Operator logistical Salvadorian Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Operator logistical Salvadorian Case Solution

Shipping

The loading area had ten docks, each of which was enclosed by the cages to keep the drivers out of the area of storage. The items assembled by pickers were tested at each section's inspection area to ensure that they fit the list in the unified order.

Problem Analysis

Calleja had insisted that a specific warehouse be devoted to its service, meaning that the warehouse used by Calleja could not be used by any other OPLS client's products.
With the possibility of Calleja opening more stores, more storage space would be needed
Because of the nature of the merchandise (toys, Christmas gifts, and so on), retail orders will be ordered by items rather than boxes, making order picking more difficult. Individual item handling would be needed when picking the orders
Eighty percent of the boxes will not be parallelized and will be scattered everywhere. Each container must be tested for 5 days after it arrives to detect non-compliant goods
The process of order picking would be difficult for Ransack to tackle since its product control program was designed to only work with whole boxes

Solution Analysis

There are three options suggested by Aluinada:

Option 1:

To use its own warehouse which was made to serve as a bonded warehouse. This facility has two areas,one of which can be used to serve for Calleja. The first area cannot be used as there is not shelve and Calleja operations requested for double depth shelving position required by Calera. Second area can be considered if they move its products as mentioned. Although there is less capacity of 100 position for double depth shelving, but it can be solved if warehouse management is done efficiently. The cost for using second area is $66,618 (40,375 * 1.65).

Option 2:

To use vacant industrial building to provide service to Calleja Christmas operations for the month. This option cannot be used after seasonal sale period to further cater the needs of Calleja in case it assigns imported nonperishable unit managed product OPLS. The cost for renting one month is $54,573 (32,292 * 1.69).

Option 3:

Industrial building can be rented, which cost $170,285 (150,695 * 1.13) per month. The drawback for renting the building is its located in busy road and warehouse access was difficult. It was 2 miles away OPLS makes difficult for management staff to manage two warehouses in different location, so the new management staff is needed to be hired, which makes it more complicated.

Conclusion

Calleja requires an independent warehouse to carry its operations and that should not be used for OPLS other customers, nor delivery trucks can be used for carry other customer items. So separate warehouse is required to carry its operations.After analyzing all three options, the most favorable option is option 1 (second area). By opting this option there is no need to rent an area at another location, which can save time and money of the management staff. This option will be feasible if Calleja want to outsource OPLS after seasonal operation as well. Although cost is bit higher than the option 2,but this option will not be used after the seasonal sales’ period. The options have limitations as they do not provide solution if Calleja increases its capacity by expanding its stores.

Apart from warehouse capacity management, there are also other steps that are required to be taken by OPLS in order to overcome other problems which could be faced by the company after this order.

The products that are involved in operation management,will be placed by items, not the boxes, which makes picking difficult and the problem could be solved by developing a warehouse layout, performing an ABC review, choosing the best picking technique and using software to direct the clerks through the picking process.

Number of days of container inspection should be reduced to identifying non-compliant product sooner so that they could be returned to suppliersas soon as possible and immediately put away in warehouse as followed by the world class warehousing technique. Power pallet trucks and conveyors can be used to unload the freight and clear the dock areas quicker and more safely.

Inventory management software should be updated by use of technology so that they could be used for items that are not in boxes..........................

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Operator logistical Salvadorian Harvard Case Solution & Analysis