American Lighting Product Case
Daniele Francescon Stephane Nicolay
AMERICAN LIGHTING PRODUCTS Case Study
Business Logistics
November 2008
TABLE OF CONTENTS Preface 3
Analysis of the situation 3
Physical flow of goods 3 Organisational structure 3 Information management: order processing and demand forecasting 4 Performance 4 Costs 5
Identification of major issues and problems 6
Incipit 6 Initial consideration: need to redesign the system 6
Generation of alternative solutions 7
First solution: centralization for the west area 7 Second solution: LOC for consumer products 8
Further considerations and conclusions 9
List of references 10
Appendix 1 – Calculations 12
Preface
The purpose of the following essay is to analyse the firm, trying to propose solutions based on mathematical evidence, and provide some critical judgement about the company’s actual system based on our knowledge. We won’t spend too many words to describe the company, since a good and concise description is already given by the text, the approach is intended to be critic rather than descriptive. An appendix attached to this paper will provide detailed information about the calculations made and the reasoning behind them.
Analysis of the situation
Physical flow of goods
ALP warehouses its finished goods inventory in eight master distribution canters (MDCs) located throughout the United States, each servicing sales for its entire region. The whole flow of goods can be represented as a flow chart as the one shown in figure below. It can be taken as an assumption that each MDC is serving the close region. No information is given on the method followed when selecting the location, but the proximity to the customer base is likely to be the driver to such a decision.
Organisational structure
ALP is belonging to a larger corporation, American Electric Products (AEP), which produces many other consumer and industrial
AMERICAN LIGHTING PRODUCTS Case Study
Business Logistics
November 2008
TABLE OF CONTENTS Preface 3
Analysis of the situation 3
Physical flow of goods 3 Organisational structure 3 Information management: order processing and demand forecasting 4 Performance 4 Costs 5
Identification of major issues and problems 6
Incipit 6 Initial consideration: need to redesign the system 6
Generation of alternative solutions 7
First solution: centralization for the west area 7 Second solution: LOC for consumer products 8
Further considerations and conclusions 9
List of references 10
Appendix 1 – Calculations 12
Preface
The purpose of the following essay is to analyse the firm, trying to propose solutions based on mathematical evidence, and provide some critical judgement about the company’s actual system based on our knowledge. We won’t spend too many words to describe the company, since a good and concise description is already given by the text, the approach is intended to be critic rather than descriptive. An appendix attached to this paper will provide detailed information about the calculations made and the reasoning behind them.
Analysis of the situation
Physical flow of goods
ALP warehouses its finished goods inventory in eight master distribution canters (MDCs) located throughout the United States, each servicing sales for its entire region. The whole flow of goods can be represented as a flow chart as the one shown in figure below. It can be taken as an assumption that each MDC is serving the close region. No information is given on the method followed when selecting the location, but the proximity to the customer base is likely to be the driver to such a decision.
Organisational structure
ALP is belonging to a larger corporation, American Electric Products (AEP), which produces many other consumer and industrial