Vanity Products Company
1: The logistics service and cost constraints imposed on VP by the chain store’s latest demand. The latest request by the chain stores requires that every order should be delivered within five working days regardless of the ordered quantities. The fact that the new orders will be placed directly by the consumers through the EDI software means that they will not be consolidated and may be irregular on the choice of products. The company will experience an increase in the dispatch trips that might even need expansions in the delivery capacity and this will result into an increase in freight cost that will eat into the profits of the Vanity Products Company. Labor cost might also raise as more employee will be required along the supply chain from receiving the order to the concurrent delivery of the products.2: Opinion on Tom White’s proposal for establishing a series of distribution warehouses? The proposal to establish a series of distribution warehouse by tom white is the best solution for such an arrangement. If enough warehouses are located at the strategic locations that are close to the chain stores, the cycle time can be even reduced further to be less than five working days. With the distribution houses in place, the priority would be to always ensure that they are well stocked with the fast moving product and replenish their inventory records on time. Although Tom’s proposal might result into additional capital cost, it will be cheaper and efficient than delivering the orders direct from the production plants to the chain stores.3: Recommendations for the ownership and management structures of distribution warehouses? The logistics of maintaining the warehouses will be an additional challenging task to the Vanity products company. If they are not able to meet the orders for the various chain stores, it means that either their production plants are not operating to their capacity or the need of their products is high that their current production. The Vanity products company should concentrate on increasing their production capacity to meet the demand. For this reason, recommendation would be that they contract private and independent distributors who have the capacity to upscale their distribution services as the market rises.4: Roles that Information Technology might play in improving efficiency both internal and external to VP’s warehousing operations? When applied in the right manner, information technology improves the efficiency at all levels of production and distribution chain of the vanity products and reduce the cycle time by a significant margin. For the internal operations, Vanity Products Company should automate its production using the computer programs where applicable and leave the human capital to manage the machines. Automation in production will increase the productivity and help to act on orders on time. For the external operations, the computer programs should be used to synchronize the inventory records, orders and dispatches of all the distribution warehouses in order to achieve harmony in the supply chain.
