 Audio Duplication Services, Inc.

(ADS)

Presented by
• Arka Jyoti Paul
• Rajesh Kumar
• Muggi Sowmya
• Kondala Prabhavati
• Rani Garg
 Introduction
Introductionto
toCase
Case

 ADS
ADSInc.
Inc.isisaacassette
cassetteand
andCD
CDduplication
duplicationand
and
distribution services provider.
distribution services provider.


 Three
Threemain
mainparties
partiesindulged
indulged: :
a)a)ADS
ADSInc.
Inc.
b)b)Big
BigRecord
RecordCompanies
Companies
c)c)Large national retailers
Large national retailers
 CURRENT SITUATION
Record
(order) companies

Orders are placed

ADS
ADSInc.
Inc.

Shipped (Different shippers ,Arm length’s transaction)

Large retailers‘ distribution centre

Large retailers‘ distribution centre

order Finally reaches

Retails
Retails
 Requirement
Requirement of
of Record
Record Companies
Companies

Large record
Large record
companies
1. Direct shipment companies

Orders
2. VMI implementation Orders

ADS
ADS
VMI implementation
VMI implementation

stores stores
stores stores
stores stores
stores stores
 Options to evaluate
 Purchase
Purchase fleet
fleet of
of trucks
trucks to
to supply
supply to
to retails
retails
-- Costly
Costly deal
deal

 3PL
3PL implementation
implementation :: Entire
Entire shipping
shipping

 Take
Take aa decision
decision of
of taking
taking trucks
trucks on
on lease
lease
(( from
from warehouse
warehouse toto retailers)
retailers)
 Q1: Why are ADS customers’ customer
moving towards VMI arrangements?

 High inventory holding cost at retails.

 Unnecessary maintenance cost for

Distribution Centers.
Q2: (a)How will this impact ADS’s business?

 Increase
Increase in
in shipping
shipping cost.
cost.
 Increase
Increase in
in inventory
inventory holding
holding cost.
cost.

(b) How can ADS management take advantage of

this situation?

••Result
Result in
in global
global optimization.
optimization.
••Reduce
Reduce bullwhip
bullwhip effect
effect maintaining
maintaining high
high service
service level.
level.
•• Strategic
Strategic alliance(3PL)
alliance(3PL) can
can be
be coordinated
coordinated with
withVMI
VMI
Q3: How should ADS manage logistics?

 Logistics is not a core competency of ADS

 More crucial issues to deal with for ADS
 ADS Inc. should have strategic alliances.(3PL)

ADVANTAGES OF USING 3PL Provider:

 Geographical location flexibilities.

 3PLs generally have greater negotiating leverage with carriers
 3PLs offer superior information services
 Expedited delivery & team trucking
 3PLs offer greater shipment control through vendor relationship
management 
 Large record
Large record
Suggested
Suggested companies
companies
Model
Model (Orders)
(Orders)
ADS
ADS

(Strategic alliance here onwards)

(Strategic alliance here onwards)

Warehousing VMI
Warehousing VMI

stores
stores stores
stores stores stores stores
stores stores stores
 Q4: Why are the large national retailers moving
toward a direct shipment model?

 Unnecessary complexity of handling Retailer’s Distribution Center

 Reduce the inventory holding cost

 Reduce further transportation costs for the retailers