Walton Seed Company is a high quality seed company whom is selling grass, flower, and vegetable seeds. The demand for the seeds is increasing. In order to fulfill orders for different customer need, Walton nowadays must provide various services to satisfy customers. Walton should achieve the 7Rs in logistics concept, right product of right quality and right quantity delivered to the right customer in right time and right place with the right cost.
The seed business is such that sales are traditionally very heavy in the spring and early summer and drop off dramatically for the rest of the year. During this period, Walton faces shortage problem with certain types of seeds. It is because the wholesalers and retailers buy large quantities prior to start of the season without evaluate the customer need.
With the growth of Wal-Mart, Home Depot, Lowe’s, and others of similar size, Walton does not sell to those stores, directly or indirectly because she targets distribute through small, family owned hardware and variety stores.
Facing demanding customers, Walton must equip herself well with customer services in order to offer the best tailor made services, provide fast, stable supply and reliable delivery and make up close relationship with customers.
Brief description of the case / business
The case is based on the current situation of Walton. The company CEO, Lisa William requests Jason Greaser, the new director of logistics to improve the customer service levels and inventory turns. Walton also wants to increase late summer and fall sales of grass seeds and perennial flower seeds, to spread out demand and avoid stockouts.
The aims of this case study are
1. Improve in-season sales forecasting and develop a logistics system that is more responsive to demand and sales. 2. Find the best logistics solution when Walton faces to the mass merchandisers. 3. Advise the standards to measuring the performance of customer service. 4. Advise the e-commerce alternatives to increase work efficiency.
1. Improve sales forecasting and develop a logistics system
An effective sales forecasting will lower the costs of inventory, production planning and transportation. To improve sales forecasting, we need focus on three major parts, it included JIT (Just in Time) – Upstream logistics activity, MRP (Material Requirement Planning) – Midstream logistics activity, DRP (Distribution Resource Planning) – Downstream logistics activity.
JIT is an integrated set of activities designed to achieve high-volume production using minimal inventories of raw materials, work-in-process, and finished goods. Parts arrive at the next workstation “just in time” and are completed and move through the operation quickly. JIT is also based on the logic that nothing will be produced until it is needed (Chase, R. B., Jacobs, F. R., Aquilano, N. J., 2004: 426-427).
JIT production is a type of upstream logistics activity, where rather than having goods pushed through production and supplying customers from stock, it depends on customers request to pull goods through the production system. JIT processes focus on producing exactly the amount required at exactly the time customers require it. This minimizes the slack that can exist in many areas across a business.
JIT system of inventory stocking has advantages. Having large amounts of reserve seeds that if there are peaks in demand, the business can keep supplying customers and not fall short, thus taking advantage of any profitable opportunities that may arise.
As seeds would be made to order, if not for individual customers, then at least made to be ready for the exact time that Walton would ship it to the retailers or wholesalers. The seeds would immediately be put on the shelves for sale, dramatically reducing the lead time between production and consumption. For example, in the fashion industry, this could result in lines being produced every month rather...