Case study Of Fairview Distribution Centre †MyAssignmenthelp.com

Question: Discuss about the Case study Of Fairview Distribution Centre. Answer: Introduction Supply Chain and Logistics Management forms one of the most integral parts of any business organization whereby the company manages its resources and sees to it that all the resources are utilized effectively and the organization incurs the minimum amount of cost. In the given report, such a case relating to the Fairview School Board has been presented (Christopher, 2016). The company presently holds a distribution center whereby it distributes all the stationery to the different organizations from one center. This has led to extremely high costs for the company and hence, it has been advised to give away the distribution centre and manage on its own. The given case explores all available ideas and then roots for one of them. Brief overview of the distribution scenario At the distribution center, an area of 30000 square foot was used which has to purposes. Various school`s inventories were kept at the warehouse for the supply given to the schools. This stock included office supplies, papers and other stationery items. Such a large stock was kept in order to see to it that the bulk purchases could be made which would lead to decreased costs and also balance the lead time in case of deliveries (Islam et al., 2013). The inventory levels fluctuated to a great extent throughout the year. At the warehouse, various equipment of the board house was also kept which consisted of special teaching supplies and could be loaned by the various schools on different time period basis (Wang et al., 2016). The delivery system of the board was also taken care of by the authorities in the distribution centre which comprised of an interdepartmental mail, supplies and other educational services. The deliveries were made to various schools and offices as and when required . Brief overview of giving away the distribution scenario Jim Knoxs Plan According to Jim Knox, that the board had forecasted certain deficits and thus, certain adjustments had to be made to various units in order to overcome the deficit problem. He suggested that along with giving away early retirement to various staffs and cuts, the distribution centre could be done away with (Mangan, Lalwani Lalwani, 2016). The schools should be allowed to handle their own supplies and the center could be sold away along with selling the vehicles owned. The reason why closing the distribution centre was taken in as a more attractive than cutting down other program budgets was because the schools could manage their supplies on their own. According to him salaries of around $500000 would be saved if the distribution centre was given away. Along with the same rent could also be saved. Alternate ideas The alternative option to the given scenarios cold is as follows: The distribution centre is a huge warehouse where all the equipment fit in adequately. Hence, due to this the area of the distribution centre could be reduced considerably and the entire excess inventory could somehow be reduced by keeping lower levels of stock (Stadtler, 2015).When the case comes up of the discounts which would be received then, the purchase of stocks can be made at once but the delivery can be made later. Adding to this, the staff could work on rotational basis and the teachers could also contribute some of their help in order to manage the supplies. Various other adjustments could be made which would help in altering the problem of the budget and even not hamper the distribution system aspect. Case for supporting the idea an alternative solution The most suitable scenario in the given situation would be taking up the alternative path. This given path would follow the `avoidance of wastage idea` an idea similar to that of the Kaizen Distribution, where all unnecessary costs and wastes would be avoided in order to see to it that the distribution centre does not incur the huge amount of costs that it is incurring at the moment (Jacobs, Chase Lummus, 2014). The alternative plan has been elaborated in detail: The inventory is stocked up extremely high with a value of $1,000,000.00. It had been given that the demand from schools remains fairly consistent throughout, however, certain changes do occur doing various parts of the year. This is the reason, why such high levels of stock are maintained. Additionally, these high levels lead to higher discounts and more safety stock concept. This can be avoided by estimating the stock month wise by checking out the trends of the previous year. The line trend of the last few years can be analyzed in order to figure out the future trends of the company (Simchi-Levi, Simchi-Levi Kaminsky, 2016). After doing so, the stock can be stocked up in lower quantities thereby saving the costs. Secondly, the distribution centre is in a large area and can run by giving away half of the area. As the stock levels will be comparatively lower, it can be easily adjusted in half the area which it currently occupies. This way the company will be saving half of the rent and electricity charges. The lowered inventory can be purchased at once and requested to be delivered from the manufacturer in a monthly basis (Coyle et al., 2016). This way the center will be receiving same amount of discount that it has been receiving until now and the problem of safety stock also gets resolved. As far as the staff is concerned, instead of early retirement or laying off the staff, the company can ask them to work in different shifts (Rushton, Croucher, Baker, 2014).If they are asked to work in different shifts, they will not be losing out on their work and side by side look out for better opportunities. Another component of the given plan is to ask the schools to pick up the supplies on their own so that delivery costs are not incurred. Even if the delivery goes from the distribution side instead of going out every two days, they can go out once every month. Rationale behind the case In terms of ethicality, the stakeholders need also needs to be considered while any particular decision is being made. When the distribution centre would have been given away, it would have caused inconvenience to various stakeholders. These stakeholders include various stakeholders like teachers, staff, the personnel working at the centre, and the maintenance staff. The staff has been working in the distribution centre since a very long time and therefore, it is extremely important that the people who are working there are also considered before any rash decision is made. Costs of this method The rent that has to be paid The cost of the employee salary Inventory management cost Cost of delivery Electricity cost Opportunity Cost of the alternate ideas (Mentzer et al., 2013). Benefits of the method Saved rent Saved inventory costs and wastage Reduced salary-Retention of employees- The employees are often considered to be one of the most profitable assets of the organization and the organization too has certain contributions towards it. Hence, it is suggested that the organization needs to take care of the employees. Reduced deficit Each school will not need to maintain its own supplies, hence better for the schools to manage Hence, it can be clearly stated that the benefits of following this idea is much more than the costs which are incurred. This also serves to be a middle path and helps in removal of any consequences for the board as well as the stakeholders involved in the board Conclusion Therefore, it can be stated that there were two clear alternatives available to the company which was giving away the distribution board or keeping it. The third was an additional alternative which would have helped the board to reduce certain costs. All the ideas were well explained and then the case for an alternative idea was built which was reducing excess wastage and keeping the distribution center but decreasing it in size and operations. The reduced operations will not only help in saving the costs but also help in saving the interests of the various stakeholders involved. References Christopher, M. (2016).Logistics supply chain management. Pearson UK. Coyle, J. J., Langley, C. J., Novack, R. A., Gibson, B. (2016).Supply chain management: a logistics perspective. Nelson Education. Islam, D. M. Z., Meier, J. F., Aditjandra, P. 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