log cs final

8/3/2019 Log CS Final

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ELEMENTS OF LOGISTICS MANAGEMENT

BOARD EXAM CASE

STUDY PROJECT

(2002, 2003)

TYBMS B

GROUP MEMBERS

NAME ROLL NUMBER

Macklin Dias 3508

Tiffany DLima 3509

Mark Dsilva 3510

Zenia Rodrigues 3541Sumona Shetty 3547

Poonam Singh 3548

Sneha Varghese 3549


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Elements of Logistics Management

CASE STUDY 2002

ABCL LTD.

A.FACTS: ABCL Ltd. is a leading fast food processing company. Operating centre at Thane. Procurement centresNashik, Pune, Aurangabad (Procurement of

Veg & Non-Veg raw materials is done locally as well as from Nashik,

Pune, & Aurangabad).

Distribution centres25 centres including Nashik, Pune, &Aurangabad.

10 years of experience in the fast food business. Tie-up with foreign firm operating in the same field. Good market in Mumbai, Pune & surrounding cities. Products are sold under the brand name Nasta. Popular with collegians & office-goers. Modern kitchen in New Mumbai. Raw materials are transported from procurement centres using hire

trucks.

Packaging is good & attractive.

NASHIK

AUBAD

THANE

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

D

PUNE


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Board Case Study (2002, 2003)

Quality & taste are the main reasons for popularity. 3 different packsParty, Family & Individual.

B.PROBLEM AREAS: Shortages, damages & decomposition during transportation: 10%-

15%

Inconsistency in transit time. Reliability of raw material transporters is low. Packaging is not long lasting. Taste & flavour is lost if not refrigerated for 8hrs at a time. Logistics information network is not good. Procurement centres do not communicate with each other. Lack of co-ordination leads to problems of stock, spoilage, theft,

wastage of raw material & finished goods.

Transportation & storage are the main culprits for losses. Entry ofmulti-nationals increases competition & pressure. Holidays, festivals, & college seasons puts pressure on demand &

supply; results in losses & mismanagement.

C.SOLUTIONS:ANSWER 1: Proper transportation policy to ensure minimum

transportation loss & reduction in the packaging costs.

Transportation of raw materials is the main problem. Reasons &

suggestions to resolve them:

Long distance transportation.Solution:


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Instead of procuring raw materials from far off places likeNashik, Pune, & Aurangabad, maximum raw materials can be

sourced from local vendors & suppliers near Thane.

A relationship can be established with local suppliers & try tonegotiate the prices (the reason for sourcing from far-off places

could be lower prices).

Transporters are not reliable.Solution:

Switch to more capable/reliable transporters Avoid outsourcing & arrange for its own transport fleet

Shortages, damages, decomposition of goods during transit.Solution:

Instead of spending on making packaging more attractive,channelize the funds in packaging the goods in airtight

containers & padding

Shortages & decomposition can be tackled using the P systeminstead of the Q system

Shortages can be met by maintaining buffer stocks Introduction of racks in trucks for storage of items such as eggs

during transportation will prevent damages & such losses

Inconsistency in transit time, which causes problems in forecastingstocks, & excess lead times.

Solution:

Transporters can be given a fixed period of time to deliver thegoods

Transporters can be charged fines for delays

ANSWER 2: Demand forecasting techniques.


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The company should conduct proper demand forecasting, in order topredict the times of high demand. This would enable the company to

plan efficiently in order to increase the supply during periods of high

demandsuch as holidays, festivals, etc.

In order to deal with the inventory shortage problems, the companyshould introduce an efficient communication system, & make use of

LIS, MIS, EDI, etc. The distribution centres must co-ordinate with

each other, in order to curb problems such as spoilage, stocks,

pilferage, wastage, etc.

The company can make use ofJIT II. The vendor can manage thequantities of goods required by the company. This would solve

inventory problems.

If the demand forecasting system is efficient, thehigh cost ofrefrigeration due to preservation of inventory at warehouses can be

avoided. For this, every distribution centres demand has to be

forecasted properly.

ANSWER 3: Suggestions for improved Purchase & Distribution policy.

During transit, the goods can be kept in atemperature controlledenvironment, so as to increase the shelf life.

Distribution centres mustcommunicate with each other in order toimprove distribution efficiency.

Introduce unit packaging at major centres. Suppliers located at far-off places can use their own means of

transport along with a surcharge. This would be cheaper that

conducting transportation on their own.


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Thedistribution centres must provide feedback to the major centres& the operating centre at Thane.

ANSWER 4: Yes, it is advisable for the company to have their own

dedicated transport fleet.

This would enable the company tocontrol the transit time. The company could then ensure that their trucks are equipped

with cold storage facilities.

The product, Nasta, loses its taste & flavour, if not refrigeratedfor 8 hrs. Hence, if the transit time is reduced, & refrigeration is

provided, theproduct will be preserved, thus reducing losses.

The company can decide thenumber of rounds of transportaccordingly.

Trucks can be used to carry goods to & from the procurementcentres. However, vans can be used for shorter distances.

Specific needs can be better fulfilled, if the company has its ownfleet.


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CASE STUDY 2003

M/S MODERN GARMENTS

A.FACTS: Manufacturers ofgarmentsfor ladies & gents. Advanced technology. Supply chain - purchase of raw material, stitching, packaging & final

supply.

Logistic function -key competitive element in market. Control of inbound, outbound logistics - affects inventories, reduces

losses from transit delays, improves response time & service

reliability.

Leader in the readymade shirt market segment. Joint venture withFrench company - to expand to trousers & t-shirts

market.

Old manufacturing unit at Thane. New manufacturing unit at Pune. Warehousing, raw material management, information networking

includes insignificant cost.

Post liberalization - mature market, better expectations, improvedtechnology & design.

B.PROBLEM AREAS: Several competitorswho have access to latest technology. Controlling inbound-outbound logistics-costly. All competitors have equally goodproducts. Product defects due to stitching, cutting, transportation are being

inspectedmore.

A lot of money is spent ondistribution. Garment variety leads tomore raw materials in stock.


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Traditional information system has become inadequate ( 500 outlets,50 transporters )

Lead time variabilitybuffer stocks with distributers. Transit time fluctuations- truck breakdowns, improper

documentation, & unfair vehicle overcharge.

Fleet management- bigger budget. Only garments withgood on-delivery quality are accepted. Prime concern for value addition to product- logistics distribution,

customer service & satisfaction.

Due to variations order fulfilment is important.

C.SOLUTIONS:ANSWER 1: Alternatives in transportation of Inbound & Outbound

materials.

Transit time delaysshould be avoided &damages duringtransportation should bereduced.

Documentation should be taken care of. The trucks should bemaintained ingood condition, in order toavoid breakdown of trucks,

this in turn will reduce transit time.

The company could opt for theirown fleet of transportfor outboundmaterial.

This will ensure:

oOn-time delivery of material

o Maintenance of trucks in good conditiono Documentation is done properlyo Elimination of unfair charging of vehicles, as the companies

will have their own vehicles

It is important for the company to take care of outbound & inboundlogistics as it will reduce losses due to transit delays. If response time

reduces & service reliability increases,customer satisfaction willincrease.


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The company should opt forpiggy-back transport in order to deliverthe goods to 500 retail outlets in minimum time.

ANSWER 2: Ways to reduce the cost of Inbound & Outbound

Logistic Functions.

The company should opt forjointly approved transporters with thesuppliers. Discussions should be held with suppliers so that the

transporters are accepted by both.

If inbound transporters are jointly decided,reliable & responsibletransporters will be selected, which will result in reduction of costs.

Outbound transportation can be resolved by the company opting fortheirown transportation fleet.

ANSWER 3: Major problems in performing Inbound & OutboundLogistic Functions.

Inbound logistics functions:

Keeping inventory. Losses due totransit delays. Improveresponse time so as to improve service reliability.

Outbound logistics functions:

Distribution Productdefects due to stitching, cutting, transportation. Lead time variabilitybuffer stocks with distributors. Transit time fluctuations. Order fulfilment.


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ANSWER 4: It is advisable for the company to maintain its own

transport system.

The company is currently facing a lot of problems in the currentoutsourcing of its transport function, such as:

o Product damageso Lead time variabilityo Transit time fluctuations due to truck breakdowns,

improper documentation, etc

o Unfair vehicle overchargeThe company can avoid the above problems if it is in control of its

transport function, instead of outsourcing it to unreliable outside parties.

The following are the advantages of the company managing its owntransport:

o Accessibility: The vehicles would be available wheneverrequired, even at short notice.

o Special requirements: The vehicles could incorporatespecial storage facilities that could required for specific

products.

o More control: The problems of improper documentation &overcharge would not occur. Also, if effective fleet

management is carried out, even breakdowns could be

avoided.

o Reliability: The company would be in control of the vehicleschedules as well as the drivers being hired. So, a stable

transit time can be estimated, thus eliminating the problem

of buffer stocks with vendors to deal with time variations.

Though it would initially be an expensive affair, it wouldbenefit thecompany in the long run.


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Railway services can be used to transport goods for longer distancese.g. from state to state, & trucks or vans can be used for movement of

goods for shorter distances e.g. within the state. This can help bring

down the overall transport cost.

Let one outlet per state act as a buffer stockist for all the outlets onthe vicinity. This can help avoid unnecessary long-distance

transportation, & can further reduce the overall transport cost.

ANSWER 5:

Since liberalization, the market has become more focused &consumer oriented, as the customer expectations have increased.

Hence, products can last in the market only if they are of good

quality. So, the quality of goods has to be maintained throughout the

logistics functions.

Care must be taken to maintain astandard quality of products.Defects, damages, etc must be avoided as much as possible.

Customers like to have a lot of choices and options. The companyalready has a good variety of designs as well as state-of-the-art

technology. It could maintain a lot ofvariety in terms of material,

designs, colour, etc. Also, these choices have to be available across the

500 retail outlets that the company possesses.

The company could research the differentpreferences of material,design, colour, etc. of customers across the country, & stock only the

preferred varieties should be made available in that particular area.

This could reduce the stock of goods lying idle with retailers.

The packaging should be attractive & should protect the clothes fromdust, humidity, etc. as well.

The presentation of goods at the outlets must be acceptable, so thatcustomers are aware of what is available.

Customers requiretrial of the garments to check the size. So, thecompany can have a standard set of sizes throughout their product

lines to avoid any grievances due to faulty sizes later. Also, instead of

opening up the packages at the outlet, one plain garment per design


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& size could be kept at hand in all the outlets. This will avoid possible

damage to the clothes during trial.

Customers must be given an exchange facility in case the goods thatthey purchased have any company defects that might have been

overlooked before purchase, viz. stitching defects, spoilage, tears, etc.

Also, customers should be allowed just one chance to exchange the

goods in case they find that they are not satisfied with the colour,

design or size of their purchases.

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