Contemporary Logistics 11th Edition, Chapter 9: Case 9.1. Please answer questions 5-7

5. Should AILS recommend that the manufacturing plant be located in Patna or Lucknow? Why? 6. Would your answer to Question 5 change if the shirts are exported through the Port of Kolkata? Why or why not? 7. Suppose that AAA decides to near-source production to Latin America. Keeping in mind the key stipulation pre- sented in the case, where might AAA locate its production plant in Latin America? Why? CASE Case 9.1 All-Indian Logistics Services All-Indian Logistics Services (AILS) is a third-party logistics provider headquartered in South Delhi, India. The company was founded by two former logistics exec- utives from Tata Steel (one of the biggest and oldest com- panies in India) whose expertise involves ocean shipping, customs clearance, forwarding, and land transportation. Over the last five years, AILS has been successful in building an infrastructure and pool of experienced per sonnel to handle a wide range of logistics activities, AILS considers itself a specialist in customized logistics solu- tions and services, and its services include the following: Import consolidation. AILS has a well-devel- oped network of offices and trade connections in the United States, Europe, the Far East, and the Middle East to render import consolidation by both air and sea to any part of India. It promises a personalized prompt service with value for cost. Door-to-door services. AILS is fully equipped to deliver door to door, which includes cargo pickup from the supplier's warehouse, warehousing prior to customs clearance, complete customs clearance of exports from overseas, and freight booking with airlines/shipping lines to receive cargo in India. It also undertakes local customs clearance and trans- portation to deliver to the door of the customer. Exports. AILS has expertise in handling exports of various kinds of cargo by ocean and by air freight and ensures the timely movement of cargo Part Ill. Elements of Logistics Systems related to import and export of cargo. India's red tape, bureaucracy, and corruption preclude any. one lacking either clout or established relationship channels from conducting business in India. at the most competitive rates. The company takes care of both the complete export documentation formalities and the physical movement of cargo. Consultancy on customs and logistics. AILS can guide customers regarding various modes of transportation and can help customers to opti- mize utilization of space and save on freight. It acts as liaison with different Indian authorities like the Reserve Bank of India (RBI), the Ministry of Shipping, the Ministry of Railways, the Ministry of Road Transport and Highways, and so forth on behalf of clients for various permissions and quotas Today AILS is handling an average of 200-plus TEUs (20-foot container equivalents) of imports and exports every month between Delhi and Mumbai (Bombay), which is the nearest big port (a distance of 1,407 kilometers). (See Exhibit 9.A.) Luckily, most containers are used for traffic in both directions mov. ing empties is unproductive. Main items for export are 0 0 India 200 400 KM 100 200 300 MILES CHINA Himachal Pradesh Haryana Dott Pradesh BHUTAN jau Uttar Pradesh Assam Nagaland BANGLADESH Manipur Mizoram At BURMA Kota Mumbai Bay of Bengal Bangor Chapter 9 . Facility Location 1 bathroom fittings and spares, machine spares and agri- existing relationships with logistics personnel at Mumbai cultural equipment, machine spares and chemicals, Port. With this considerations in mind, after several scientific equipment, medical equipment spares and months of arduous work AILS narrowed the plant loca- chemicals, food processing machinery, furniture and tion to two metropolitan areas, Patna (in the state of kitchen equipment, and interiors. Main items for import Bihar) and Lucknow in the state of Uttar Pradesh). are automobile engines and spares, cotton yarn, food products, electronics, televisions and components, rice, stone for stone crafting, and so on. Questions AILS has slowly expanded its consulting offer- 1. With respect to the natural resources needed to make ings to include site selection for manufacturing plants wickable shirts, is Patna or Lucknow the preferred loca- and warehousing facilities. Recently, AILS was retained tion? Why? on a site selection project by American Athletic Apparel 2. With respect to transportation considerations, is Patna or (AAA), a large multinational supplier of athletic clothing. Lucknow the preferred location? Why? AAA has asked AILS to determine the best location for a 3. With respect to labor characteristics, is Patna or Lucknow manufacturing plant that will produce wickable athletic the preferred location? Why? shirts for export to North American and Western Europe. 4. With respect to quality-of-life considerations, is Patna or AAA has placed one key stipulation on the chosen Lucknow the preferred location? Why? 5. Should AILS recommend that the manufacturing plant be site; more specifically, the manufacturing plant must be located in Patna or Lucknow? Why? located in a city with a population of between 1,500,000 6. Would your answer to Question 5 change if the shirts are and 3,500,000 residents, which excludes places like Delhi, exported through the Port of Kolkata? Why or why not? Mumbai, and Bangalore, among others. Because the 7. Suppose that AAA deci 7. Suppose that AAA decides to near-source production to majority of shirts will be exported from India via water Latin America, Keeping in mind the key stipulation pre- transportation (air freight may be utilized in extraordi sented in the case, where might AAA locate its production nary situations), AAA has agreed to let AILS leverage its plant in Latin America? Why