Logistics Buisness

Part 1– Metrics to Assess Success –

TWO PARTS TO THIS A and B

The assignment must be a completed paper, with APA formatting, all sections complete (using Roman numerals of each section per the outline), references, and good grammar.

Part A: you are working for a company that produces small and medium sized coolers. Typical application is for outdoor picnics. Currently all the production and distribution happens out of a facility on the East Coast. Your company has had challenges reaching the customers on the West Coast as a result of the high freight rates, due low density of the product.

The marketing manager tried to mitigate this competitive disadvantage by freight equalization; so that end customers would pay the same amount of shipping costs as the West Coast competition charged, regardless of where they were located. This met with some insignificant success because timeliness of delivery was another important issue. However, this did affect the margins negatively since the company now is taking the hit for the less-than-truck-load shipments to West Coast customers.

CEO of the company asked you assess 3 options and to give your recommendation on the way the company should progress:

  • Keep the current setup, continue shipping products from the East Coast facility and distribution center westward;
  • Contract a distribution facility on the West Coast to ship full truck loads from the factory there, thus distributing to the final customers using less-than-truck-loads; or
  • Establish both a production facility and the distribution facility on the West Coast. One complication with that is the fact that all the raw materials are still coming from the East Coast.

Part A Deliverables:

Section I: Introduction (200 words)

State the problem at hand and alternatives. What are some of the advantages and disadvantages of the distributing products from multiple locations based on your research?

Section II: Manufacturing operations flows (300-500 words)

Discuss the product flows in the manufacturing environment. What are the steps involved in producing the order and shipping it the customer. List the activities and rough timelines. What are some of the risks behind not completing certain activity on time (hint: think of the customer impact)

Section III: Metrics to Assess Success (300-500 words)

What are some of the reasons to measure the performance metrics (KPIs)? List at least 3 specific metrics to access success, be as specific as possible. How would the metrics be measured? Do you believe they should be shared with employees?

Provide citations and references to support your information.

Part B Deliverables:

Section IV: Qualitative Factors (500-700 words)

This assignment builds on the assignment you have completed in Part A. You will build on the work that you have already done to complete sections IV, V, and VI in this assignment. Once finished, you will compile your work from Part A & B in one single document with a cover page, a reference page, and a table of contents.

For this assignment, you will identify 3 subjective, qualitative factors to consider. Once you have explained each select the one out of the three options listed that you recommend most. What factors may affect the demand for the product in the future?

Section V: Quantitative Factors (Excel Spreadsheet)

Discuss the quantitative factors that may affect the option we are to choose. Use this template Attached “logistics template” to show your numeric calculations. Without calculations shown for how you reached your conclusion, section V will earn 0 points. Fill out the Excel template Attached “ Logistics Template 2” attached. Discuss your findings. You must attach the table to your paper in Appendix or as a separate file to get the credit for this part. Additional data for your recommendation is below:

  1. The products are primarily medium- and large-size insulated coolers, like you might use for a picnic or trip to the beach. Each cooler occupies 2 cubic feet of trailer truck space; trailers are 10 x 10 x 40’ long and cost $1,000 to ship from the East Coast to the West Coast.
  2. Based on this information, the added freight cost to get raw materials to a West Coast manufacturing location would be .20, .20, and .60 per finished-good unit, respectively.
  3. The mass merchandiser location on the West Coast will be purchasing 10,000 units per week, but in lots of only 1,000 at a time because of their retail store space constraints.
  4. The raw materials to make this product are bulky, and inbound shipping from the suppliers to the manufacturing plant represents 20% of total raw material costs. These raw materials are supplied in the United States from the East Coast; they are not available elsewhere.
  5. In the past, to keep West Coast customers happy, the CEO agreed to freight equalize customer shipping charges to be competitive with West Coast competition. She says that they only charge those customers the local freight cost of shipping, which is $200 per delivery for anything up to half-truckload quantities.

Section VI: Conclusion (200 words)

What is your conclusion based on what you have discussed in the paper. What option do you recommend the company to pursue? What are the most important points that you want the CEO to understand about this entire decision-making process?

 
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