A $30 million, 108 year old, family-owned distributor of plumbing and electrical products with its Corporate Headquarters and Distribution Center (DC) located at 2018 Oleander Drive in Wilmington, NC has decided to make a change in how inventory is replenished to its eight (8) branches. The locations for the branches are as follows:
· 529 Seaside Road, SW
Ocean Isle Beach, NC 28469
· 550 Highway 501
Myrtle Beach, SC 29577
· 1301 Roberts Avenue
Lumberton, NC 28358
· 1520 N. Marine Blvd.
Jacksonville, NC 28540
· 2411 Martin Luther King Blvd.
New Bern, NC 28562
· 4000 Bridges Street
Morehead City, NC 28557
· 533 S. New Hope Road
Raleigh, NC 27610
· 310 Robeson Street Fayetteville, NC 28301
Currently each branch sends a 22 foot box truck to the DC in Wilmington one day a week, on a set schedule, to pick up the branch replenishment inventory order. Two branch trucks a day, 4 days a week arrive at the DC to be loaded. The replenishment inventory order for a branch generally fills the entire truck.
The distributor has found a variety of problems associated with the current approach to branch inventory replenishment. One of the biggest problems is that it leaves each branch short a truck driver and their largest truck for customer deliveries a substantial part of the day when the branch goes to the DC to pick up replenishment inventory. Each branch only has one full-time truck driver and one 22 foot box truck, a small van, and a pickup truck allocated to it. On the day their box truck goes to the DC, branches often find themselves scrambling to make customers happy who call in orders at the last minute and need them delivered that same day. Even if the customer's order will fit in the van or pickup truck, because the regular truck driver is not available, someone from the warehouse or sales has to make the delivery, leaving the branch short-handed in one of those areas. The distributor has historically differentiated itself from its competitors by its ability to accommodate last minute, same day deliveries, but that one day a week the branch truck goes to Wilmington can make it difficult to maintain the reputation. There are some customers you only have to disappoint once to lose years of business.
Another significant problem with the current approach to the replenishment of branch inventory is how it impacts the DC and its personnel. Because the branch trucks frequently have to make customer deliveries on their way to the DC, the DC Manager never knows from one day to the next what time a branch truck is going to arrive to be loaded, and on top of that whether the two branch trucks scheduled for that day will happen to arrive at the same time. This makes planning daily job assignments for his DC personnel extremely difficult. DC warehouse employees have multiple responsibilities including unloading truckloads of products coming in from manufacturers, putting away stock, picking and packing orders for customers and branch inventory replenishment, loading trucks for customer deliveries out of the DC, and general warehouse organizational and housekeeping duties. Invariably a branch truck will arrive to be loaded when DC employees are at lunch, or when they are unloading a truckload of product from a manufacturer. The result in either case is that the branch driver is forced to just wait around, unproductive, until DC personnel are available to load his truck.
To address the problems resulting from the current approach to branch inventory replenishment, the distributor's V.P. of Operations has decided to have replenishment inventory delivered to each of the eight branches out of the Wilmington DC, instead of the branches coming to the DC. Two branch deliveries, one branch in the morning and the second branch in the afternoon, will be made each day, Monday thru Thursday. The DC will hire a truck driver whose sole responsibility will be to make these branch replenishment deliveries. The V.P. does not want to purchase another truck, so the largest truck the DC has available, a 22 foot box truck, will be used. The V.P. has laid out the following additional parameters for this new program:
The driver will work a maximum of 40 hours per week over the 4 days and is not to incur any overtime. As with all employees, the driver will be allotted 1 hour for lunch each day.
The truck will be loaded by DC personnel with the morning branch delivery the evening before, so that the driver can depart the DC at 7:00 a.m. each day.
Since each branch's inventory replenishment order typically fills an entire 22 foot box truck, the driver will have to return to Wilmington to be loaded for the afternoon branch delivery. The DC will have the afternoon delivery order picked, packed, and palletized, and ready to be loaded when the truck returns. The truck will be loaded by DC personnel within 30 minutes.
Upon completion of the afternoon delivery, the truck will return to the Wilmington DC where it will be loaded for the following morning branch delivery.
A maximum of 1 hour will be allotted for the truck to be at each branch to be unloaded.
Assignment Details and Requirements
Develop Delivery Truck Schedule Presentation
The weekly, Monday - Thursday, Branch Inventory Replenishment Delivery Truck Schedule needs to be developed for presentation to the V.P. of Operations. This is your assignment. The schedule will designate for each day the branch location for morning delivery and the branch location for afternoon delivery.
In addition to the schedule itself, your presentation must include your supporting analysis (miles between travel points, travel time, etc.) demonstrating that the parameters detailed by the V.P. for the program have been accounted for.