1 ) Company Profile:a. High-end retail merchant in Canada with 10 shops in seven Canadian metropoliss B. Sells top quality. branded and private-label interior decorator manners every bit good as cosmetics c. Owned by the Wittington Group headed by Galen Weston
d. Peak gross revenues occurred in March/April. July/August and November/December e. Publicity runs used throughout the twelvemonth for promotional intents f. 21. 500 orders a twelvemonth at the company’s flagship shop on Bloor Street. Toronto g. 1000 providers about used in a twelvemonth out of a sum of 3000 h.
500. 000 SKUs out of which 50 % were active at any given clip I. New debuts accounted for 40 to 50 % of SKUs ordered
2 ) The Logistics Function at Holt Renfrew:a. Primary Distribution Center ( DC )I. A primary 80. 000 square-foot Distribution Center ( DC ) in Mississauga. Ontario where all ware ordered by Holt Renfrew’s purchasers was shipped. two. The DC was designed as a flow-through warehouse. All ware coming in has to be processed instantly and later. shipped to the shops.
three. Primary activities in the DC were lot picking. fining and labeling ware. four. 55 hourly. full-time staff worked at the DC over two displacements. v. DC received on norm about 40 $ million of stock list every month ( 136. 000 cartons and 32. 000 sets of hanging ware every twelvemonth ) . six. 3. 3 million units of ware shipped from DC to shops every twelvemonth.
B. Secondary WarehouseI. A secondary 60. 000 square-foot installation was besides located in Mississauga two. This held stock list that was non sold in the shops and which was later sent to the Last Call. the shops located in Winnipeg and Toronto where they were sold at a significant price reduction. three. If the ware was non sold at the Last Call. it was returned by the shops to this secondary warehouse and maintain at that place until disposed. Presently. there was $ 1 million of such stock list in this secondary warehouse.
3 ) Problems faced by Holt Renfrew:a. Order processing and trailingI. This was a really hapless and time-consuming procedure as the staff largely exhausted clip on the phone confirming and seting their orders with providers. two. The shop directors would besides invariably name to look into on the bringing position of ware. as a consequence of which the staff had to follow up the orders with providers and transit service suppliers. B. Inventory control
I. Both of the warehouses were running on full capacity. which increased the cost of pull offing stock list for Holt Renfrew. two. The stock list was scattered all over the warehouses. doing it really hard to happen at times. c. Inventory processing
I. With respects to providers presenting goods. they merely sent the goods without any anterior presentment. This led to a variable rate of reaching of stock in the ware houses. two. There was besides no information that Holt Renfrew received about whether the ware shipped by the providers was of the right quality or measure. three. Processing ware while go forthing and come ining the warehouses was In itself a really inefficient and unfruitful undertaking because of the bad province of stock list direction in the warehouse. This contributed to frequent stock outs in the shops because of the deficiency of proper stock list processing. 4 ) Proposed Solutions
a. Long term:i. Firstly. in order to better the operating efficiency of Holt Renfrew and its spouses in the long term. a collaborative agreement demands to be formed to leverage strategic placement. This agreement needs to be made between the providers. Holt Renfrew itself. the transit service suppliers and the shops. One possible agreement could be the CPFR whereby these trading spouses could expeditiously pull off be aftering. prediction and logistics activities. They would hold to aline single concern procedures by developing joint strategic concern programs. This would enable Holt Renfrew to break predict demand forms and tendencies and hence. be able to cut down stock list in its warehouses. two. Second. to ease the supply concatenation operations. there needs to be execution of a Management Information System ( MIS ) throughout the supply concatenation by which information about each and every order can be processed. shared and tracked at every degree of the supply concatenation utilizing effectual tracking methods such as RFID or saloon cryptography. This would besides back up the flow-warehouse design of the DC. which depends on efficient information flows. It would take about 4-5 old ages which is the minimal clip to accomplish an established information direction system. The warehouse outgo should so be reassessed and optimized. B. Short term
I. ( Mezzanine Floor )In order to provide to the job in the short tally. Tony Kelly needs to suggest the enlargement of the DC to include a mezzanine floor every bit shortly as possible so that the warehouse has more infinite. They face a deficit of warehouse infinite which could take to more stock outs if there isn’t adequate infinite to go on operations. The proposed first balcony floor would give them more infinite in the DC to run their primary gross revenues processs in the short tally while they sorted out better stock list direction processs that allow them to change storage installations in the hereafter.
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