Question

Consider a hypothetical wholesale distributor – Bobcat Distribution Services - in the North East United States that provides goods and services to grocery stores throughout the region. They provide a range of services including the procurement, storage, and delivery of a wide selection of products at competitive prices in categories that include: grocery, dairy, frozen foods, bakery, deli, fresh meat, seafood, produce and others. The company continually strives to provide high-quality service with greatest possible efficiency, and so management looks to procurement and transportation for improvements on a continual basis. Answer the following questions relative to an operation of this type:

What other supply chain management recommendations (quantitative methods, best practices, approaches, etc.) would you make to this distributor pertaining to each of the following:

Network design. Explain your response

Transportation. Explain your response.

Distribution and warehousing. Explain your response

Procurement and sourcing. Explain your response.

Answer 1

As given in the case, Bobcat distribution services based out of North East United States is providing goods and services to grocery stores throughout the region. Their services include:

• Procurement
• Storage
• Delivery

The major products covered by them are: grocery, diary, frozen foods, bakery, deli, fresh meat, seafood, produce and others.

In terms of network design, the company can adopt two strategies: hub spoke model or hybrid model where companies procure and sell directly from manufacturer and use hub spoke model in the last mile. Since it is already mentioned that Bobcat is using the latest technologies and solutions, they could already be using such hybrid models. One recommendation to them would be to prepare an optimizer based network model design using statistical models based on all the parameters which can help in finding the utilization of all warehouses across the state. It can also help in identifying the gaps in warehouse servicing which can lead to opening / closing of warehouses to increase the network model efficiency.

For transportation, there has to be constant communication between various contracted transporters and the operations staff. It is highly recommended to use a platform based tool which will be available to Bobcat logistic operators and the transporters. This can help in sharing the requirements as soon as it generates and reduce the human involvement for coordination. It will also ensure that all the vehicle details can be captured easily since transporters would have to share that. Enabling the transportation system with vehicle tracking mechanism will also help in providing complete visibility to Bobcat employees as well as the customer to track the vehicle movement.

For distribution and warehousing, the network model suggested above should be implemented. To ensure the warehouses are being used optimally, warehouse management systems (WMS) would have to be implemented. The WMS would help in achieving the following:

• Effective space utilization
WMS systems will have provide space to storing inventory rather than manual intervention. It will also help in effective space utilization which will ensure that the warehouse space can be managed well for all other products

• Bin management
Having a proper recognized bin management system ensures that all the products in the warehouse are being accounted for. All inventory coming in and going out of system, will be tracked using bin management systems.

• Complete visibility to inventory
Having an effective bin management system helps in ensuring that all the data is available to warehouse operators who can audit and provide all the information for higher management to take strategic decisions.

• Assist in warehouse automation
WMS also helps in identifying the gaps in warehouse movement. This can help in acting as a base of automation systems like ASRS which can significantly improve the WH operations

• Ensure FIFO model of inventory rotation


To ensure Procurement and scouring is well managed, one major recommendation would be to use a platform based tool. Using an e-procurement tools data can be effectively managed. Previously all the data was managed manually. To get a vendor on boarded there were many steps like sharing RFQ`s, receiving the quotes, analyzing them, predicting the best rate etc. Now e-procurement tools offer platform based solutions which will assist in sharing RFQ`s, help in obtaining the quotes, analyze them and provide best feasible rates. This will significantly reduce the manual intervention and tedious role of the procurement team to share RFQ via email, collect multiple quotes, consolidate and compile them and provide through analysis for the same. The systems are capable of doing all these actions and provide a better working condition for the procurement team. Another change in sourcing strategy is long term contracts with suppliers and vendors. Long term contracts help in developing the vendor, and building the relationship between vendor and the customer. Consider for case of transportation vendor, the rates will change depending on the changes in fuel rates. If the long term contracts are in place with small changes based on price fluctuations then it will benefit both vendor and customer. Customers need not provide new contracts based on changes in rates. The long term contract would mean the vendor also gets assurance of longer sustained income and develop his fleet and organization.