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Choolwe and Sons Ltd [CSL] is a medium niche provider of garden products including seeds, feeders and associated products. One of the best-selling products is sunflower seed hearts. They are sold in 1 kg, 3 kg, 5 kg, and 10 kg packs to 150 garden centres, 30 pet shops, and three supermarket chains and direct to the public via the Internet.
The seeds are procured from China, packed in 50 kg sacks delivered in minimum 11-tonne loads. The lead time from order to delivery to CSL is quoted at 40 calendar days. CSL use an agent to manage the freight forwarding to the CSL packing and distribution plant. CSL break the sacks down into the four different sized packs based upon the production forecast which is firmed up at the beginning of each month. Demand is variable, dependent upon the route to market and the season. Overall, it can vary from 5 to 20 tonnes per month.
The maximum storage capacity of the CSL packing and distribution plant is 24 tonnes of finished products and 26 tonnes of the 50 kg sacks.
Garden centres and pet shops order weekly, supermarkets forecast weekly but firm up at 18.00hrs the day before delivery and products are on a sale or return basis. Customers ordering via the Internet before 15hrs will have their products dispatched the same day.
Delivery to local garden centres and pet shops is undertaken by CSL’s own transport and for distant outlets a national carrier is used. For supermarket deliveries, and returns, a different national carrier is used and for direct to public sales the Express Mail Service [EMS], Zampost Parcel Service is used.
CSL has experienced a number of issues relating to its Logistical Activities. Namely:
1. Returned goods from pet shops and garden centres because of damaged packaging during transit or offloading
2. Large volume returns from supermarkets as a new season’s products are substituted in valuable gondola-end displays within the retailer
3. Shortages of 1 kg and 3 kg packs
4. Insufficient storage capacity within the packing and distribution plant.
You have been appointed as a new Logistics Manager and have been given free rein to review the logistics operation and the following questions have been asked of you.
1. What issues can you identify that are related to your function and what solutions could you suggest?
2. What issues do you anticipate having to discuss with other departments such as Marketing and Sales, Production, Distribution and Procurement, and what facets (aspects) of their responsibilities would you seek to persuade them to change?
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