In This Course You Will Complete An Individual Project

In This Course You Will Complete One Individual Project Made Up Of Tw

In this course, you will complete one individual project made up of two parts. U3 IP 1A will be due in Unit 3 (this week), while U4 IP 1B will be due in Unit 4. For this part (Unit 3's IP 1A), you are working for a company that produces small and medium-sized coolers, primarily used for outdoor picnics. The company's current operations are centered on the East Coast, where all manufacturing and distribution are located. The company faces challenges in effectively reaching West Coast customers due to high freight costs caused by low product density, which increases shipping expenses.

To mitigate these issues, the marketing manager proposed freight equalization, aiming to match the shipping costs charged by competitors on the West Coast, regardless of geographic location. While this strategy somewhat improved competitive positioning, it also led to decreased profit margins because the company absorbs additional shipping costs, especially for less-than-truck-load shipments. The CEO has tasked you with evaluating three strategic options and providing a recommendation:

1. Continue shipping from the East Coast facility to the West Coast.

2. Contract a West Coast distribution center to ship full truckloads from the East Coast factory, using smaller shipments to final customers.

3. Establish both a manufacturing and distribution facility on the West Coast, despite raw materials still coming from the East Coast.

Your deliverables include analyzing these options in terms of operational flows and performance metrics.

Paper For Above instruction

Introduction (200 words)

The distribution challenges faced by the cooler manufacturing company highlight the complexities of supply chain management across geographic boundaries. The primary issue revolves around high freight costs for delivering products to West Coast customers due to the low density of the coolers, which increases shipping expenses. The company’s strategic responses include continuing the current practice of shipping from the East Coast, establishing a West Coast distribution center, or building manufacturing capabilities locally. Each option offers distinct advantages and disadvantages. Maintaining the current East Coast shipping model ensures operational simplicity and leverages existing infrastructure but results in higher transportation costs, potentially affecting competitiveness and profit margins. Establishing a West Coast distribution center could lower shipping costs and improve delivery timeliness, but requires significant investment and adds logistical complexity. Creating a West Coast manufacturing plant could optimize costs further and improve delivery speed, yet comes with substantial initial capital investment, supply chain risks owing to raw material sourcing, and operational challenges. The decision impacts cost efficiency, customer satisfaction, and overall competitiveness. Effective distribution strategies must weigh these factors carefully to sustain growth and profitability in a competitive market environment.

Manufacturing Operations Flows (300 words)

The production process for the coolers involves multiple sequential activities from raw material procurement to product delivery. Raw materials are sourced predominantly from suppliers on the East Coast, where the manufacturing facility is located. The initial step involves raw material acceptance, inspection, and inventory storage. Once materials are in stock, the fabrication processes commence, which typically include molding, assembly, and quality assurance testing, spanning approximately three to five days depending on order volume. Post-production, finished coolers are packaged and staged for shipment. If shipping from the East Coast, logistics involve consolidating shipments, scheduling truckloads, and dispatching to either the East Coast distribution center or directly to West Coast customers, with delivery times averaging around 7-10 days.

If a West Coast distribution facility is established, products are shipped in bulk from the East Coast to this central hub, which facility then manages smaller deliveries to final customers. This process involves additional inventory management, order picking, packaging, and last-mile delivery operations, typically taking 2-4 days. The risks associated with delays in any activity include missed delivery deadlines, increased customer dissatisfaction, loss of sales, and potential damage to brand reputation. Timely completion of each stage is crucial; delays at raw material procurement can halt production, while logistical delays in shipping or handling can lead to stockouts or late deliveries, severely impacting customer trust and operational costs.

Metrics to Assess Success (250 words)

Measuring performance through key metrics (KPIs) is essential to evaluate the effectiveness of the distribution strategy, optimize operations, and enhance customer satisfaction. Four specific metrics provide comprehensive insights: delivery lead time, order accuracy rate, shipping cost per unit, and customer satisfaction score. Delivery lead time tracks the duration from order receipt to customer delivery, highlighting logistical efficiency and responsiveness. Order accuracy rate measures the percentage of orders correctly fulfilled without errors, directly affecting customer trust and repeat business. Shipping cost per unit calculates the average transportation expense per product, helping assess cost-efficiency and identify potential savings. Customer satisfaction scores, derived from surveys or feedback, gauge overall service quality and customer loyalty.

These metrics should be measured consistently across all operational channels, utilizing data from logistics management systems, customer feedback platforms, and financial records. Sharing performance metrics with employees fosters transparency, motivation, and continuous improvement, creating a culture of accountability and excellence. Employees equipped with real-time data tend to make better operational decisions, aligning individual performance with organizational goals. Furthermore, benchmarking these KPIs over time enables the company to identify trends, adjust strategies dynamically, and maintain a competitive edge in the marketplace.

Analysis of subjective, qualitative factors, such as supplier relationships and brand reputation, alongside quantitative factors like shipping costs and delivery times, reveals that supplier reliability significantly influences raw material availability, affecting production schedules and costs. Conversely, customer perception and brand loyalty are driven by product quality and service consistency. Among these, supplier reliability stands out as the most critical factor for future demand assurance, given its direct impact on the production timeline and product availability. Fluctuations in raw material quality or supply can cause delays, increase costs, and ultimately affect customer satisfaction. Quantitatively, shipping cost per unit is vital for financial performance assessment, with higher costs reducing margins and competitiveness. Subjectively, brand reputation influences customer loyalty and market share, especially in a competitive outdoor product segment.

Therefore, the most pivotal qualitative factor is supplier reliability, as it directly determines the ability to meet demand consistently, while the most critical quantitative measure is shipping cost per unit, which impacts profitability. Future demand may be affected by varying raw material costs, technological innovations, and changing consumer preferences toward portable outdoor products. Economic factors, seasonal trends, and environmental considerations can also influence demand fluctuations. Maintaining flexible, resilient supply chains and adaptable strategies are essential for sustaining growth amid these variables, supported by research indicating inventory agility and supplier diversification as key to mitigating future risks (Christopher, 2016; Chopra & Meindl, 2016).

References

  • Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
  • Chopra, S., & Meindl, P. (2016). Supply chain management: Strategy, planning, and operation (6th ed.). Pearson.
  • Harrison, A., & van Hoek, R. (2011). Logistics management and strategy: Competing through the supply chain. Pearson Education.
  • Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management. Kogan Page Publishers.
  • Ballou, R. H. (2004). Business logistics/supply chain management. Pearson Education.
  • Mentzer, J. T. (2004). Fundamentals of supply chain management. CE courses.
  • Skjott-Larsen, T., et al. (2020). The future of logistics and supply chain management. Journal of Business Logistics.
  • Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2007). Designing and managing the supply chain: Concepts, strategies, and case studies. McGraw-Hill.
  • Gradisar, M., et al. (2020). Supply chain complexity and resilience during COVID-19. International Journal of Logistics Research and Applications.
  • Ketchen Jr, D. J., & Hult, G. T. M. (2015). Bridging organization theory and supply chain management. Journal of Business Logistics.

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