Use the below article to for the questions

1. Using the BlueStar Case Study to develop a recommendation for the company's data strategy relating to its current problems, as well as how you think the logistics operations should be measured.

1. Include an assessment of the Metrics and KPIs which you believe are required to support daily operation, answer Ms. Powell's questions, and be able to ID potential problems for DMAIC projects.

NOTE: This will require you to consider the strategic DMAIC thinking on the Data Strategy.

BlueStar Office Supply Company

BlueStar is a well established office supply company with annual revenue of $950M.

The company sources, manufactures, and markets a variety of products ranging from paper

clips to file folders. BlueStar serves thousands of customer locations throughout the United

States and Canada. The company supplies numerous items to major retailers, distributors,

wholesalers, small business owners, and consumers. Key customer accounts include major

retailers like OfficeMax, Office Depot, and Walmart. In addition to these large retailers,

BlueStar also sells directly to commercial accounts for companies like IBM, Toyota, and Boeing.

If an individual works in any type of office environment, he likely uses BlueStar products on a

daily basis.

Supply Chain Status

Although BlueStar has popular products and a large market share, there have been a

growing number of problems with BlueStar's supply chain. Customer service levels have been

dropping and costs have been increasing. As a result, corporate sales have stagnated and

product margins have steadily declined. This poor financial performance has the executive

leadership team very concerned about the BlueStar supply chain. In order to address these

problems, the company has hired Katherine Powell as the new Executive Vice President of

Supply Chain Management. She has been challenged to dramatically improve the BlueStar

supply chain and return the company to a leadership position in the industry. The CEO and

board members want to see both immediate and long term improvement. Therefore,

Katherine is feeling the pressure to quickly deliver tangible results.

Katherine was formally trained as an undergraduate in Industrial Engineering at the

Georgia Institute of Technology and received her MBA from Stanford University with a

concentration in Operations Management. She has held leadership positions in several leading

consulting firms and helped numerous corporate clients improve their operations capabilities.

With this type of background, Katherine has successfully worked in a number of production and

distribution facilities throughout the world and established a reputation as a thought leader in

manufacturing strategy. Given her personal expertise, Katherine would like to focus her efforts

on improving BlueStar's production facilities and regional distribution centers. However, she

also thinks there are tremendous opportunities for improvement in her transportation group.

Transportation Opportunities

In your initial meeting, Katherine explained why transportation is such an important

component of the BlueStar supply chain. From a product cost perspective, transportation

represents a relatively large percentage of the total landed cost due to the low value and high

density nature of many office products (i.e., file folders). Another issue that exacerbates the

relatively high transportation costs of BlueStar products is fuel prices. In the current

environment where fuel surcharges from carriers must be accepted, the percentage of product

costs associated with transportation expenditures continues to rise. In fact, transportation

costs now account for over 30% of product costs at BlueStar. If transportation costs are not

significantly reduced, then BlueStar products will not remain price competitive in the

marketplace and sales will decline. Therefore, transportation cost reduction is a key priority for

the company.

Given the increased corporate scrutiny on transportation costs, the BlueStar

transportation group attempted to reduce costs over the past year. The transportation group

decided to move away from established core carrier relationships and long term contracts.

Instead, BlueStar placed every single load on every single lane up for bid. This change was

designed to ensure carriers were offering the best price possible on every shipment.

Unfortunately, this open bidding process did not have the desired effects and it caused several

additional problems. By moving away from utilizing their traditional core carriers and placing

all loads up for bid,

BlueStar awarded some business to new carriers that did not understand the service

requirements for key customers. This lack of understanding and customer focus resulted in late

shipments, extended delivery times, and dissatisfied customers. The problem was made worse

because customers sometimes received loads from different carriers on each shipment.

Therefore, the opportunity to collaborate and develop a good working relationship was limited.

As these service issues continued, BlueStar sales began to stagnate and key customers began to

evaluate other office products suppliers.

In addition to the customer service problems, last year's change to an open bidding

process also resulted in price increases from most of the old core carriers. Apparently, the

carriers were unable to plan for demand on established lanes and unable to efficiently stage

equipment as needed. In order to pick up BlueStar loads, some carriers had to dramatically

increase their empty miles and incur additional costs. Plus, by spreading loads around to

numerous carriers, economies of scale were lost. Without sufficient volume, the traditional

core carriers were simply unable to offer their normal prices.

Transportation Strategy Development

Once she assumed her new role at BlueStar, Katherine Powell set up meetings with each

key area in the supply chain. She wanted to understand the challenges each functional area

faced and learn more about their approach to problem solving. Although all areas of the supply

chain appeared to have opportunities to improve, it was clear that the BlueStar transportation

group needed outside expertise and direction. Katherine was not impressed in her initial

meetings with the managers in the BlueStar transportation group. She was frustrated and

complained that:

"No one can even give me a basic summary of the business or typical metrics that a good

transportation manager should know. They cannot tell me high level things like how much we

spend each year, where we spend our money, who are our top carriers, where we ship most of

our freight, what modes we use, etc. At a more tactical level, they don't know basic things like

what is the average length of haul or average shipment weight for each mode of transportation.

If they cannot tell me these kinds of simple things, I hate to think about how much money we

are wasting and how much risk we have in critical areas."

Based on her lack of confidence in the internal transportation group, Katherine

contacted your school for help and is looking for your team to analyze and synthesize some of

the BlueStar freight payment data in order to develop a revised transportation strategy. At a

minimum, she wants summary information about overall transportation spending, basic metrics

for each mode of transportation, cost savings opportunities, and risk assessments. In

her closing remarks to your group she said:

"Let me make this simple. Tell me what I need to know, tell me what I need to do, and

tell me what we can improve. I need to reduce costs and improve service. Give me

tangible, data driven recommendations that are actionable."