LOGISTICS MANAGEMENT
Order ID:89JHGSJE83839 | Style: APA/MLA/Harvard/Chicago | Pages:5-10 |
Instructions:
LOGISTICS MANAGEMENT
Scenario A Feets Introduction Feets is a chain of retail athletic wear stores. The company headquarters is located in Sacramento, California, near the western warehouse. There are seven geographically dispersed warehouses to serve the needs of Feets’ 400 stores. Tedra Grav, supply chain vice president, had this to say about the Fashion Squared store, a new location in Sacramento. “The product mix in the Fashion Squared store is new to Feets. There are many new products and many new vendors. Our western distribution center is set up to serve the set of stores in California. It was not set up for all these new products and new vendors. This has caused us problems because of the small quantities of some of these new products, which are not used in any other store. All of this may cause us problems in the upcoming summer sports season. I have informed the rest of the management team of the nature of these problems.” Third-Party Logistics Feets uses third-party logistics firms to move the goods from warehouse to store. With the exception of the Fashion Squared store’s daily shipments, the stores receive orders twice weekly. Feets uses a small package carrier to make transshipments between stores. Tedra feels efficiency as opposed to responsiveness in the Feets supply chain is important. As is common in retailing, buyers forecast trends, determine how those trends affect demand at the stores, and order from vendors accordingly. Efficiency is important, so vendors ship large quantities to the Feets warehouse relatively infrequently. The warehouse has a computer program to help team members determine where to store these large quantities of goods as they are received. Buyers A buyer specializes in one or more departments depending upon volume, allowing the buyer to be familiar with the products. This allows for better identification of customer demand and utilization of supplier’s manufacturing practice knowledge. Feets’ business is very fashion oriented. Each year, 80% percent of the product that comes into the distribution center is new. Even if the product is very similar to one ordered last year, it is considered new. Customers demand new colors and styles; product is normally not replenished. Instead, a particular item is purchased, distributed to the retail stores, and sold. As a result, determining the amount to be purchased can be difficult. The buyers can look at how a similar product sold last year. However, that may be misleading due to changes in taste. The normal lead time quoted by a supplier is 6 months even though it only takes 2 to 3 months for the company to produce the product. The buyer is faced with anticipating what will be in demand 6 to 12 months into the future. These difficulties are compounded by the life of a new style being less than 6 months. The buyers determine the order quantity from forecasts of demand done at the store level. The historical distribution of sizes sold at each store is part of the calculation and then adjusted by projections made by each store. The supplier collects orders for all stores at one time. If too many items are ordered, then the result is to discount the item at an outlet store for discontinued styles. If too few items are ordered, there is no chance to reorder. When orders arrive from the supplier, the majority of the product is immediately shipped to the store. The amount distributed is calculated from the original order with adjustments made for store
closings and new openings. The remaining order, about 40%, is stored in the warehouse to be used for replenishment. Inventory Replenishment Feets has an automated replenishment ordering system. The way this works is that the computer at the distribution center collects data from each store about what was sold that day. There are two systems for collecting the data. Some stores have a high-speed Internet connection and transmit sales data in near real time. Other stores have only dial-up connections and transmit their data once per day. Once the data have been collected, the computer calculates the amount of inventory in each store by SKU. That inventory level is compared against predetermined minimums, and any replenishment is placed in an order. Because the buyers place just one order for any particular style during the course of a season, available stock for replenishment is limited. Consequently, when inventory on that item is exhausted, no more replacements can be done. At this point, transshipments between stores help Feets meet the demands of its customers. Feet has a few stores that are outlet stores. These stores do not sell the full Feets line. At the end of an SKU’s life (when there are very few items left in inventory), the inventory is sent to these stores to be sold at substantial discounts. The Need for Inventory Accuracy In general, inventory records need to be accurate. In the Feet’s distribution chain, inaccurate inventories would cause stockouts. That is, if the central computer had an inventory record for a particular SKU that was too high, it would not order replenishment. In the warehouse, a stock picker will pick up an order for a store, pick the items on the order, put those items in cartons, and put the cartons on a pallet. Human error plays a role in what a store receives for each shipment. Sometimes the wrong items are put in the carton, sometimes the wrong cartons are put on a pallet, and sometimes the wrong pallet is put on the truck. Therefore, those stocking the store must carefully check orders. The Feet’s auditor requires the company to take a complete physical inventory including the stores and the distribution center twice a year. A company specializing in inventory auditing performs store inventory. The same outside company also counts the distribution center quarterly. Performance Measures In retail companies, the two most useful metrics are inventory turns and stockouts. The Feet’s inventory turn ratio currently runs at about two. Feets uses its centralized computer to calculate stockouts. Tedra feels that the current stockout level of 5% is a little high but to be expected.
LOGISTICS MANAGEMENT
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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