Allied Office Products Case Solution
Success Study for business Forms Division of Allied Office Products February 9, 2007 Proposal Team: Brant Allegretti, Kirk Blackwelder, Rick Calero, Mary Coffee, Jonathan Doddridge, Mike Taylor, Carlos Villarreal Overview Background Goals and Objectives Options Situation Analysis Activities Based Cost( ABC) Analysis Potential Threats/ Risk Mitigation Recommendations Summary Allied Business Forms Division 2 February 9, 2007 Background Annual sales of$ 900 million Forms Manufacturing Business forms Specialty paper Business Forms Inventory Management Services- Total Forms Control( TFC) Warehousing Inventory funding Forms use reporting Inventory control Distribution ( Pick pack & desktop shipment) February 9, 2007 Allied Business Forms Division 3 Background TFC Inventory Storage 10 warehouse Pricing Clients charged flat regular monthly charge on item expense plus 32.2 %, despite level of service Covers warehousing, circulation, expense of capital for stock & freight expenditure( based upon 1990 aggregated monetary information) Profit Margin Sales force charges average of 20% of item & services; private accounts can differ from basic formula February 9, 2007 Allied Business Forms Division 4 Background Value Chain Concept- TFC Industry Chain Trees Pulp Paper Forms Mfg. Forms Sales TFC Customer Purchasing Executive Customer Receiving Forms User The TFC Chain Storage & Inventory Financing Requisitioning Stock Selection & Pick Pack Order Entry & Billing Desk Top Delivery Freight February 9, 2007 Allied Business Forms Division 5 Goals & Platform Review Current State Identify Areas for Makeover Increase ROI on TFC from 6% to 20% February 9, 2007 Allied Business Forms Division 6 Storage & Inventory Financing" Don't you believe we should do something to obtain that old stock moving?"-- Tim, Kansas City, MO Distribution Facility Inventory Obsolescence Excess Inventory Cost of Capital Customer does not spend for stock till appropriation submission February 9, 2007 Allied Business Forms Division 7 Requisitioning" I've specified where I understand the clients so well, that the order details is simple. The only thing that truly matters is the number of lines I need to go into." Hazel Nutley, Data Entry Controller 310,000 appropriations annually Each appropriation-- typical 2.5 product lines Reduce information entry -integrate purchase history in appropriation procedure; identify regular reorders Institute minimum appropriation requirements; under$ X, additional cost charged Allied Business Forms Division 8 February 9, 2007 Stock Selection/ Pick Pack" Almost is whatever choice pack nowadays. Nobody appears to buy a container of 500 products any longer."-- Rick Fosmire,
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