Read the case study below and answer the question that follows MacLellan Rubber MacLellan Rubber processes raw rubber for industrial purposes into products such as bridge bearing blocks conveyor belts, tanker linings, tubing, and ducting. So years ago and perhaps optimistically the company took the opportunity to move into its current premises which are still rather larger than operational requirements demand. Arough ales have been badly increasing the company has been making losses for four of the last five years. Reacting to new competitors entering the market, the company has been trying to improve the service levels offered, and inventory levels have been stendly increasing Inventory control system Stock replenishment is authorised by other the store's warehouse foreman, the purchasing manager or the operation manager, whichever one of them happens to notice that inventory is low. A stock replenishment order can also be made by any employee who needs an tem that is not in stock Purchase orders are processed by the purchasing department and lead-time can vary from one day, for some of the spare parts for the processing machinery, to 10 to 12 weeks for the various grades of raw rubber. There were 2 536 diferent categories of parts.coms purchased in 2003, and records show that R9 160 000 was spent on 404 of those categories The layout of the store's Warehouse can be confusing to those unfamiliar with it. Parts toms are meant to be stored according to their nature, but because there is plenty of space and sometimes staff absenteeism, deliveriestrom any one supplier are ohen kept in one place rather than distributed to the COBUMS-222 - Take Home Defense Supo. Assament Block 2 2021 |VLO Page 8 of appropriate bins or racks. Products ready for sale are also kept in the warehouse, although again because space is not a problem, they are sometimes found in some comer of the factory floor However, when delivery is required, the shipping clerk generally knows the location of such finished goods. For ease of com.some low-value inventory for everyday use, such as nuts, bols, screws. and washers, is stored on the factory floor. There is the control of these items, but because of this shortages sometimes occur which can lead to significant downtime for the production runs Stock wthdrawal slips are made out for withdrawals from the warehouse, and computer records are updated daily. There is no supporting paperwork for use of inventory stored in the factory, Stock replenishment is made as much by physical inspection as by what the computer inventory information System flags up. The store's warehouse foreman generally knows what is and what is not in stock and stock-outs are now are occurrence A Mi inventory is taken at the end of each financial year, following which the stock records are adjusted or updated. These adjustments, including write-offs for obson, can amount to 5% of total inventory value Bank concerns In view of the increasing losses in recent years and the company's request to renegotiate its bank loan the bank is taking a much closer interest in MacLellan Rubber's operations Inventory control has been identified as an area of concern and you, as one of MacLelan Rubber's recently appointed graduate management trainees, have been asked to investigate this area and make recommendation, 2 torrent "The bank is taking a much closer interest in MacLelian Rubber's operations. Inventory control has been identified as an area of concern. You are appointed as the team leader of a group of management trainees to investigate this area and to make recommendations 6.1 Analyse the situation at MacLellan Rubber's operations and idently five inventory management challenges. Motivate your answer from the case study (10 Marks) 6.2 Consider warehousing and logistics information systems and set five objectives for addressing the challenges identified in Question 6.1. Make sure that you explain why there will be benefit in achieving these objectives (10 Marks) End of Section Case Study 2 30 Marks Question 6 Study the following case study and answer the questions below. Tool Shed - Warehouse management solutions. The Tool Shed was founded in 1971 as a small mom-and-pop repair shop fixing just about everything that was brought in, from furniture to home appliances. Over the years, they have increased their capacity and now offer repair service on dozens of products. In 2001, they opened an online store, which has gone on to become an integral part of their business. "We sell a wide variety of replacement parts to the public - we're not just repairmen," says Tool Shed IT Manager, Justin Du Toit. "Our inventory includes parts for washers, dryers, dishwashers, hair dryers, curling irons, shavers, razors, power wheels, power tools, lawn equipment, and the list goes on. We have an international customer base." For many years, Tool Shed used QuickBooks to run their online division, including their warehouse and shipping processes. Unfortunately, the software had not been able to keep up with the company's increasingly complex inventory needs. We were constantly fighting overages and shortages on inventory, which made customers upset when we had to put their orders on back order," DuToit notes. "We would also have inventory on the shelves and not on our website because there was no way to keep track of it. We had more work than we could keep up with." It was taking more than six hours per day to create purchase orders for all of their vendors. They had to pick each order individually, which took two hours per every 100 orders picked. Employees had to memorise where each item was stored in the warehouse. This led to long training periods (lasting up to three months) before employees became proficient in picking and processing orders. "Since we were picking each order individually, employees would be running from one end of the warehouse to the other to get the inventory to fill the order, "DuToit adds. This was not an efficient way to run a warehouse. The lack of inventory tracking also made it extremely difficult to find misplaced items, leading to a significant amount of unrecoverable inventory Recognising the limitations of Tool Shed's inventory management system. DuToit took it upon himself to find a replacement that would provide the features they desperately needed. "I hunted around for software for two months before I found One-Warehouse," he says. "After I found it. I used the 30-day free trial to test it in a non-production environment using real data." The results of his tests were more than he could have hoped for. One- Warehouse is the most popular inventory management software for QuickBooks' users because of its seamless integration with the accounting software. Because of this fact, DuToit could continue using QuickBooks for the company's accounting needs while adding many new inventory control features. In addition, he found One-Warehouse's management and order fulfilment functions to be beneficial to the company's operations. Tool Shed has been able to run leaner by making strategic cuts in inventory levels, none of which have had a negative impact on customer service. Indeed, some of these changes have allowed the company to vastly improve its customer service. Source: Case study: Fishbowl inventory management solution. [Online] Available at https://www.yumdu.comien document/read/34513473/case-stusty-fishbonlinventory, 2021. Accessed 15 February 20211 6.1 Tools Shed "have increased their capacity and now offer repair service on dozens of products." Use examples from the case study and illustrate the transformation process of Tool Shed in a table format. (7 Marks) 6.2 Explore the inventory management operations of Tool Shed and identify FOUR business challenges that they experience. Explain each challenge by referring to the case study. (8 Marks) 6.3 Investing in an inventory management system like One-Warehouse require careful consideration. Create a list of 3 criteria to determine the need for Tool Shed to acquire One- Warehouse system. Support your answer with an example from the case study. (6 Marks) Read the case study below and answer the question that follows MacLellan Rubber MacLellan Rubber processes raw rubber for industrial purposes into products such as bridge bearing blocks conveyor belts, tanker linings, tubing, and ducting. So years ago and perhaps optimistically the company took the opportunity to move into its current premises which are still rather larger than operational requirements demand. Arough ales have been badly increasing the company has been making losses for four of the last five years. Reacting to new competitors entering the market, the company has been trying to improve the service levels offered, and inventory levels have been stendly increasing Inventory control system Stock replenishment is authorised by other the store's warehouse foreman, the purchasing manager or the operation manager, whichever one of them happens to notice that inventory is low. A stock replenishment order can also be made by any employee who needs an tem that is not in stock Purchase orders are processed by the purchasing department and lead-time can vary from one day, for some of the spare parts for the processing machinery, to 10 to 12 weeks for the various grades of raw rubber. There were 2 536 diferent categories of parts.coms purchased in 2003, and records show that R9 160 000 was spent on 404 of those categories The layout of the store's Warehouse can be confusing to those unfamiliar with it. Parts toms are meant to be stored according to their nature, but because there is plenty of space and sometimes staff absenteeism, deliveriestrom any one supplier are ohen kept in one place rather than distributed to the COBUMS-222 - Take Home Defense Supo. Assament Block 2 2021 |VLO Page 8 of appropriate bins or racks. Products ready for sale are also kept in the warehouse, although again because space is not a problem, they are sometimes found in some comer of the factory floor However, when delivery is required, the shipping clerk generally knows the location of such finished goods. For ease of com.some low-value inventory for everyday use, such as nuts, bols, screws. and washers, is stored on the factory floor. There is the control of these items, but because of this shortages sometimes occur which can lead to significant downtime for the production runs Stock wthdrawal slips are made out for withdrawals from the warehouse, and computer records are updated daily. There is no supporting paperwork for use of inventory stored in the factory, Stock replenishment is made as much by physical inspection as by what the computer inventory information System flags up. The store's warehouse foreman generally knows what is and what is not in stock and stock-outs are now are occurrence A Mi inventory is taken at the end of each financial year, following which the stock records are adjusted or updated. These adjustments, including write-offs for obson, can amount to 5% of total inventory value Bank concerns In view of the increasing losses in recent years and the company's request to renegotiate its bank loan the bank is taking a much closer interest in MacLellan Rubber's operations Inventory control has been identified as an area of concern and you, as one of MacLelan Rubber's recently appointed graduate management trainees, have been asked to investigate this area and make recommendation, 2 torrent "The bank is taking a much closer interest in MacLelian Rubber's operations. Inventory control has been identified as an area of concern. You are appointed as the team leader of a group of management trainees to investigate this area and to make recommendations 6.1 Analyse the situation at MacLellan Rubber's operations and idently five inventory management challenges. Motivate your answer from the case study (10 Marks) 6.2 Consider warehousing and logistics information systems and set five objectives for addressing the challenges identified in Question 6.1. Make sure that you explain why there will be benefit in achieving these objectives (10 Marks) End of Section Case Study 2 30 Marks Question 6 Study the following case study and answer the questions below. Tool Shed - Warehouse management solutions. The Tool Shed was founded in 1971 as a small mom-and-pop repair shop fixing just about everything that was brought in, from furniture to home appliances. Over the years, they have increased their capacity and now offer repair service on dozens of products. In 2001, they opened an online store, which has gone on to become an integral part of their business. "We sell a wide variety of replacement parts to the public - we're not just repairmen," says Tool Shed IT Manager, Justin Du Toit. "Our inventory includes parts for washers, dryers, dishwashers, hair dryers, curling irons, shavers, razors, power wheels, power tools, lawn equipment, and the list goes on. We have an international customer base." For many years, Tool Shed used QuickBooks to run their online division, including their warehouse and shipping processes. Unfortunately, the software had not been able to keep up with the company's increasingly complex inventory needs. We were constantly fighting overages and shortages on inventory, which made customers upset when we had to put their orders on back order," DuToit notes. "We would also have inventory on the shelves and not on our website because there was no way to keep track of it. We had more work than we could keep up with." It was taking more than six hours per day to create purchase orders for all of their vendors. They had to pick each order individually, which took two hours per every 100 orders picked. Employees had to memorise where each item was stored in the warehouse. This led to long training periods (lasting up to three months) before employees became proficient in picking and processing orders. "Since we were picking each order individually, employees would be running from one end of the warehouse to the other to get the inventory to fill the order, "DuToit adds. This was not an efficient way to run a warehouse. The lack of inventory tracking also made it extremely difficult to find misplaced items, leading to a significant amount of unrecoverable inventory Recognising the limitations of Tool Shed's inventory management system. DuToit took it upon himself to find a replacement that would provide the features they desperately needed. "I hunted around for software for two months before I found One-Warehouse," he says. "After I found it. I used the 30-day free trial to test it in a non-production environment using real data." The results of his tests were more than he could have hoped for. One- Warehouse is the most popular inventory management software for QuickBooks' users because of its seamless integration with the accounting software. Because of this fact, DuToit could continue using QuickBooks for the company's accounting needs while adding many new inventory control features. In addition, he found One-Warehouse's management and order fulfilment functions to be beneficial to the company's operations. Tool Shed has been able to run leaner by making strategic cuts in inventory levels, none of which have had a negative impact on customer service. Indeed, some of these changes have allowed the company to vastly improve its customer service. Source: Case study: Fishbowl inventory management solution. [Online] Available at https://www.yumdu.comien document/read/34513473/case-stusty-fishbonlinventory, 2021. Accessed 15 February 20211 6.1 Tools Shed "have increased their capacity and now offer repair service on dozens of products." Use examples from the case study and illustrate the transformation process of Tool Shed in a table format. (7 Marks) 6.2 Explore the inventory management operations of Tool Shed and identify FOUR business challenges that they experience. Explain each challenge by referring to the case study. (8 Marks) 6.3 Investing in an inventory management system like One-Warehouse require careful consideration. Create a list of 3 criteria to determine the need for Tool Shed to acquire One- Warehouse system. Support your answer with an example from the case study. (6 Marks)