Inventory and St. Louis

The company needs to distribute stock from the warehouse to the stores every week, and costs will be incurred in doing so. Since NEXT has decreased in non-current assets; in particular Property, Plant and equipment, they would need to increase the productivity and space in order to operate in warehouses and distribute stock out to additional stores nationwide. Therefore, costs will be incurred when training the work force, and in order to meet the demands of consumers, wages and salaries will increase in time.

Answer 2- If there should be a single location for all three companies the inventory holding cost will reduce because the product is placing at one location instead of different three locations. Moreover, by doing this the insurance and misplacing of product of cost reduce but in transit of inventory will increase because the shipments are truck load and the distance between customers and distribution centre is far. Furthermore, with this the service level improved which means order fulfilment process improved too. In addition to this, the

The timing of capacity changes also needs to be taken into consideration to achieve maximum efficenty given that demands of their products varies with seasonal changes. The ability to react to market demand changes quickly will determine manufacturers flexibility in keeping up with these demands. Manufacturers needs facilities to produce, whether warehouses to store its raw materials or finished goods, or manufacturing plants to produce their products. Services facilities are needed by certain manufacturing industries such as consumer electronics to cater for returns. Distribution centres also determine the efficenty of production distribution and un-nesessary inventory holding will result in higher holding cost. Such facilities require large investments and are integral of the manufacturer’s supply chain strategy and thus proper planning is needed when making these decisions regardong the size, location which affect the overall operations. How manufacturers run their productions also determine how successful will they be in terms of productivity and quality levels. Different types of equipment and processes also affect the cost and output of the manufacturing plant. Information systems that flow both upstream and downstream affects the forecasting, planning, inventory and production levels, they must be robust to ensure the manufacturing firm is able to react accordingly to changing demands and variations. In addition to their internal environment,

This option requires a separated bonded warehouse facility, it is costly and very difficult to administer. Outsourcing this project can reduce initial investment costs, reduce operational costs and can be terminated easily. A logistic company will provide the warehouse, the manpower, the equipment and will be responsible for shipping the goods in and out.

Structube, a furniture retailer chain in Canada, has a number of demand regions which has to be completely satisfied. The management is considering ‘five locations’ to open distribution centers (DCs) in order to cater to the demand regions. The company wants to know the number and location of DCs in order to minimize overall costs (costs associated with opening a facility and transportation costs when shipping from DCs to demand regions.)

* Extend the value chain of the business so that the organisation’s information system can link with the information system of customers and suppliers. This should result in benefits and improved information flows

This case indicates that WoodSynergy Inc. is a midsize corporation in the fine woods supplier business, and the enterprise had lately launched Information technology based supply chain management schemes and was concerned in evaluating the development. They realized that efficiency can be improved by integrating information technology into their systems. They were capable of figuring out the importance of having information which is aligned with their business data. Enhanced data sharing would allow the company to meet order demand and deliver on time with the highest quality.

In the table the improvements only considering units shipped are highest among the letters A-D opposed to G-H. The A-D warehouses are respectively: Denver, Portland, Chicago, and Boston. The G-H warehouses are respectively: Atlanta, St. Louis, Los Angeles, and Fargo. The most impressive improvements in order from greatest to least considering shipping were for Denver, Portland, and Chicago. It is vital the company takes notice of Chicago 's improvement due to the larger volume it also held in 2012 than other warehouse locations. However, the question is comparing performance during the first five months of the years; thus, we need to look at the unit and cost analysis when comparing the shipments. Notice St. Louis cost per unit shipped is the only successful improvement. The cost for the first five months of 2012 was $9.97, that then lowered to $9.07 for the first five months of 2013. We find this information by taking the warehouse cost and dividing by the shipped units that year. For example $23,232 divided by 2,331 units makes $9.97 while caculating 2013 yeilds an improved $9.07. Other warehouses grew in cost per unit shipped during the 5 months when considering 2012 and 2013. Additionally, Denver was on strike and had 15 days

Delivery to a customer is a key component to retail business, whether online or in a store. Measuring delivery cost efficiency, the total cost of delivery from the stock(s) to the customers’ homes or to the desired store for pick-up is evaluated. The delivery cost is the key measurement for this metric. The

5. Proposed location of the new warehouse and transportation distances from the new location to each retail outlet/customer

Because the product was leaving the warehouse and getting to stores quicker, I was able to reduce the storage space which was an initial problem so the increase of costs because of it decreased. The stores showed a moderate increase in profit.

Locating a central distribution center will increase the control over inventory for Consolidated. Having small point of operations will reduce the amount of inventory that will be maintained at the sites. Each location will have different needs and only stocking the immediate customer needs at each location will reduce overall costs. The purchasing discount will be easier to maintain if all shipments come to one location which will also save the company money. Having a couple small vans deliver to regional locations within an hour is less costly than ordering extra just to meet the minimum purchase discount. The cost of shipping to small locations will be minimal and will save the company and customers money in the long term. If the contractors know of items that they will need for a job they can inform Consolidated and the special items can be delivered to the job site or picked up at the regional office. Communication is key and willing to provide the best service in a timely manner will reduce cost and increase profit.

Operating such dynamic distribution centers is usually very expensive and allows possibilities of product wastage. The high capital requirement to run such large distribution centers produces a natural barrier to entry and smaller firms frizzle out if they try and compete with the larger firms.

Define what the impact on inventory and warehouse cost would be? Fixed costs are generally a concern with warehousing. Many companies are streamlining their manufacturing and distribution network by consolidating and centralizing their logistics operations. (Ou, 2002) Warehouse consolidation is a key component of the logistics strategy. When the products are high in value and when transportation costs are insignificant compared to inventory and ordering cost, consolidation can be pursued with great enthusiasm. Also, outsourcing warehouse functions has proven to be a good idea when the product in question has a seasonal, cyclical, or uncertain sales nature. One recent example of manufacturing consolidation is Colgate-Palmolive establishing a new facility in Greenwood County. “Greenwood County had a building that was a perfect fit for our needs, offers us a talented workforce and excellent market access” said Mike Corbo, Vice President-Global Supply Chain, for Colgate-Palmolive. (Skipper, 2013) That “perfect fit” comes thanks to

The class text states that Supply chain management is frequently divided into supply chain planning applications, supply chain execution applications, logistics management, and warehouse management. Often when companies fail at implementing an efficient supply chain because of the planning section, or inaccurate demand forecasts. The text states electronic data interchange is one of the earliest uses of information technology for supply chain management, Electronic data interchange is the use of the Internet for everyday business transactions. “In this era of information a firm’s supply chain should operate at speed of thought and this is possible only by enhanced e-speed communications and information sharing with their critical partners.” (4)