IL ASSIGNMENT-BHUWAN CHANDRA PANDE-PGP14/20 Answer:1 Integrated logistics function for Mr.

R Right can be formulated in following manner: M/s Ace Sports has a large supplier base comprising of around 40 suppliers which enables it to have a high Bargaining Power over them, hence buy raw materials at a good price. M/s Ace Sports has four major buyers of which one M/s Mass Sportswear having 50% market share, hence out on any one would be dangerous for Ace hence it has to meet all their buyers requirements at a service level unmatched by its competitors. Ace also uses a private fleet for delivering finished goods from the factory to the public warehouse and the same fleet to deliver them from the public to the retailers, warehouse. They are using HUB & SPOKE model at the public warehouse where consolidation (back-hauling) as well as forward hauling takes place. The construction of the warehouse near the plant has ensured smooth operations and material handling for Ace, and transportation of finished goods to a public warehouse 100 kms away has given them a low cost of ownership, time utility and place advantage (markets just 100 kms away). Other constituents of the channel are the suppliers and buyers for the M/s Ace Sports. The company follows the strategy of leveraging through supplier competition. In case of buyer company has four retail buyers and managing them according to their market share is what company should follow. In this case the prices of sporting goods go down because of the competitors opening new facilities nearby. This problem can be solved in many ways, one of which may be improving our process and cutting down the costs. Answer 2: The foremost way to improve the delivery problems will be to integrate the Order processing function with Logistics Department from Administration. It will solve the issue of delays in order processing. Another way to alleviate delivery problems will be to store inventory at point of use. M/S Ace Sports could maintain inventory at the premises of M/S Mass Sportswear. So the retailer would have some inventory at hand Administration Managers responsibilities are large as he is performing many function rendering him incapable of delivering on time to M/s Mass Sportswear, hence his responsibilities can be segregated into two functions and purchasing and human resource. VMI (Vendor Managed inventory) can be an efficient option to keep track of all the requirements of M/s Mass Sportswear. Here M/s Mass Sportswear would be responsible to make all the information available to the M/s Ace Sports. However, the relationship the buyers and suppliers will have to be consolidated with collaborative efforts and large information sharing. Going for 3PL (Third Party Logistics) providers having carriers recruited for picking up, assembling and consolidating order (Surface Freight Forwarding).Since M/s Mass Sportswear is a very important buyer for Ace, a dedicated carrier can be deployed to look into the service needs of this customer. This may be a better choice instead of

holding large inventories for this customer at the public warehouse which might bring an obsolescence risk. SOLUTION 3: Various Options thought by M/s Ace Sportswear to become a "low-cost high-quality" product manufacturer can be: 1. Go into a low-cost labour market to bring down the cost of production and sourcing raw materials from new suppliers for the goods. 2. Lower cost of raw materials and lower operating cost a. This can be achieved using low cost suppliers or outsourcing or off shoring b. It can also be achieved using substitute raw materials, but quality will become an important issue c. Using lower cost labour and using lower cost factors of production (such as energy sources, capital, etc.) 3. Lower carrying cost and holding cost of inventory a. This can be achieved by using warehouses in ways to reduce cost b. Using efficient modes of transportation 4. Continuing with existing suppliers and consolidation of reliable logistics network to bring down the total cost of sourcing from suppliers and servicing the buyers. 5. Go for Strategic supplier segmentation. This will result in a binding, long term relationship with these suppliers. Non-key component suppliers could be negotiated on prices given a large pool of suppliers exist. Answer 4: Some areas of concern of setting a unit in a low cost labour market are: 1. 2. Quality Low cost often translates to lower quality due to underpayment of workers Getting skilled labour to produce high quality products Proper assessment of the required skill sets is essential to reduce labour cost. Transportation and holding costTransportation and holding cost can be minimise using proper scheduling techniques and using linear programming to calculate and optimise whether shifting out production to lower cost areas will be cost effective. Maintenance and Handling of documents: In international logistics, documentation is of utmost importance. Use of latest technology to produce quality goods as well as responsiveness to meet customer requirement is one of the many prime concerns

3.

4. 5.