QUESTION ONE: (20 MARKS)

Case Study

Emirates Enterprises, is a manufacturer of domestic appliances. In recent years, the company has faced more variability in consumer taste and competition from abroad. The company has gradually become associated with poor customer service and an inability to provide customers with goods advertised on its promotional fliers.

It is on record that it took several days before pallets arriving at the warehouse got logged onto the central tracking system. Investigations found instances where instead of a four-week supply, the firm was storing 26 weeks stocks. The small fluctuation in customer sales causes increasingly large fluctuation upstream resulting, in orders for suppliers not being fully filled. The company order fulfillment system had changed. The warehouse had no system for locating products to fulfill an order. The storekeeper was the only one who knew the location, and the only way to find out how much stock was in the warehouse was to count it.

A firm of consultants was called in. After several weeks of investigation, the firm presented their report. In the report, they suggested that the stock situation was a major problem. They pointed out that investment in stocks is at a very high level. However, the supply to production is very poor with frequent stock-outs of important components.

Required:

1. "Investment in stocks is at a very high level but supply to production is very poor with frequent stock out". Discuss the aspects that may have led to this situation (10 marks)

2. As a supply chain expert, draft FIVE performance metrics that can be used to assess the performance of Emirates Enterprises warehousing functions (10 marks)