QUESTION 1

You are strongly advised to read carefully and analyze the information in the case study before attempting parts (a) and (b)

National Transport Ltd (NTL) is an outsourced supplier of transport and distribution services. It is a national company with many different sites and a diverse customer base. One of its many contracts is for the storage and distribution of retail items for a chain of convenience shops (food, cigarettes and other non-food items). Currently the contract comprises of one warehouse and a fleet of 10 vehicles, which serves 40 shops scattered throughout the island

The retailer, Top Retailer (TR) has 30 shops which are open between 6am and 10 pm and 10 shops are open 24 hours a day. TR also has plans to double its number of shops within the next five years

The contract with the retailer was won six months ago, and NTL was required to start operation at very short notice (eight weeks) and so had to act quickly to set the operation up. Due to time constraint, NTL rented a vacant, pre-built warehouse for the operation, and also recruiting staff quickly so that the operation was ready to begin on the contract start date

During the last few months NTL has received several complaints from TR regarding its performance. These complaints relate to delivery performance and stock accuracy. As NTL is keen to keep the contract, it sent one of its supply chain consultants to investigate current problems and suggest solutions. The consultant examined the operation and found the following-

The Current Operation - Warehouse

At the receiving area there are 4 docks and up to 15 lorries waiting at any one time. NTL currently deals with over 125 suppliers of products and these are delivered to the warehouse by the suppliers' own vehicles. One of the main problems at present is that vehicles arrive at random times, allowing no planning. The goods-out area has five docks that are empty for long periods throughout the day.
Internally the warehouse is congested, with large amounts of floor space being taken up with stock either waiting to be inspected in by the goods-in controllers, or waiting to be put onto racks after inspection. The racking was already installed when the building was taken over by NTL, and the locations are of fixed heights, which means that pallets are often left on the floor because there are no slots high enough to accommodate them

The warehouse manager also highlights other areas that are of concern. Several products are not in the right location, some boxes have been opened, and much of the stock is scattered around, making it difficult to identify the precise quantities within each location. Further, the cigarette store is unlocked, which allows open access. There are also pallets of products stacked in the aisles, which not only impedes access but also blocks the view of the aisles from the offices which are located on the edge of the warehouse

On his tour of the warehouse the consultant also found someone roaming in the warehouse. When questioned he made the excuse that he was lost. Upon investigation it was found that the security gates stop all vehicles, but visitors coming on foot are not escorted onto the premises. Some of the perimeter fencing is in a poor state and it contains several holes

The consultant then went to talk to the human resources (HR) department, where it was explained that many of the staff be it drivers or helpers who work in the warehouse had been recruited via an employment agency and the HR department is also uncertain whether background checks had been carried on the staff by the employment agency

Transport

NTL operates its own fleet of 25 rigid vehicles and currently delivers to the shops between the hours of 10pm and 6am, as this enables the shelves to be replenished before the main flow of customers comes through the doors. It also enables the delivery drivers to avoid many of the restrictions that do not allow deliveries to some of the shops between the hours of 8am to 6pm

However, these delivery times are causing the transport operation several problems. It makes it difficult to optimize the use of the vehicles, as all the deliveries take place within a short timeframe. Not all the shops are open 24 hours, so drivers have to deliver some shops when they are closed, using a master key to gain entry. They have to offload the delivery into the shop and then lock up afterwards. This has led to a number of issues, one of which is an increase in the number of complaints regarding stock shortages from managers whose shops receive deliveries when they are closed

(a) Discuss the improvements that should be made to NTL's storage and distribution function so as to improve the service to TR

(b) Explain the potential security issues within NTL and justify methods that could be used to overcome these security issues

QUESTION 2

Explain, using examples, FIVE ways that the storage and distribution function can add value to an organization

QUESTION 3

Discuss how the efficiency and effectiveness of a warehouse can be affected by the choice of handling equipment

QUESTION 4

Evaluate the contribution that ICT can make in developing an effective storage and distribution operation