Analytics Exercise: Distribution Center Location
Grainger: Reengineering the China/U.S. Supply Chain
W. W. Grainger, Inc. is a leading supplier of maintenance, repair, and operating (MRO) products to businesses and institutions in the United States, Canada, and Mexico with an expanding presence in Japan, India, China and Panama. The company works with more than 3,000 suppliers and runs an extensive Website (http://www.grainger.com) where Grainger offers nearly 900,000 products. The products range from industrial adhesives used in manufacturing, to hand tools, janitorial supplies, lighting equipment, and power tools. When something is needed by one of their 1.8 million customers it is often needed quickly, so quick service and product
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It would then be directly stocked in the Kansas City distribution center and used to replenish the warehouses. They expect that very little would need to be shipped back to the Los Angeles warehouse after the new system was operating for about six months.
Grainger management feels that it may be possible to make this change, but they are not sure if it would actually save any money and whether it would be a good strategic change.
Specific Questions to Address in Your Analysis:
1. Relative to the U.S. distribution network, calculate the cost associated with running the existing system. Assume that 40 percent of the volume arrives in Seattle and 60 percent in Los Angeles and the port processing fee for federal processing at both locations is $5.00 per CBM. Assume that everything is transferred to the Kansas City distribution center by rail, where it is unloaded and quality checked. Assume that all volume is then transferred by truck to the nine existing warehouses in the United States.
2. Consider the idea of upgrading the Los Angeles warehouse to include a distribution center capable of processing all the volume coming into the United States. Assume that containers coming into Seattle would be inspected by federal officials (this needs to be done at all port locations) and then immediately shipped by rail in their
Innovations in transportation and telecommunications have introduced a number of opportunities for companies of all sizes and types to optimize their transportation networks. This paper provides a description concerning the design of a logistics network that consists of only one warehouse. A discussion concerning what steps will need to taken in order to design the optimal network is followed by a description of the information and data that is needed to make this determination. Finally, an assessment of the strategy will be employed in this network is followed by a summary of the research and important findings concerning these issues in the conclusion.
As I’ve explained to Cindy Lachin earlier today and as a potential solution to your travel concerns regarding our Frederick warehouse location, PSC can temporarily position upon request a pallet or two of your storage assets at our Wilkins site for your access convenience. In essence, service delivery changes to you are minimal with regard to the amount of notification required to prepare for your arrival (e.g., 1-2 days) and handling charges, which are $45.14 per hour per person x 0.5 hours of labor, for a total of
Answer- 5 Since Barbara’s firm make most of its purchases from Asia so it’s very important to manage and handle the physical movement of goods from Asia to all the individual stores in the U.S in order to reduce the risk of loss that might incur in between the movement of goods from Asia to U.S
In addition to the objectives stated above, management wished to evaluate an alternate mode and methods of transportation. The company could stop the use of the freezer cars for delivery up to Butte, Montana, and use trucking instead. The delivery to the retail outlets would also continue to be done by motor carrier. It was decided that if any changeover is economical for the company and the new system (if any at all) works well for Tender Most in 2011, in subsequent years, similar feasibility exercises could be carried out for other products. The cost for common-carriage TL transportation was estimated to be $12.60 per cwt. from Kentucky to Butte, MT (minimum load of 30,000 lbs.). The lead time for this option is 3 days with a standard deviation of ½ day.
W.W. Grainger, Inc. is a business-to-business distributor of products used to maintain, repair, and operate facilities across the globe. Institutions worldwide rely on Grainger for products such as safety equipment, janitorial supplies, valves, and various electrical components, along with services such as technical support and inventory management. These customers consist of industries including hospitality, manufacturing, healthcare, and government. (Grainger Company Snapshot, 2015)
As a result of declining flats volume, USPS Operations is performing capacity reviews of phase one sites in order to determine what impact the decline has on planned FSS deployments. The team has updated site-specific models with 2008 volume information to measure the impact. Though all deployed unit sites are sized appropriately, this due-diligence effort continues with a deeper analysis of trend and implementation data. There has been no decision on repositioning of any FSS units at this time but they are keeping their thumbs on the pulse of flats volume trends and have implemented quarterly reviews to ensure they have the right number of machines in the right locations. As the economy declines, so does mail volume. And that affects carrier routes. As part of USPS efforts to tighten costs across the organization, it is working to make route adjustments that reflect the current economic
Options for delivering product to customers can be done “In House” or provided by a 3rd party service provider. Currently Target enlists the services of Ryder trucking for the scheduling and dispatching of trucks from the Distributions Centers to the stores. Swift Trucking and Ruan Transportation provide the drivers and trucks that transport the trailers from the Distribution Centers to the stores. For the Fulfillment Centers, Target uses FedEx, UPS and the United States Postal Service. The problem posed in this paper is to determine the best way to get the product from the min fulfillment center to the customer in the most efficient way. Using the Linear Programing Model we can show costs for the distribution of customer packages from the various shipping options.
The management team has concluded that a new location in Shanghai would make the organization more competitive in the long run. The move would allow the company better access to key logistic networks and increase its distribution capacity throughout Asia and Europe. Therefore, a new Shanghai location project
Nevertheless, the company brainstormed a process to provide a more reliable and adequate space in its distribution center. In establishing a business partnership with Remstar International a golden idea formed. Remstar International took the well detailed information given and work studiously to provide an adequate storage and retrieval solution. In my opinion, the most vital step in the process was created when Aerial decided to run the performance test ahead of time. Giving all the tools required from the customer information on to the comprehensive space of each area made the distribution change remarkable. Creating a strong partnership with valuable information help change the distribution center, while lowering employee’s pickers from 28 a job to
I, Victor Alexander, have sourced the opportunity to invest in a 160,000 square distribution center, constructed in 2000, in Somerset, NJ. The property is extremely well placed, as it is in close proximity to New York City and Philadelphia, along Boston-Washington DC corridor, and located within 20 miles of 100,000 businesses that employ nearly one million people. The property offers 24’ clearance height, 40’ x 40’ column spacing, 24 loading/truck doors, and 220 parking spaces. The property is currently fully leased to three credit tenants, all of which have expressed an interest in renewing their leases as soon as they expire.
In the distribution section, I think that something very important has been forgotten. The transportation cost to transfer the bags from the manufacturer to
The costs that occur through the facility are warehouse expenses (excluding personnel) and facility/warehouse personnel expenses (excluding truck drivers). The total cost of processing cartons through the facility is $4,320,000.
Grainger supplies its business to a variety of businesses but sells primarily to industrial and commercial maintenance departments, contractors, and government customers. The company sells more 800,000 products so Grainger relies heavily on the use of more than 1,200 suppliers to fill this need. One interesting fact is that nearly 40% of their purchases are from random purchases from customers that rarely buy the same product more than once a year (Grainger 2006 Fact Book).
For decades airlines have turned to third party Maintenance Repair and Overhaul (MRO) facilities and contractors to take on the tasks of performing maintenance on their fleet of aircraft 's. But over the past few years, airline companies have been relying on these facilities more and more due to the supply and demand of air travel. Third party MRO’s provide a service of outsourced labor to perform maintenance on the aircraft’s, which allows airline companies to focus on other things. These MRO facilities specialize in a vast amount of maintenance, from basic line maintenance checks, all the way to nose-to-tail
The advancement in technology and imaginative techniques, the procedures and systems of how cargo is moved and handled is streamlined. Prior to containerization, moving freight from one location to another across the globe was a tedious practice and often took an extended amount of time. Manufacturers would use various configurations with dissimilar sizes and weights which led to additional time at each location being required to handle the different sized cargo. The use of intermodal containers has changed the shipping industry allowing for multiple modes of transportation to rapidly cross load the containers and mover the containers to the next destination. Implementing the use intermodal