Inbound Logistics Analysis

The Everything Store1 In the words of Ned Misener, founding owner of The Everything Store (TES), “…we sell everything. We are like a dollar store, but with a broader range of products and some products costing considerably more than a dollar, but everything is sold at bargain prices.” Products come from a variety of sources, including stock bought through liquidators, stock bought from local agents/distributors (who import from overseas), and stock bought directly from overseas manufacturers and/or wholesalers. The latter will be the focus of the following assignment. The products are sold in 16 TES retail stores across Western Canada. The stores receive stock from a Distribution Centers (DC) located in Edmonton, which serves stores in BC, Alberta, Saskatchewan and Manitoba. The corporate office is also in Edmonton, which is where TES started operations years ago. Asian Import Logistics Most of the products sourced directly from Asia by TES are manufactured in the Guangdong province of China and shipped by container. There is generally enough volume per order to be able to ship in full 40’ containers, since TES usually deals with a Chinese Wholesaler who sources from many manufacturers. Traditionally, the containers are shipped “door-to-door” (i.e. from the wholesaler’s warehouse in China to the TES DC in Edmonton), using a combination of transportation modes. However, TES is considering an opportunity to transload the containers at the port (in Vancouver) into larger domestic intermodal containers for shipment on the Vancouver-to-Edmonton portion of the trip. With this proposal, the 40’ ocean containers would be drayed from the port in Vancouver to the facility of a third-party who would transload the contents into the larger domestic intermodal containers, and then drayed to a Vancouver rail yard where they would be moved by intermodal rail to Edmonton. The analysis of the transloading opportunity is very preliminary at this point, and TES simply want to know how it affects the number of containers moving from Vancouver to Edmonton, and other considerations related to handling. The specific assignment questions are provided on the next page. Data and Assumptions • For the sake of the analysis, use carton dimensions of length (L) x width (W) x height (H) (as per the data page; all dimensions in inches). Cartons are floor-loaded in the ocean containers (assume the L dimension cannot be the upward dimension, but otherwise they can be rotated in any way). • The containers are Maersk 40′ Standard containers, as per the dimensions provided here. Assume that TES imports 24 full (cubed-out) containers per year. • The domestic intermodal containers are CN Rail 53’ high cube containers, as per the dimensions provided here. • You may want to use the free trial software from www.softtruck.com to determine cartons per container/trailer. (I have used this, it is safe to download).  1 The company is fictitious, although the context is based on a realistic logistics scenario. • For palletized cartons, assume 40×48-inch standard pallets, and that the cartons should be loaded on the pallets without any overhang. The cartons must have the H dimension upward when stacked on the pallets. The maximum height of a pallet load should be such that it can fit into a 60” pallet rack slot height in the TES warehouse, but this requires 6” of clearance for maneuvering in and out, as well as 6” for the height of the pallet. Pallets can be stacked in the trailer two high. (Note – you will need to determine the number of cartons per pallet; this shouldn’t be an overly difficult manual calculation, but if you prefer you can use CargoWiz – be careful though. You will also need to determine the number of pallets per domestic intermodal container under different loading configurations – straight loaded, pinwheeled, and if all pallets are turned – which is also a manual calculation; drawing yourself a diagram will help.)

Assignment Questions 1. Determine how many cartons fit into one ocean container. Then determine how many domestic containers would be required to ship the same annual volume (note that the number of containers/year can be a decimal number – this will be discussed in class), under each of the following loading methodologies: floor loaded; double-stacked pallet loads that are loaded straight, pinwheeled, and all turned. Be sure to use the carton dimensions that correspond to your student ID. 2. Using transloading could reduce annual transportation costs, but there would be a trade-off as handling costs would increase. Discuss… (you don’t have numbers for this; a general discussion of where additional handling costs would come into play and what they would entail will be fine.)