Lack of alternative to the new inventory technology
In the meeting, Debbie and Warren discussed with Jack the idea of purchasing a new system that would assist in there inventory handling and long term cost. He put forward the idea to purchase an AS/RS which he states will help to simplify, eliminate, automate, and integrate. . Automated Retrieval/Storage System (AS/RS) provides for the automatic placement and withdrawal of parts and products into and from designated places in a warehouse. Because of the tremendous labor involved in error-prone warehousing, computer-controlled warehouses have been developed. Jack also explains how beneficial one AS/RS would be, but elaborates that if there was two AS/RS’s they would be operating at a high capacity. Having two separate AS/RS would help increase the volume shipped at the same cost. However Liz is skeptical about the cost but Jack stresses that they need to consider the net present value and the return that they would gain from this new technology.
Recommendation – Only Purchase (1) AS/RS Unit while using a Layout Strategy
Jack is a representative from the company that sells the AS/RS and is pushing for them to purchase two AS/RS’s to make money the supplier. JSHLD suggestion is to only purchase one AS/RS which will allow then to improve shipping times and also have more efficient labor on hand. Each shift will have no more than two full-time supervisors and will rely on part-time employees working rotating schedules. Instituting the storage and retrieval system and increasing the number of bodies in distribution should minimize customer service gaps.
Reasons for any purchasing one system:
- Costly – It would be cheaper to buy one system and rearrange the warehouse more efficiently.
- Would pull personnel from other projects to work on integration.
- Moving parts makes it dangerous around the warehouse.
Warehouse layout Strategy
Warehouse layout is a design that attempts to minimize total cost by addressing trade-offs between space and material handling (Heizer, 2009). CanGo can use this management minimizes the sum of the resources spent on finding and moving material plus the deterioration and damage to the material itself. An important component of warehouse layout is the relationship between the receiving/ unloading area and the shipping/loading area.
In ware house layouts, random stocking can be used in warehousing to locate stock wherever there is an open location. Automatic identification systems (AIS) such as the AS/RS that Jack recommended can be used in the form of bar codes, to allow accurate and rapid item identification.
When automatic identification systems are combined with effective management information systems, Warren would know the quantity and location of every unit.
Issue: Lack of understanding of customer complaint procedure
“As the old saying “a picture is worth a thousand words” implies, often a “picture” of the process can quickly reveal inefficiencies and unnecessary steps in the way things are done” (Prentice-Hall, 2002). CanGo needs to develop a flow chart to better understand how customer complaints are handled. A flow chart is a schematic or drawing of the movement of material, product, or people.
Having a proper procedure of how complaints are handled will help to fix CanGo’s problem of customer complaint in their daily operation. The positive customer experience is essential for repeat business in any industry. “Customers of all types are emotional and tend to rate experiences based upon the expectations set” (Lieberman, 2011). Well designed complaint management enables the firms to know how they should behave when they are faced with customer complaints.
Benefits of proper customer complaint management include:
- Customer retention
- Brand reputation
- Operational efficiencies
- Improved communication
- Easy to implement
- Continual improvement
Below is a standard complaint flow chart which we recommend CanGo use to handle customer complaints. This flow chart is effective in not only understanding the proper procedure but completing the process in a timely manner.
Image: Frontier UK. (Producer). (n.d.). Customer complaints procedure. [Print Graphic]. Retrieved from frontersupport.com/index.php?option=com
Heizer, J. (2009). Operations management. (10 ed.). Prentice Hall.
Lieberman, M. (2011). Importance of positive customer experiences. Retrieved from http://mjayliebs.wordpress.com/2011/05/18/the-importance-of-positive-customer-service-connections/
Murray, M. (2010). Planning your warehouse layout. Retrieved from http://logistics.about.com/od/forsmallbusinesses/a/warehouse_plan.htm