Describe advantages and disadvantages of holding inventory
You are the Logistics Manager for a Spanish retailer of sports clothing and equipment (shirts, shorts, swimwear, training shoes, and sports equipment) which has over 150 retail outlets across Spain.
In the past, your company has purchased its products from local suppliers.
To remain competitive the company has decided to purchase its products from 3 overseas manufacturers based in Brazil (swimwear), South Africa (sports equipment) and China (clothing). This will enable the company to purchase their products at a much lower price than from their local suppliers. However, there will be a requirement to carefully plan the logistics support required to ensure the products are shipped in an efficient manner to the Spanish port of Algeciras and then by road to the retail outlets.
1 Inbound Logistics (30%)
What logistical issues would you have to consider before you could ensure the products could be successfully transported from the overseas suppliers to the port of Algeciras in southern Spain? Assume the goods are shipped in standard 20ft and 40ft containers.
2 Shipping Services (10%)
Select a major container port in Brazil, South Africa and China and produce a table showing:
(a) Two shipping lines offering services from these ports to Algeciras.
(b) Their transit times.
(c) Their frequency of service.
3 Distribution Centre in Algeciras (20%)
The Company's local suppliers currently deliver directly to the retail outlets on a weekly basis. The suppliers use their own fleet of vehicles to make these deliveries. With the planned move to use overseas suppliers, Sol Sport is considering establishing a distribution centre in Algeciras with a view to holding 6 weeks inventory.
Describe what would be the advantages and disadvantages of holding this inventory.