Individual Report $(80\%)$

Criteria Value Marks Comments

Executive Summary $5\%$

Introduction $5\%$

A review of capabilities of the technology

$$ Critical evaluation of the potential of new

technology

$$ Key advantages and disadvantages of the

proposed technology

$$ New developments in supply chain management

and its impact on the proposed system

$30\%$

$10\%$

$10\%$

$10\%$

Evaluation of different options

$$ List of possible options

$$ Comparison of advantages and disadvantages of

each option

$$ Rationale for selecting the proposed option

$25\%$

$10\%$

$10\%$

$5\%$

Discussion of possible implementation

problems

$$ Technology and process related challenges and

proposed solutions

$$ People related challenges and proposed solutions.

$20\%$

$10\%$

$10\%$

Report layout, quality of writing and

referencing

$10\%$

Conclusions and recommendations $5\%$

Total $100\%$

ELE$00086$H

Case Study: It was two months since Thalia had joined Logaltel, a third$-$party logistics$(3$PL$)$

provider owning and operating five large warehouse bases across United Kingdom $($each

hosting three to four warehouses$).$ As the new Chief Technology Officer, she had been asked

to make a recommendation to the executive board about the best way to invest in new

warehouse technology. Investment that potentially could fundamentally change both

operations and the image of the company. $$It was made clear to me that, while the senior

team very much supported investing in new technology, it did not want to take any

unnecessary risks to the ongoing service provided to our clients$($Thalia$).$

Logaltel delivered inventory management services for its clients, who operated in two types

of market. Around $80$ percent of the company$$s revenue came from the clients that served

business$-$to business$($B$2$B$)$ markets. These clients required Logatel to receive, store and ship

their products stored on pallets. The other $20$ per cent $($which was growing really fast$)$ came

from those same business clients that also served business$-$to$-$consumer$($B$2$C$)$ markets.

Instead of dealing in pallet loads, this service required Logaltel to pick$($assemble$)$ relatively

small orders $($sometimes containing just a few items or boxes$)$ that needed to be shipped

directly to end customers. The rapidly expanding B$2$C business had resulted in most local

warehousing managers assigning separate areas of each warehouse to process B$2$C orders,

although the majority of warehousing space was still assigned to serving B$2$B operations. The

increased complexity of B$2$C operations had also prompted the development of an upgrade to

the firm$$s warehouse management systems $($WMS$).$ This is the software system responsible

for planning the receiving, storage, picking and shipping operations, the first phase of which

had been introduced very recently. It had boosted the performance of both B$2$B and B$2$C

operations but had been a long and expensive development and implementation process.

New warehouse technology

Under consideration were various innovative technologies that had the potential to automate

Logaltel$$s currently predominantly$-$ manual operation for picking goods that used a

combination of forklifts, picking carts and staff to pick the items of an order. After a review

of available technologies, Thalia shortlisted her two preferred technologies, both involving

types of automated guided vehicles $($AGVs$).$ One technology was appropriate for B$2$B

operations and used driverless forklifts that could store, pick and move pallets around a

warehouse. These could easily operate in the existing warehousing setting, requiring only

minor modifications to a warehouse as they interfaced very well with common material$-$

handling systems $($storage shelves pallets, etc.$)$ often found in the industry.

The second technology was more suitable for automating B$2$C operations. This mobile

robotic fulfilment system enabled workers to avoid the time$-$consuming and costly activity of

walking around the warehouse collecting individual items for customer orders. Instead,

workers could stand in a predefined area while AGVs carried shelved full of items to them.

Although offering significant efficiencies, this technology would require a complete

restructuring of B$2$Cwarehouse areas because it fundamentally changed the way items were

stored and transported. Moreover, there were limitations in the size of items that could be

stored on the specialised shelves the AGVs moved around, meaning that traditional

operations had still to be used alongside automated ones for the technology to be practically

applicable.

Both technologies had the potential to significantly reduce labour costs and improved

productivity. According to Logaltel$$s Chief Financial Officer, both would give a financial

return well within the firm$$s minimum requirements based on expected growth projections.

The issue for Thalia was whether to recommend adopting both technologies immediately, or

start with implementing just one of them, a