Pierre Kitts | Integrated Logistics Case Study 1 | March 2, 2014
Case Study 1 – Buttons Limited
Canadian Distribution System
Executive Summary 1
Initial Stocking of Stores 6
Figure 1 - Average Transit Time by Ocean Container from Manufacturing Plants to Canadian Stores 8
Figure 2 – Initial Stocking of Stores via 40 FT Ocean Containers to DC’s. 9
Full Distribution System Buttons Canada 10
Figure 3 - Average Transit Time by Consolidated Air from Manufacturing Plants to Canadian Stores 11
Figure 4 – Full Canadian Distribution Flow Chart: Consolidated Air into DC’s Replenishment of Stock 12
Canadian 3PL 13
Modal Selection 17
Distribution ...view middle of the document...
If someone has an internet connection, be it at the store level, or via mobile phone, one can be updated to the status of one’s shipment in the supply chain worldwide.
The choice of a 3PL, is also a direct result of the amount of time, testing, implementation and capital required if going it alone vs. a 3PL IT solution that has a tested, tried and true program that works, and that can be implemented and deployed at a moment’s notice, and is truly transparent to all involved in the process. The past problems of lost visibility in the supply chain will be nonexistent through the 3PL’s web portal as well as the fact that there will be one common global system in use throughout.
Changing the incoterm to FCA (Free Carrier) 2010 incoterm will have several benefits to Buttons Canada, in that it provides the Canadian division with the ability gain economies of scale by gaining control of the carriage from manufacturers, which will reduce carriage costs, as well as add complete visibility across the supply chain.
Insurance coverage for the whole network can now be standardize, and purchased as a whole, further improving coverage and costs.
Communications within the division will be accomplished with a VMI (Vendor Managed Inventory) – POS (Point of Sale) system at store level, that will be interlinked to all parties involved corporately, and provide instantaneous updates of stock for manufacturers, ongoing popularity of specific designs to designers, and new trends and their acceptance by the buying public. The system will be interlinked via API (Application Programming Interface) to the 3PL’s DC’s that will provide instantaneous information with regards to stock and therefore when deliveries will be required.
The POS system will have some added benefits to store and managerial staff by providing more time to assist their clients in purchasing decisions, as well as provide insight to head office designers about what the buying public wants, and what’s new and in trend.
By implementing the new cargo strategy, innovative POS-VMI IT systems, as well as the complete transparency of the Canadian 3PL’s supply chain, and the interlinking of DC’s to store level inventories, Buttons Canada will well be on their way to a smooth launch in Canada, and a profitable new Canadian division. Buttons worldwide parent, might consider looking at the Canadian divisions systems further, and implement them worldwide.
Buttons Limited is a global clothing retailer, who has decided to enter the Canadian retail market, with their stylish, but affordable clothes lines, aimed at fourteen to thirty year olds.
The European solutions though presently working, are not ideal, in that the incoterms DAP (Delivered at place) has caused issues in the area of the lack of economies of scale with regards to carriage, as well as resent escalating costs, and the lack of visibility throughout the system, as there is no one globally linked system in place.