SCM 6030 Strategic Project Management For Supply Chain Manag
Scm 6030 Strategic Project Management For Supply Chain Managementmod
Scm 6030 – Strategic Project Management for Supply Chain Management Module 1 – Case #1 (70 Pts) Turned in MS Word format via Canvas. Please see grading rubric below. You are the lead project manager for an outdoor sporting goods distribution company called Elite Sports Distribution (ESD) that has annual sales totally $270 million annually. Your company has ambitious plans and has 3 major initiatives cited below. The C-level executives believe that our distribution process must be improved.
Of these initiatives, ESD will select one of these projects by the end of the year, only giving 6 months to complete the project selected. Your assignment: 1) Using BOTH the Financial NPV (Use 5 years) and the Payback period, evaluate the best project from a financial standpoint. ESD desired Rate of Return is 15%. Target profit margin is 15%. All your financial work must be shown (can be copied/pasted from Excel).
If you feel any financial data is missing, you may add data, you must note which data and how you came up with that data. 2) Using the Multi-Weighted Scoring Model, put together Project Screen Matrix and select a minimum of 6 criteria and list your justification for the “weight†of each criteria item. (2 criteria must include “Strategic Fit & Corporate Core Competencyâ€). Complete the matrix for your 3 projects and evaluate the best project from a non-financial standpoint. For the weighted Model Score, you can make up numbers in the weight depending on how heavily you feel that items need rated (Remember there is no wrong answer). Example: if 2 of your categories are 1) Risk to future business 2) Administrative Challenge.
It’s fair to assume that risk to future business would be weighted heavier (an 8 for example) vs administrative challenge should be weighted less (a 3 for example). The risk to future business could bankrupt the company, vs, administrative challenge is something to consider, but doesn't put the company out of business. 3) Write an executive summary using the data from both the financial and non-financial criteria on your selection of which project should be completed and why. There is no requirement for number of pages and justification of your selection reasoning. Project #1 – Improve Shipping time Currently, 30% of your annual revenue comes from e-commerce direct from the ESD website, but we have found sales stalling this past year.
Several high-ranking executives in the company believe that the reason sales have stalled was due to our speed to ship for in stock items. It is believed by many in the company that we must compete with Amazon on service. Currently it takes us and average of 3 days before we have an items ready to ship via parcel courier such as UPS or FedEx Ground. A survey was done and if we improve the speed and can ship 100% of our in-stock items in the same day, our sales would increase by 20% annually for e-commerce shipments. Some work has been done, that it will cost us about $4,000,000 up front to improve from 3 days to 0 days (0 days meaning ship same day) to upgrade warehouse shipping systems and add automation to prepare items for shipping that quickly.
Some like this idea except for the fact it only focuses in our 30% of our business being e-commerce direct but that we need to focus on improving all of our sales segments. 4,000,000 / $270,000,000 .20 .15 (8,100,000) Project #2 – Add a New Distribution Center Currently we ship 100% of our volume from our 1 single distribution Center in Atlanta, GA. 30% of our sales are from e-commerce direct from the EDS website, the other 70% are wholesale and 3rd party resellers of our product that we ship direct to the locations they provide. While the facility has worked well, we would need to expand it in the next few years to keep up with demand. However, many high-ranking executives believe that we should add 2nd distribution center on the west coast to service the customers on a quicker basis.
If we added a new facility in Reno, NV, we would be able to get to 50% of our customers on the west coast 2-3 days faster. There are buildings available that we could be in by January 1 of next year. It would cost of $2,000,000 up front and incremental lease cost of $25,000 per month on a 5-year lease. There is no incremental operational cost since volume increases and cost structures are the same as Atlanta, GA. Based on a customer survey, it is believed that the improved service would increase sales by 10% annually if we added this new west coast distribution center.
Project #3 – Outsource All Distribution Services We have a proposal for a globally respected major 3rd Party logistics provider that has given an amazing proposal to let them take over all the logistics of distribution. Their proposal states that they can be up and running on January 1 and we will not miss a single shipment, it’s almost too good to be true from an operational standpoint. Their offer requires us to spread our inventory to 4 distribution centers around the country but does not require us to carry any more inventory that we currently do today. They have offered us $1,000,000 cash up front for any expenses we may have in shutting down our operation and moving inventory into their control.
Our analysis shows that would cover all our 1-time expenses with no money left. After the analysis they provided, we would reduce our logistics cost equal to 3% of sales, AND, they would ship same day plus shorter in-transit time resulting in sales increase for all our revenue by 9%. There is one caveat to this agreement, their contract would require that we allow “Assignment of this contract to another 3rd party without the consent of EDSâ€, meaning that if they bought, sold or company splits off, the service they are providing could be transferred to another company without our approval. While the opportunity to outsource maybe attractive, some members of the executive team fear we give up too much control of our business and could bankrupt the company if a new company would take over and service declines.
Case Study Rubric Criteria 14 points 11-13 points 7-10 points 0-6 points Completeness Complete in all respects; reflects all requirements Complete in most respects; reflects most requirements Incomplete in many respects; reflects few requirements Incomplete in most respects; does not reflect requirements Understanding Demonstrates a sophisticated understanding of the topic(s) and issue(s) Demonstrates an accomplished understanding of the topic(s) and issue(s) Demonstrates an acceptable understanding of the topic(s) and issue(s) Demonstrates an inadequate understanding of the topic(s) and issue(s) Analysis & evaluation Presents an insightful and thorough analysis of all issues identified; includes all necessary financial calculations Presents a thorough analysis of most issues identified; includes most necessary financial calculations Presents a superficial analysis of some of the issues identified; omits necessary financial calculations Presents an incomplete analysis of the issues identified Makes appropriate and powerful connections between the issues identified and the strategic concepts studied in the reading; demonstrates complete command of the strategic concepts and analytical tools studied Makes appropriate connections between the issues identified and the strategic concepts studied in the reading; demonstrates good command of the strategic concepts and analytical tools studied Makes appropriate but somewhat vague connections between the issues and concepts studied in the reading; demonstrates limited command of the strategic concepts and analytical tools studied Makes little or no connection between the issues identified and the strategic concepts studied in the reading Supports diagnosis and opinions with strong arguments and evidence; presents a balanced and critical view; interpretation is both reasonable and objective Supports diagnosis and opinions with reasons and evidence; presents a fairly balanced view; interpretation is both reasonable and objective Supports diagnosis and opinions with limited reasons and evidence; presents a somewhat one-sided argument Supports diagnosis and opinions with few reasons and little evidence; argument is one-sided and not objective Presents detailed, realistic, and appropriate recommendations clearly supported by the information presented and concepts from the reading Presents specific, realistic, and appropriate recommendations supported by the information presented and concepts from the reading Presents realistic or appropriate recommendations supported by the information presented and concepts from the reading Presents realistic or appropriate recommendations with little, if any, support from the information presented and concepts from the reading Research Supplements case study with relevant and extensive research into the present situation of the company; clearly and thoroughly documents all sources of information Supplements case study with relevant research into the present situation of the company; documents all sources of information Supplements case study with limited research into the present situation of the company; provides limited documentation of sources consulted Supplements case study, if at all, with incomplete research and documentation Writing mechanics Writing demonstrates a sophisticated clarity, conciseness, and correctness; includes thorough details and relevant data and information; extremely well-organized Writing is accomplished in terms of clarity and conciseness and contains only a few errors; includes sufficient details and relevant data and information; well-organized Writing lacks clarity or conciseness and contains numerous errors; gives insufficient detail and relevant data and information; lacks organization Writing is unfocused, rambling, or contains serious errors; lacks detail and relevant data and information; poorly organized