Question No 3: As Brad Twiddy, what options would you recommend to Greg and what would be your schedule to evaluate
these options and implement your plans?
DC Capacity
DC Areas Pick and Pack High Cube Yard Capacity(in 000s cubic feet) 75 130 210
Forecasted Demand
DC Capacity Analysis (in 000s) 2007 2008 217 261 204 250 238 288 281 365 224 302 194 258 240 320 284 382 260 337 352 443 280 340 217 258
January February March April May June July August September October November December
2009 315 292 385 442 345 298 360 420 385 523 400 317
2010 413 385 452 500 431 331 460 545 496 636 440 350
PICK AND PACK CAPACITY ANALYIS
According to the forecast there will be no space constraint in pick and pack area except for two instances in late 2010.
January February March April May June July August September October November December Pick & Pack Capacity Analysis (in 000s) 2007 2008 2009 54 52 47 27 33 38 31 38 50 20 26 31 20 27 31 21 28 33 29 38 43 40 53 59 34 44 50 49 62 73 36 44 52 39 47 57 2010 62 50 59 35 39 36 55 76 65 89 57 63
HIGH CUBE CAPACITY ANALYSIS
In High Cube area there will be severe capacity shortages from July 2010.
January February March April May June July August September October November December High Cube Capacity Analysis (in 000s) 2007 2008 2009 87 117 158 108 133 155 138 167 223 121 157 190 94 127 145 93 124 143 108 144 162 131 176 193 119 155 177 180 226 267 162 197 232 113 134 165 2010 207 204 262 215 181 159 207 251 228 325 255 182
YARD CAPACITY ANALYSIS
In Yard area there will be severe capacity shortages from April 2009.
January February March April May June July August September October November December Yard Capacity Analysis (in 000s) 2007 2008 2009 76 91 110 69 85 99 69 84 112 140 183 221 110 148 169 79 106 122 103 138 155 114 153 168 106 138 158 123 155 183 81 99 116 65 78 95 2010 145 131 131 250 211 136 198 218 203 223 128 105
Recommendations to Greg
As discussed earlier TSC should keep the year around SKUs in house and will try to outsource the seasonal and highly seasonal SKUs in short run. Outsourcing is the short term strategy for TSC and for achieving objective of project 275 i.e. service level of 92% and reducing shipping cost it should build a new DC in the new market. For FY 2008 TSC should outsource some capacity of Yard and High Cube area SKUS to 3rd part logistic provider. At the same time it will try to build a new DC in the new market which will cater the requirements of new stores.
Yard area SKUS it should accommodate in the new DC. We purposes that TSC should build the DC phase wise manner. The Phase wise manner will help TSC to reduce unnecessary fixed cost like maintenance cost of High cube and Pick and Pack area without any use.
New DC Area Yard High Cube Pick and Pack Completion Time April 2010 July 2010 Dec 2010
They should implement ERP system and integrate the DC and stores inventory information to address the issues of stock out for some SKUS and high inventory for others. They should try to integrate their inventory information system with their supplier so that real time inventory information can be available to suppliers. It will reduce the stock outs at DC level.
