Transportation Case Study (20 marks)

Instructions

Throughout the course, you will submit three critical responses from the viewpoint of working for a subject company. This organization and the details of the case are fictitious but have been design to mimic industry and supplement your learnings by demonstrating your ability to think critically about situations and apply your course learnings. In each of the three submissions, you will be required to submit a response, most often in the form of a recommendation, supported by your course learnings.

Each response should be approximately 500 words per question and contain a brief introduction, your analysis and recommendation, and finally a short conclusion. You are not required to include a cover page, table of content, or executive summary however you are encouraged to include appendices of reference material where appropriate (i.e. computation tables or reference material not required in the discussion portion of your submission).

The Company

You have just been hired as the Director of Logistics for Eco Bottle (EB). In your new role, you will have responsibility for general logistical planning including functions such as inbound and outbound freight and any logistics-related functions within EB.

EB is a ten year old Canadian manufacturer of premium refillable water bottles. EB is located in Winnipeg Manitoba where their manufacturing facility, warehouse, and administrative offices are contained within a single building. EB employs seventy staff members, 35 of them dedicated to manufacturing, 15 to warehouse operations, and the remaining 25 in various administrative positions.

EB has positioned their product in the premium category and is enjoying year over year growth. Their primary product is a 750 ml refillable water bottle that is manufactured using two primary raw materials: stainless steel for the body of the bottle and high density plastic for the removable lid. EB has spent considerable effort on research and development and the bottle is considered to be industry leading in its ability to maintain both hot and cold temperatures.

75% of EBs sales are done through an online distributor called Skyway who maintains distribution centres in Calgary AB, Mississauga ON, and Montreal QC. Skyway specializes in selling athletic and outdoor goods direct to Canadian consumers and uses small package providers and couriers to provide a one or two-day delivery to most Canadian households. EB currently ships product over the road to Skyways distribution centres and if ordered in TL quantity, EB pays for the freight expense. When LTL quantities are ordered, EB charges the freight expense to Skyway. The remaining 25% of sales are done through a small group of boutique specialty stores across Canada that have requested the product specifically to stock. These sales are normally low volume and shipped via a small package or courier service to the boutique specialty store.

EB is aware that many of their boutique specialty stores would prefer to have EB direct ship their bottles to customers versus the boutique specialty store having to maintain inventory. Some boutique specialty stores have proposed an in-store display where customers could view the product, order it instore, and then have it delivered direct to the home from EBs facility in Winnipeg. Currently, EB only ships individual bottles when customers have warranty issues and they are sending a replacement bottle. EBs experience with this has been poor as the carton is lightweight cardboard and was only designed for in store presentation. Many of the individual bottles shipped under warranty repair are damaged before they arrive at their customer. When the bottles ship outbound they are packaged in a master carton that holds 30 bottles and then palletized. Under this system of using master carton and palletization, the units rarely are damaged.

You have been asked to prepare a preliminary report that would discuss the logistical impacts including general cost assumptions, transit time, internal process and administrative changes that would be required to support such an initiative.

Specifically, you have been asked to:

1. Highlight the logistical impacts of expanding a direct to consumer service (ie. cost, transit time, packaging);

2. Discuss the organizational impacts of a change in service (ie. internal processes, administrative changes).

Assignment:

Your response should be approximately 1,000 words and contain a brief introduction, your analysis and recommendation, and finally a conclusion.

You are not required to include a cover page, table of content, or executive summary, however you are encouraged to include appendices of reference material where appropriate (i.e. computation tables or reference material not required in the discussion portion of your submission).