SECTION – B

SECTION – C

The company has of its own warehouse situated in the four zones of north, south, east and west that receive products from almost all the plants on a regular and consignment basis in containers by road. These warehouses are responsible for taking care of stocks, order placement, apart from order processing and transshipment of goods to C&F agents of respective zones whose numbers come around 150 per warehouse.

After receiving goods from various plants, these warehousing are first entered into the computer for inventory recording purposes. Suitable storage location spaces are then assigned after taking into consideration the quantity to be stored, the physical dimension, characteristics of items, frequency of flow, and availability of the space, which is quote variable and flexible. For storage of goods , flexible racking system is used so that the size of a rack’s space can be  changed as per the size on the product’s package. Furthermore, racking is back-to-back in pallet blocks which are 5 storeyed and in one block, there are about 400 back-to-back rocks.

In certain areas, for selected heavy weight and bulky items, 50 selectors drive forklift trucks and in the remaining areas, as many as 350 selectors pick the goods mutually and use hard trolley. Selectors are normally less educated and highly experienced, who have well-defined areas of selection.

With this existing system, there have been a lot of practical problems, such as under utilization of space, traffic congestion  aisles between the racks as one selector blocks another’s progress while he is picking items from a location, wrong assortment, difficult to track goods, difficult to fill one single order as it contains a variety of items etc. Furthermore, a trucker is required to collect items from different places of the warehouse to make up the order.  Frequently, they have to wait for a full load. Then, the driver had to collect challan and other required papers. Normally, this whole process took seven to ten days, subject to ready availability of the goods in the stock. In the case of stock-out items, it may goes anywhere in between 15 to 30 days. That is why, replenishment cycle time for nearby C&F agents is about 15 days and for others, it comes around 3 weeks.

Due to a gradual increase in the quantum of competition and increasing customer expectations, along with increasing awareness about the overwhelming contribution of L&SCM cost reduction and service improvement, the top management of PCL have appointed highly qualified and experienced professionals at all four warehouses with the following objectives:

·         to improve the efficiency of the warehouses;

·         to reduce the replenishment cycle time by 25 per cent;

·         to reduce the total logistical costs by 10 per cent; and

·         to have transparency in dispatch of premium products.

Mr. A. K. Sinha, who joined the south zone as chief of warehouse, has had a very successful career of 25 years. He wants to redefine the whole warehouse operating system.

 Answer the following questions:-

a.      How should Mr. Sinha approach this problem?

b.      Develop a strategy to overcome the problem and fulfill the redefined objectives of the firm.

c.       What changes would be recommended for the implementation of the new strategy?