Page 262 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 11: Supply Chain Logistics Design

Protection has been included for building columns and rack legs where appropriate and Notes
all narrow aisles use rail guidance and are suitable for narrow aisle equipment. The
materials handling equipment (MHE) consists of narrow aisle combis, VNA order picking
vehicles, reach trucks, a counterbalance truck plus hand pallet trucks. The specification for
MHE is tied in tightly with that of the racking so that they work effectively together.

The Benefits
A clear and costed upgrade path has been provided to respond to unplanned volume
increases. It details the actions required, the cost and the resulting output. The interim
solution provides three quarters of the 24 zones of shelving with no conveyor-and the
solution is handling around half the expected order volume planned for the final start-up
configuration.
Total Logistics continued to support Premier Farnell through the phased implementation
with the remaining picking area being first followed by two stages of bulk storage
implementation. Its approach throughout has given flexibility to allow for 'step'
implementation, without the requirement for costly re-engineering. The interim racking
configurations and SKU storage locations mirror the final solution and all Premier Farnell's
growth and planning objectives have been built in to the interim and final designs.
Critically - and despite necessary changes to the original solution design - Premier Farnell
is accruing the delivery savings it first sought for its international eBusiness. Total Logistics
has streamlined the operations to save time and money, maximised available warehousing
space and integrated a third distribution hub into the business while ensuring that customer
service levels remained high and operations uninterrupted.
Questions
1. What are the benefits stated in the case?

2. Critically analyze the case study.
Source: http://www.total-logistics.eu.com/logistics-clients/logistics-case-studies/p-farnell-case-
study.html

11.6 Summary

 Customer requirements are diverse for different types of products and range enormously
from one market sector to another.
 The customer profile of Style and Grace is high end and high middle income group
clientele.

 Suppliers of branded products that are not established may provide their goods on a
‘consignment’ basis, i.e. the goods are paid for when they are sold and unsold goods are
taken back by the manufacturer.

 The overall strategy calls for coordination of two different supply chains. The functional
spectrum aspect depicts two supply chains that move in opposite directions.
 Managing demand uncertainty in a cost effective manner can lead to significant benefits
for a company from lower supply chain costs to improved customer service levels.
 Strategic fit determines the extent to which the activities of organizations working in
partnership complement each other in such a way as to contribute to competitive advantage.

 With increased globalization and offshore sourcing, global supply chain management is
becoming an important issue for many businesses.

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