In a previous analysis, it was determined that the primary problem affecting Company X’s Charleston copier rehabilitation facility is the sporadic delivery of large quantities of copiers from Company X’s network of distributors. This problem compounds problems further down the supply chain resulting in increased costs and lower employee morale throughout the Charleston facility. The purpose of this presentation is to address the questions and concerns of the key stakeholders in the Charleston project.
Joe Tinker, Plant Manager
Although five major issues are affecting the Charleston facility, the analysis indicates that the sporadic inflow of copiers has created the problems that exist further down the supply chain. Company X’s distributors are in the habit of waiting until their warehouses are full before shipping copiers to Charleston. The result of this behavior is unscheduled bursts of repair activity requiring increased plant personnel. There are two ways for Company X to operate their Charleston supply chain: outsourcing or vertical integration (Collier & Evans, 2008). At the moment, the delivery of copiers to the Charleston facility has been outsourced to the distributors. Since this arrangement has resulted in problems all along the supply chain, the only option left for Company X is to vertically integrate the pickup and delivery of copiers from distributors. Over the next several months, the shipping and receiving department of the Charleston facility must be expanded to include personnel and equipment necessary to handle what is essentially a small scale trucking operation. The benefit of this solution is a normalized influx of copiers that allows the entire Charleston facility to operate more efficiently.
Over the next six months, the Charleston facility needs to expand its shipping and receiving department to include the new trucking operation. Statistical analysis will determine how frequently each distributor should be visited and how many trucks will be necessary. Fortunately, Company X has kept detailed delivery information for the last two years. This information can be used by statisticians to determine useful metrics such as average annual copiers per distributor per year and average copiers per month or week (Triola, 2008). These statistics will help the shipping and receiving department schedule pickups in such a way that the inflow of copiers to the Charleston facility consistent over long periods of time.
Johnny Evers, Divisional Vice President
The importance of the divisional staff in the implementation of the new shipping operations at the Charleston facility cannot be understated. The facility will be adding additional equipment and personnel to enhance the existing shipping and receiving department. Unfortunately, the facility does not have the resources necessary to properly analyze the facility’s receiving history or design the schedule necessary for efficient operations. The divisional staff has access to these resources. Additionally, the divisional staff may have contacts within other Company X divisions that can assist in the formation of a shipping operation thanks to their existing experience in other industries. It is reasonable to believe that with divisional assistance the Charleston facility should have all distributors switched over to the Company X shipping operation within six months.
Frank Chance, The Boss
At first glance, the Charleston facility was being overwhelmed by a plethora of seemingly unrelated issues. As the research progressed through each department and its related problems, it became clear that each department was being overwhelmed by the inconsistent shipping schedules of the copier distributors. For example, this unpredictable workflow made it impossible for the inventory department to order the proper quantities of parts which led to the purchasing department double-checking ever order placed. The final analysis determined that integrating the shipping into the facility operations would result in a predictable workflow that would relieve most of the problems afflicting the facility. The real work in implementing this plan has yet to be done. That includes the statistical analysis necessary to determine shipping quantities and requirements, the hiring of personnel to handle the shipments, and the leasing of necessary equipment. The experience of the divisional staff will be invaluable during the planning phase of this project.
Frank Selee, The Boss’ Boss
The increased shipping operation at the Charleston facility is a radical solution for a major problem. Plant Manager Joe Tinker was originally skeptical of this solution. From his perspective, the increased complexity of plant operations due to the addition of personnel and equipment seemed to outweigh the benefits of normalized copier deliveries. Once he understood that sporadic copier deliveries were creating problems throughout the plan, he quickly changed his position on the solution. Johnny Evers, on the other hand, understood immediately that this was a situation where the control created by vertical integration would outperform outsourcing. Additionally, the inclusion of the divisional staff in the planning process bolstered his confidence in the potential for the project. Finally, there is a possibility that Evers could use this same solution in other situations, perhaps resulting in the development of a shipping operation for the entire company.
Collier, D. A., & Evans, J. R. (2009). OM 2008 edition. Mason, OH: South-Western.
Triola, M. F. (2008). Elementary statistics (10th ed.). Boston: Pearson.