers and members more than 200 million times per week in retail outlets, online and on mobile devices. The company is able to offer a vast range of products at the lowest costs in the shortest possible time (Chandran, 2001). The main reason for this incredible growth of Walmart is because its distribution centers are highly automated.
Quickly becoming apparent after only a few rounds of play was in the absence of coordinating direction the individual supply chain links immediately focused upon acting in their own best interests much more so than the organization as a whole. Whether the end use customer was satisfied became secondary to avoiding stock outages for the next link in the chain, or their specific “upstream customer”. The real world application of this example is that focus on the end use customer must be consistent and maintained throughout the process up to and including delivery. Undoubtedly internal customers, such as retailers to wholesalers and distributors to production, must be serviced along the way for the transaction to ultimately occur. However, unless an end use customer is involved no profit can be realized by anyone.
In today’s competitive environment, organizations are directing their focus to the importance and impact a facility location can have on meeting strategic goals, at the lowest possible cost. A facility location decision is a complex task that involves both qualitative and qualitative factors to achieve and sustain an efficient supply chain. Facility location decisions closely involve other supply chain management decisions such as transportation and inventory management; however these factors can be adjusted with relative ease in order to respond to changes in demand and throughout the supply chain. Conversely, decisions regarding facility locations are “often strategic in nature and entail long term decisions, exposing firms to many uncertainties during the lifetime of a facility” (Baron, Milner, & Naseraldin, 2011, p. 774).
Over the past couple of years, Walmart has boosted its e-commerce operations and bringing in a large portion of revenues from online sales (Aronow & Burkett, 2015, p. 20). Gartner Inc. describes Walmart as a “supply chain pioneer” that has continued its push into e-commerce and has expanded investment in multichannel drive-thru pick-up centers and a ‘click-and-collect’ grocery service offered at some of its stores (Aronow & Burkett, 2015, p. 20). One of the components of Walmart’s supply chain in which their success is heavily relied on is the continuous improvement of their supply management as a whole, particularly within their e-commerce division. According to an article on the website logistics company Cerasis, “Not only has Walmart excelled over the decades in traditional supply chain management but… is also focused on continuous improvement by investing more into emerging technologies to capture more of the e-commerce market…” (University of San Francisco, 2015). A concept that our class had discussed time and time again throughout the semester was the concept of continuous improvement. Any given organization or business is constantly focused on continuously improving their business for the better. For Walmart, they believe that the anticipatory action of investing in emerging technologies will help differentiate themselves from the competition
All choices made by Seven-Eleven are structured to lower its transportation and receiving costs. For example, its area-dominance strategy of opening at least 50 to 60 stores in an area helps with marketing but also lowers the cost of replenishment. All manufacturing facilities are centralized to get the maximum benefit of capacity aggregation and also lower the inbound transportation cost from the manufacturer to the distribution center (DC). Seven-Eleven also requires all suppliers to deliver to the DC where products are sorted by temperature. This reduces the outbound transportation cost because of aggregation of deliveries across multiple suppliers. It also lowers the receiving cost. The information infrastructure is set up to allow store managers to place orders based on analysis of consumption data. The information infrastructure also facilitates the sorting of an order at the DC and receiving of the order at the store. The key point to emphasize here is that most decisions by Seven-Eleven are structured to aggregate transportation and receiving to make both cheaper.
International logistics requires many different options and requirements to be met in order for a company to operate internationally. It’s like a big puzzle that must be put together, in order for all the goals to be met. As described above, there are many options to consider, and sometimes what appears to be an option really isn’t. It is not difficult to hit a road block, and you must start over with a new plan. Once the logistics plan is in place, you must constantly look for improvements in order to maximize profits and goals.