Case Assignment Facilities Planning and Warehousing

Subject: General Questions / General General Questions
Module 1 – Case

Facilities Planning and Warehousing

Case Assignment

You and your rich friends are entrepreneurs in Silicon Valley, but you don’t have the smarts to either build new devices or write new apps. (Sorry.) Instead, you’re interested in tapping a more prosaic market; the geeks who build new devices, and write new apps.

These guys and gals, both employees and graduate students, never seem to sleep. And they get hungry at all hours of the day and night. This has been good news for the various pizzerias and burger joints that never close, and also offer 24/7 delivery. But you have a feeling that the market for prepared food is saturated. Further, it doesn’t satisfy everyone’s needs. What about the geek girl who feels the overwhelming urge to cook a tub of spaghetti sauce at 3:00 Sunday morning, but doesn’t have any oregano? What about the farm boy, overcome with longing for his Mom’s cooking, who wants some calf’s liver smothered in onions? In other words, what about the weirdos who actually want groceries at all hours of the day and night?

You have a tentative name for the business: Customers visit the site, and select items for delivery using one of two shopping modes: by store (specify a business, see what it sells, and pick items) or by product (specify a grocery item, see which stores stock it, and pick a store). As usual, the customers fill shopping carts online, enter their plastic, and await delivery. You plan to charge outrageous prices, but hey – this isn’t a price-sensitive crowd.

Order fulfillment would take place in one of two ways; either directly from a store, or from your own small, very selectively stocked warehouse. Here’s now it would work.

If the store is open, you send a shopping list to the store, and they fill a box for you to pickup – and add their own markup, for the extra work. If the store is closed, one of your own agents, bonded and preapproved by the store, opens the store up, gets the stuff, and leaves an invoice at Customer Service. If a store isn’t open, and you can’t reach an agreement with the owners to let one of your guys go rummaging through the shelves in the middle of the night, then that store wouldn’t be on your website during the hours that it’s closed.

If the customer orders by product, then you have two options; either go to the nearest store that has the requested items, or fill the order out of your own warehouse. The items in the warehouse either belong to you, having been purchased from a wholesaler, or are there on consignment – that is, they belong to local merchants, and they’re letting you keep them and sell them on their behalf. Perishables are either frozen rock-hard, or (in the case of fresh vegetables) not available unless a market is open for pickup.

All in all, it would be an ambitious, enormously complex enterprise. It would be impossible without cutting-edge apps, which your geek coworkers are developing for you.

At the moment, you’re in the fact-gathering, preliminary planning stage. The immediate problem is the warehouse. What information would you need to determine:

1. A satisfactory site?

2. What items would need to be kept in stock, and the optimum stocking level of each?

3. What size facility is needed – both floor space (sqft) and volume (cubic ft)?

4. An optimum system for locating items, so your employees will know where to put them when they arrive, and find them when they’re needed?

Pertaining to number 4 above: You’re anticipating the need for some sort of scanning system that identifies items as they arrive, keeps track of where they’re located in the warehouse, and issues instructions for retrieving them. Most, but not all, of the items will arrive with some sort of computer-friendly label already affixed; however, the label doesn’t necessarily provide all the information you might need, particularly for the items that are there on consignment. For those items, it would be nice to know to whom they actually belong. You’re also interested in the possibility of generating barcode labels for customers, to be affixed to the sacks and cartons containing their orders. The delivery people could read those labels with hand-held devices, and receive real-time driving instructions that take traffic congestion and road closures into account. The three labeling options are UPC barcoding, RDIF tags (either single-use or reusable) or 2-D barcodes using one of the standard protocols.

5. Which of the three options would be best? Why? Explain.

In conclusion, you should give some thought to safety.

6. What are the minimum procedures you should put into place, to ensure that your warehouse workers (probably no more than one or two people) aren’t exposed to unnecessary risks?

Module 1 – SLP

Facilities Planning and Warehousing

The Trident Session Long Project (SLP) is, in fact, a session long project. However, each the four discrete assignments is uploaded and graded separately. The purpose of the project is to embed the concepts of the course in a real-world example of your own choosing.

Pick an organization to examine throughout the course. It may be one you work for, or have worked for; but in any event, it should be one you’re familiar with, and about which you’re able to collect information. It’s particularly important you be able to collect information about the following logistical functions:

· Facilities layout and warehousing (Module 1)

· Product distribution (Module 2)

· Logistical quality control (Module 3)

· Reverse logistics (Module 4)

A few words about each of these broadly-defined functions may be helpful.

· Facilities layout and warehousing, from the logistical point of view, is primarily concerned with the temporary storage, management and retrieval of materiel received in advance of immediate requirements, and products either awaiting sale or being held for customers in advance of agreed-upon delivery dates.

· Product distribution is the process by which the goods and services created by the organization are made available to users.

· Logistical quality control is the process of monitoring logistical processes, identifying problems, and resolving them. It’s a continuous process.

· Reverse logistics pertains to the organization’s involvement in the movement and disposition of goods following their use by customers. This includes such topics as customer returns, collection and disposal of wastes, and recycling.

For the first SLP, please address the following topics:

1. The name of the organization

2. Its primary business or mission

3. Why you chose this business

4. How it handles its warehousing functions

Submit the assignment for grading by the end of this Module.

Module 2 – Case

Product Distribution

Case Assignment

Respond to either Topic I or II, below.

Topic I: Delivering Groceries

Please refer to the hypothetical grocery delivery business described in Case 1. You are now confronted with a decision concerning transportation modes.

Obviously, neither trains, ships, pipelines, large trucks nor airplanes are options for deliveries in residential neighborhoods (although drones may be an option in the near future). The options for your business are cars, motorcycles or bicycles.

Cars can either be owned by the business, leased by the business, provided by employees (e.g. the usual pizza delivery scheme), or rented on a per-trip basis from a taxi company or private owners (à la Uber). A mixture of these options is also a possibility.

Motorcycles can be owned by either the riders or by the business. Ditto bicycles. Although the weather in Silicon Valley is generally temperate, a delivery system that relied exclusively upon wind-in-the-face vehicles would have to have some sort of foul weather backup.

In addition to flexibility and cost-effectiveness, whatever system you devise will have to consider the availability of operators and insurance costs, both for your employees and for the people they may run over.

The readings in this Module are mostly concerned with “heavy” systems, up to and including multimodal (ships to trains to trucks), but the basic considerations involved in choosing a system – speed, efficiency, cost-effectiveness, safety, etc. – are applicable to any type of technology.

So what sort of transportation mix would you choose for your business? We’re looking for close, logical argumentation, backed up by citations and references.

Topic II: The Keystone Pipeline

The case of the Keystone pipeline clearly illustrates the centrality of logistics in daily life. Pipelines, trains and trucks are everywhere, but are usually ignored until there’s some sort of stoppage (e.g., a drivers’ strike) or a major disaster, such as a derailment resulting in a dangerous spill.

The Keystone pipeline, championed by business and opposed by environmentalists, would move millions of tons of thick, sludgy oil from the tar sands of northern Canada to the American Gulf Coast. At the time of this writing, the Congress has approved it, but the President has promised to veto it. Strong partisan feelings dominate the discussion.

For this assignment, you should read the additional sources, plus anything else you can find on both sides of the issue, and state your case either for or against the pipeline. The most important logistical factors are cost and safety. The most important environmental factors are oil production from tar sands, which is a polluting activity, and the global-warming implications of having another major source of inexpensive petroleum.

By the time you read this topic, the issue may be resolved, and the pipeline either cancelled or under construction. If that’s the case, then please discuss the resolution, detailing the factors that entered into the decision. You should also explain why you think the decision was either right or wrong, and whether you believe it ought to be reversed. (Government decisions are sometimes wrong, and can be reversed.)

As always, we’re looking for close, logical argumentation, backed up with citations and references. Strong opinions are permitted, even encouraged – but they must be supported.

Module 2 – SLP

Product Distribution

Product Distribution

This SLP continues your analysis of the organization you nominated in SLP1.

You may find it convenient to review the thumbnail descriptions of the various logistical functions, found in SLP1.

For this SLP, please address the organization’s product distribution strategy, to include:

· Transportation modes

· Ownership and management of the modes (the organization, common carriers, contract carriers etc.)

· The rationale behind the use of those modes

· The strengths and weaknesses of those modes

· Future developments, such as anticipated technological advances and resource availability, that may affect the choice of transportation modes

Submit the assignment for grading by the end of this Module.

Module 3 – Case

Logistical Quality Control

Case Assignment

Please refer to the Case 1 description of the hypothetical grocery delivery company.

Let’s suppose the company has Taken Off, and is now a Big Deal in Silicon Valley. Thousands of otherworldly, overpaid people, many of whom could either find the time to go shopping themselves, or delegate the task to their PAs, have come to rely upon for groceries – and not just at 3:00 AM on Sunday morning.

The company’s success has been due to its clean, beautifully intuitive shopping app, which works flawlessly on every device, and also to its awesomely fast delivery service. In one instance, which has become the stuff of local legend, a millionaire’s trophy wife was horrified to discover that she was completely out of cocktail onions, and a party she was hosting was beginning in a half hour. She placed an order on her cellphone, and a motorcycle courier from MyShoppingCart had the onions in her hand in 17 minutes flat. (That $1.75 jar of onions did, of course, cost her $50, charged to her American Express card, but she didn’t notice.)

But now the company has encountered a problem — the warehouse. There are bottlenecks: it’s taking too long for items to get from the receiving side of the shipping dock to the shelves. It’s taking too long to pick an order from the shelves and get it out the door, in either a car trunk or motorcycle saddlebags. There’s no minimum acceptable time for either activity; the emphasis is always on making things faster.

Obviously, it’s impossible to know the particulars of what’s going on. But how would you find out? Once you know, what sort of program would you put into place, to make things better? In particular:

1. How would you go about benchmarking the warehouse’s performance?

2. How would you collect data concerning the details of warehouse performance?

3. How would you apply the PDCA process to improving performance?

Your discussion should be solidly grounded in the background materials, and supported by citations and references.

Module 3 – SLP

Logistical Quality Control

This SLP continues your analysis of the organization you nominated in SLP1.

You may find it convenient to review the thumbnail descriptions of the various logistical functions, found in SLP1.

For this SLP, please address the organization’s logistical quality distribution strategy, to include:

· The specifically logistical functions for which the organization is responsible.

· The metrics pertaining to those functions that determine quality. Possible metrics are timeliness, reliability, cost, shrinkage (damage and loss), etc.

· How those metrics are monitored.

· How the organization applies Deming’s PDCA paradigm to quality control; or if it doesn’t, how it could or should apply that paradigm.

Module 4 – Case

Reverse Logistics

Case Assignment

We return to the hypothetical grocery delivery business described in Case 1.

If you buy a defective computer, then it’s a given that you’re going to take it back to where you bought it, either to be repaired, replaced, or returned in exchange for a refund. If you buy a net of onions that has some moldy ones in it, then it’s a given that you’ll simply throw them away. Taking them back to the store isn’t worth the trouble.

In the case of MyShoppingCart, the situation is a bit more complex. Your customers are paying a high premium for fast, 24/7 delivery of groceries. If a Silicon Valley matron gets a corked bottle of pinot grigio, or a tin of pate de foie gras with an unwholesome aroma, then she expects your company to come get it, and credit her account.

This is an example of reverse logistics, which your readings describe as “a supply chain opportunity.” But you’re having difficulty finding any opportunities in the smelly bags of spoiled groceries that turn up at your warehouse from time to time. This problem is a lemon. Your challenge – to make lemonade!

Carefully examine the situation, and discern any opportunities to profit from the returns, or at least earn enough money to offset the losses. Here are some clues. You bought the products from somebody, right? Maybe they’re good for it. Also: information about product quality is valuable, at least in principle. How could you monetize that value? Who would be interested in seeing that information, and what could you gain by providing it to them?

Again, be sure to base your discussion on a close reading of the required sources. Be sure to provide citations and references.

Module 4 – SLP

Reverse Logistics

This SLP continues your analysis of the organization you nominated in SLP1.

You may find it convenient to review the thumbnail descriptions of the various logistical functions, found in SLP1.

For this SLP, please address the organization’s involvement in reverse logistics. The nature of reverse logistics depends upon the organization. Not all of the following topics may be relevant; please address those that are.

· How the organization handles customer returns, to include return policy.

· Organizational participation in recycling and repurposing efforts

· Organizational responsibility for after-end-user disposal and pollution

· Organizational involvement in customer efforts to increase efficiency and decrease waste

Submit the assignment for grading by the end of this Module.

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