managerial issues in logistics

MGT5052-IU-SP2018 case3 overview & supply chain – BETA

MGT5062-IU-SP2018 Logistics Policy

Case number 3 WORKING (BETA)

Overview of Logistics and Supply Chain

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Individual work.

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How submitted.

*** Post your answer to the Canvas assignment box. Do NOT send to the rest of the class.

*** Your answers are due according to the class schedule & the policy on self-selected late submissions.

It is usually possible to include ALL your answers in one file. That includes the memo.

*** Be sure to label each answer with the correct question number (or otherwise indicate which question is being answered) so that the CEO (or other reader such as the grader!) can easily find the answer.

*** For essay- or narrative-type questions use MS Word or compatible. There is usually no need to go to a universal format such as PDF. But you can use PDF if you desire with no penalty.

*** Be sure to show your work. For more complex calculations you can use Excel or compatible; or manual and scan the pages into your answer file. Just be sure that the CEO or other reader can find and interpret the answers.

You can use basically any file name that you want EXCEPT please include your last name (a) somewhere in the file name; and (b) at the top of the first page inside each file. That helps me identify whose work I am looking at grading, etc.

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Copyright 2018 as adapted. Dr. Paul Battaglia and Florida Institute of Technology for use ONLY in MGT5062-IU-SP18 for the Virtual Site. Other use requires explicit written permission.

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Note: As noted earlier, the basic LUML scenario is used throughout the course for the cases. Additional information is provided for each case as needed.

There are THREE parts to this case.

Be sure to submit the answers for ALL THREE parts!

Case 3

Light Up My Light, Inc.

The basic scenario for LUML continues.

Case 3, Part 1 (Warehouse/shipping performance)

During the last weekly review, the CEO (still Elise Ennis) expressed some concerns about the warehousing operations. She has no real feel for the efficiency of the warehouses. The operations “strike her” as being somewhat expensive. And her impression is that “the cost for each warehouse is sort of all over the place.”

The CEO asked if it would be possible to do a quick analysis of the warehousing function. [Of course, that was a rhetorical question. As you might expect, the answer from Tom Perkins the VP/head of logistics was “sure we can do an analysis for you”.]

The CEO said that she would send over some more specific questions after the meeting.

As a logistician for the company you are to play a key role in doing the analysis and reporting the results to the CEO.

In preparation for the analysis you asked the Comptroller for some financial information. The Comptroller provided the financial statements (income statement & balance sheet) for 2017, the most recent complete year. These are attached.

You also asked the VP who oversees warehousing operations for some data. The manager of warehouse operations sent over the most recent data that was available. The VP explained that LUML has been using the number of shipments as a key metric for warehousing. No distinction is made between an incoming shipment or an outgoing shipment. They believe that the work effort for either type of shipment is about the same. The shipment information is also attached.

You ask if there is any other information that you should know — any peculiarities of warehousing operations for LUML? The VP mentions a few things that he says are not so obvious.

#1. The Melbourne warehouse is co-located with the Melbourne manufacturing plant & the company’s headquarters.

#2. All manufacturing is done in-house in Melbourne.

#3. All the warehousing facilities are in leased buildings (including the one in Melbourne). So that aspect is standard for all 8 warehouses.

#4. The Melbourne facility is “company operated”. As the original warehouse, the warehouse staff are all employees of LUML.

#5. As the need arouse for other warehouses/shipping centers, the VP at that time decided to try what was then a relatively new concept. The work at these other sites was contracted out to local operators at each site. The contractors follow basic LUML policies, etc. These operations are what was to become known as 3PL (third party logistics). [Note: If you want to read more on 3PL in our book, then check in the index. However, for this case all that you basically need to realize is that these warehouses are each operated by a separate local operator under contract to LUML.]

#6. Shipments tend to be relatively homogeneous over all the sites. A typical shipment has one to three fixtures. Even the shipments from Melbourne fit this model because of the specialty nature of most of the fixtures.

#7. As might be expected, most shipments form Melbourne are outgoing to customers or to the other warehouses.

You thank the VP and head back to your office.

When you arrive, you find a note on your desk from Tom Perkins. This is forwarding the questions that the CEO had promised to send over.

REMEMBER THAT THERE ARE OTHER GRADED ELEMENTS THAT ARE NOT SEPARATELY LISTED (e.g., on time; format and completeness; purpose).

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Your mission? Prepare a memo to the CEO with the answers to her questions. Remember that you also need to send your supporting analysis. The material should be organized as you would send to a senior official. And you should also be sure to cite any material used that is not your own.

The reason that we do this type of analysis is to help manage better, to solve problems, and the like. Interpreting the information in relation to the business situation is important.

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Keep in mind

#1 the answer to each question needs to be easily identifiable. The CEO is almost certainly not going to remember the details of each question that she asked. There is at least a week between the question being asked and reply expected. And she is unlikely to “go looking” for the answer somewhere in a document. [On the other side of the coin, for your purposes, you want to make sure that you answered each of the questions.]

#2 in most cases the CEO has asked you to explain your answers. So, each answer needs to have the answer plus the supporting rationale. However, that does not mean that each answer/explanation needs to be pages long! Some of the backup work might be a bit lengthy, but most of it is very brief. The answer itself and the rationale will usually only be a couple of sentences.

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Here is the information that you asked for. We have been using the number of shipments as a basic metric. That seems to have served us well over the years. At first blush, given the CEO’s questions and areas of interest, you may need to revise the metric being used.

Note z: In March 2016, the warehouse was closed for two weeks due to a strike.

Case 3, Part 2

(100 points) Given the analysis and results in part 1, how might the issues raised tie in with the various organizational and managerial issues in logistics?

You should be able to write a great deal about this. But I am targeting for very nice coverage in about 2 single spaced pages. Sometimes tables or figures can help, but they do need some basic explanation.