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27 Logistics Case Studies

27 Logistics Case Studies

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27 Logistics Case Studies
27 Logistics Case Studies

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CASE STUDIES IN LOGISTICS
(Prof Parshuram - 26606780/26605814)
Case StudyNo. 1

Super Dolls is a toy manufacturing company which is in the business for the past two decades. The manufacturing unit is situated in Mumbai, while its sales and marketing are spread over a large geographical area, especially in the major cities across the country. Over the years, a number of competitors have sprung in the field. Far from child\u2019s play, the company found that the toys\u2019 sector is a tough business. Some of the problems faced by it are:

\u00d8There is a massive sale during the festival seasons. If the company\u2019s product is delayed, the valuable market is
missed.
\u00d8\u201cFashion\u201d or \u201ccult\u201dstatus products influence the market. Any wrong decision in this matter, means loss of sales
and build-up of unwanted inventory

\u00d8There are high marketing and promotional costs. If these programmes go out, the sales drop massively
\u00d8Anymisjudge of the market can also mean closing down of the company
\u00d8The company has problems regarding stock holding at its distribution centers. This is mainly due to wrong inputs

from feedbacks and improper surveys.
\u00d8The company relies mainly on hired fleet of road transport. The services are not up to the mark in terms of delivery
schedules, safety of goods from pilferage/theft, and mishandling of product.
\u00d8Marketing strategies are far from adequate. They are not effective enough to counter the strategies adopted by the
competitors.
You are called upon by the management of Super Dolls to head their logistics operations. You are required to study and
guide the company regarding the following matters.
a)
Warehousing at distribution centers and large retailers to cut down inventory costs plus other suggestions in order to
reduce inventory carrying costs
b)
Advantages of outsourcing in terms of preparing girls\u2019 and boys\u2019 toys, toys in local languages, toys for different age
ranges, packaging, effecting savings on damages/transport, responding fast to customers\u2019 requests, etc.
c)
Alternatives with regard to having own fleet of trucks
d)
How to cut down cost on advertisement campaigns by alternative forms of spreading awareness
e)
Suggestions to counter competitors\u2019 strategies
Case StudyNo. 2

The management of Yummy Noodles Company was contemplating on introducing 200 grams pack of savory noodles into the Indian market at Rs. 10 per pack. This was only for one month which was construed to be as a test marketing period. During this period, the Company wanted to have a \u201cblitz\u201d strategy of flooding the market with their product.

In the subsequent month, the management of Yummy Noodles Company had planned to raise the price of the pack to Rs. 15, while the weight of the pack was to be fixed at 250 grams. A free gift in the form of a plastic bowl with a spoon was also planned.

Two monthsbefore the launch of the actual production, the marketing department of the company brought out advertisements regarding the savory noodles. The advertisements were displayed on bill-boards, TV, radio, print media. Schools and colleges were also targeted to rope in students and children to buy the product.

Production of the noodles was planned to be started along with the marketing program. The forecast of the number of expected packets that could be sold for the first month was around 75,000, and 1,25,000 for the second month. The production was required to be startedearlier to meet the target of projected demand as well as to account for the changeover in the pack-size in the second month.

You are appointed as a logistics consultant by the Company. You are required to guide the Company regarding the following
a) The Company is very keen that its product must be well-received in the market. What coordination is required between the
production, marketing and other departments of the Company? (Note: You are required tospell-out the various
departments(namely, warehousing, production, quality control, packaging, etc.) that are expected to be required in the
Company)
b)Explain the role of the Logistics Department in the introductory phase.[Note: This pertains to Logistics Planning and
Process]
Page 2
Prof Parshuram 26606780/26605814
c) Highlight the necessity of information sharing between the various departments[Note: This relates to productivity increase
due to Logistics Process]
d) As a logistics consultant, you are required toforesee the type of difficulties which the company could face during the
changeover. Give suggestions to the Company to tide over these difficulties.
e) Critically examine the free gift scheme and marketing strategy adopted by the company
Case StudyNo. 3

Food Savories Limited is engaged in the manufacturing of various types of fast food items that are ready-to-eat variety. It has been in the business for the past 12 years. It has its factory as well as the processing unit in Navi Mumbai. The raw materials required are mainly vegetables, chicken which the company procures from either the local vendors, or from various suppliers situated at Nasik, Pune and other districts. The required materials are procured with the help of hired transporters. However, the hired transporters do not care much about the preservation of the goods. Hence, about 20% of the goods are lost due to damage, deterioration, pilferage, etc. Again, the hired transporters are unreliable with regard to their availability as well as prompt delivery schedules.

The company\u2019s products are quite popular with the customers who are situated in Mumbai, Navi Mumbai, Pune, etc. However, the company stands tolose the market due to erratic supply schedules which do not caterpromptly to the customers. The packaging of the products is attractive, but itdoes not preserve the product for a long time. The shelf-life is only about 5 hours, if the goods are not properly refrigerated. Loss on this account is about 10%.

The company has about 10 distribution centres. But there does not seem to be the muchcoordination between these centres. Logistical information system isnot adequate. Due to this, the company is unable toexpand its business. In fact, due to competition, there is fear that the company may stand to lose its existing clientele. Due to mismanagement, the company is unable to meet increase in the demands during festival seasons and holidays.

You are appointed as a logistics consultant. You are required to put forward your suggestions with regard to:
1. Setting-up of proper, effective logistical information system to improve coordination[Note: Discuss about Logistics as an
integrated process, ensuring proper planning]
2. Effective forecasting system to reduce inventory carrying cost, wastages, damages, pilferages[ Note: Forecasting can be in
terms of door-to-door surveys, questionnaires, telephonic interviews. For markets/stores that are close-by, think of JIT
strategies]
3. Setting-up of effective purchasing and distribution system[Note: Quality control with regard to purchases is required.
Prefer those suppliers who can supply goods in their own transport]
4. Improved system of storage, handling and packaging[Note: Study warehousing, material handling system and packaging.
Write/discus relevant points relating to the question.]
5. Alternative modes of transport to reduce/eliminate wastages[Note: Study has to be made regarding capital investment in

having own fleet of specialized trucks and related variable costs versus hiring specialized fleet of trucks. In case of hired trucks, agreement should be made with regard to compensation to be paid by the transport company in case goods are damaged/pilfered by them]

6. Ways and means to tackle and counter competitors\u2019 strategies[ Note: Analysis as to why competitors are having a \u201ccutting

edge\u201d. Improvement in the company\u2019s performance vis-\u00e0-vis performance in inbound logistics, processing, packaging, storage/warehousing, marketing/sales programmes. Quality and taste of the product may be altered to suit various sections of customers. Different sizes of packets to suit customers\u2019 budget]

Case StudyNo. 4

Shoppers\u2019 Paradise has a swanky mall at Andheri, Mumbai. They have a complete range ofwho\u2019s who of shopping items. It was shop-in-shop based on international standards. The shop area is nearly 3, 50,000 square feet and about 25,000 customers visit the mall daily.

Fierce competition has driven Shoppers\u2019 Paradise to tie-up with music companies, popular food outlets, etc. This ensures at
least a certain percentage of sales. Again, to ensure that no stock-outs take place, Shoppers\u2019 Paradise has built a warehouse
Page 3
Prof Parshuram 26606780/26605814
close to its mall. The warehouse has sufficient storage capacity. Based on the consumption patterns, the warehouse is
stocked with the required inventory.

Shoppers\u2019 Paradise basically targets higher income groups. Therefore, it prefers to use roadways for transport of goods from the vendors. Though expensive as compared to railways, roadways have advantages in terms of door-to-door delivery, quicker decisions regarding change in routes or change in delivery schedules, etc.

Shoppers\u2019 Paradise physically opens the packs received from the vendors. It sorts out the goods and puts the necessary price
tags on them. The goods are then repacked to be appropriately stacked for final delivery, as and when required.

Since noheavy inventory has to be transported, mechanized material handling is not used since it would involve heavy capital investment. Pallets and crates are used extensively. Again, when goods are returned by the customers due to defects, Shoppers\u2019 Paradise sends the goods to the warehouse from where the goods are sent back to the concerned vendor. The cost of return is borne by the vendors.

In case of new arrivals of stock, the sales department of Shoppers\u2019 Paradise puts bill-boards about the new stock early in the
morning, before the customers rive. This makes it convenient for the customers to know about the new arrivals.

Shoppers\u2019 Paradise is very keen to ensure that the customers get the right product at the right time. At the same time, the management of Shoppers\u2019 Paradise desires to reduce the overall cost. You are appointed as a Logistics Consultant. Suggest ways to improve the performance of Shoppers\u2019 Paradise.

Questions:
a)
Study and discuss the implications of logistics network design
b)
Discuss the modes of inventory sourcing
c)
Analyze the alternative modes of communication
d)
Study various in which Shoppers\u2019 Paradise can increase productivity
Case StudyNo. 5
(Mumbai Univ. Nov 2001)
M/s Britecolor Paints Ltd. (BPL) is a manufacturer of decorative paints for households, commercial premises and industrial
applications.
a)

M/s BPL has embarked on a policy of satisfying every possible customer in respect of shades, delivery and durability.
Thus, it went ahead and created twenty-five depots, one in almost every city. The manufacturing base was, however,
maintained in Pune. The factory received information in connection with stocks from depots once a week and there was no
intercommunication between the depots. Since they were in the competitive market, price was pre-determined, i.e., the
manufacturer had no liberty to price the product as per his own choice.

b)

In their enthusiasm and effort to satisfy their customers, M/s BPL strived to manufacture every possible shade by
combining various primary shades and would await the prospective customer to carry out the purchase. It ensured that these
shades were available at each and every depot even at the cost of transportation incurred in sending goods in less than full
truck load lots. This certainly provided a very high service level and the customers would get their shades as per their
desires and thus they were fully satisfied.

c)
While on one hand M/s BPL had a population of very highly satisfied, they had almost 50% of their total domestic sales
lying as finished goods inventory at various depots, on the other hand.
d)

Industrial paints, though not very customized, the respective industrial customer was quite satisfied. Consequently, the inventory of finished goods was very low in this segment. But, at the same time, realization was also lower due to stiff competition from other industrial paint manufacturers than the domestic market.

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