Cango Week 3&4

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Weeks 3 & 4 Video Case Analysis


This report has been created to advise CanGo’s management as to appropriate courses of action needed to address various challenges facing the firm. This is the second report in a series of reports. This will cover the strategic planning for the operations and the financial planning for implementing new technologies. As well as a flow chart that will improve the telephonic procedures of customer service. This report will also review other issues that we have seen that can use some restructuring.

Current Procedures:

1. Customers place their order on-line, and when they press the "submit" button, it signals the order fulfillment software to swing into action. Coding of book numbers indicates where the books come from. Bestsellers are shipped directly from CanGo's warehouse. Bestsellers are stored at CanGo so that they can be shipped quickly. Often, they can be shipped the same day they are ordered. Books from wholesalers should take about two days until they are received, repackaged, and shipped to customers, while books from publishers should take about three days for the same process. If a customer places an order for books that come from more than one source, all books are held until the order is complete. 2. Books held in inventory (bestsellers of all types) are received from wholesalers at the receiving dock. They are sorted by subject and moved to the proper storage shelf in the book storage area on forklifts. 3. Books from wholesalers and publishers that are to be sent to customers (rather than placed in inventory) are sorted and placed on a conveyor 4. At the computer and pick stations, operators receive orders on-screen. When an operator becomes idle, she takes the next unfilled order appearing on her screen. She enters her ID number to indicate that she is filling that order so that nobody else tries to fill the order at the same time. 5. Books on the conveyor are moved along until they come to a "T" in the conveyor line. At the "T," a barcode reader reads the information on the order tag to determine if gift-wrapping is required. If so, the book is diverted to the gift wrap area. If not, the book is moved to the customer cubby hole holding area where it is removed from the conveyor by a human book handler. 6. If a book is diverted to the gift wrap area, a gift wrapper pulls the tote with book off the conveyor and wraps the book. When the book is wrapped, the tag indicating that gift wrap is necessary is pulled off the barcode order tag. The tote with wrapped book is then placed back on the conveyor where it is moved to the customer cubby hole holding area. 7. Once the order is completed, the books are removed from the cubby-hole and packaged with shrink wrap and bubble wrap, placed in the appropriate box with customers’ address. The barcode order tag from the customer’s address is placed in a bin that goes to accounting for further processing. 8. Boxes are placed on the appropriate shipping dock for movement to a contracted ground carrier who carries the parcels to international shippers such as UPS, U. S. Mail, or FEDEX.


We believe that we can strategically improve this procedure with new technologies that will catapult CanGo into the future of warehousing. This is our financial projections for implementing a better way of doing business.

Financials for ASRS in warehousing
The proposal is to find a way to meet the needs of a projected 500% increase in sales this fall (one quarter of sales). One proposal is to introduce a new system, an ASRS (Automated Storage/Retrieval and Return/Sorting System). This system will bring Cango into the present with its state of the art warehousing techniques. The Question is it a viable long term investment?

From a report on the benefits of the system by Richard Boss, one understands that the initial cost is substantial. The average cost for implementing an ASRS...
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