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.
Unit 3 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?