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    University of Nairobi: School of Business Bcom Dps 301: Supply Chain Management Assignment JAN-APRIL 2015

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    vincent peter
    AWS is a manufacturer of racking and storage systems that provides turnkey warehouse solutions. It faces increasing competition and costs pressures. Its objectives are to expand its European presence, reduce costs, and expand bespoke services. The managing director expressed concerns about more demanding regulations, operating at full capacity, delays in distribution disrupting schedules, supply disruptions, rising transport costs, and a more diverse supply base. Functional directors were asked to report on these issues and recommendations to address them.

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    University of Nairobi: School of Business Bcom Dps 301: Supply Chain Management Assignment JAN-APRIL 2015

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    vincent peter
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    AWS is a manufacturer of racking and storage systems that provides turnkey warehouse solutions. It faces increasing competition and costs pressures. Its objectives are to expand its European presence, reduce costs, and expand bespoke services. The managing director expressed concerns about more demanding regulations, operating at full capacity, delays in distribution disrupting schedules, supply disruptions, rising transport costs, and a more diverse supply base. Functional directors were asked to report on these issues and recommendations to address them.

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    AWS is a manufacturer of racking and storage systems that provides turnkey warehouse solutions. It faces increasing competition and costs pressures. Its objectives are to expand its European presence, reduce costs, and expand bespoke services. The managing director expressed concerns about more demanding regulations, operating at full capacity, delays in distribution disrupting schedules, supply disruptions, rising transport costs, and a more diverse supply base. Functional directors were asked to report on these issues and recommendations to address them.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    114 views3 pages

    University of Nairobi: School of Business Bcom Dps 301: Supply Chain Management Assignment JAN-APRIL 2015

    Uploaded by

    vincent peter
    AWS is a manufacturer of racking and storage systems that provides turnkey warehouse solutions. It faces increasing competition and costs pressures. Its objectives are to expand its European presence, reduce costs, and expand bespoke services. The managing director expressed concerns about more demanding regulations, operating at full capacity, delays in distribution disrupting schedules, supply disruptions, rising transport costs, and a more diverse supply base. Functional directors were asked to report on these issues and recommendations to address them.

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    of 3

    UNIVERSITY OF NAIROBI

    SCHOOL OF BUSINESS
    BCOM
    DPS 301: SUPPLY CHAIN MANAGEMENT ASSIGNMENT
    JAN-APRIL 2015

    ADVANCED WAREHOUSE SYSTEMS: INCREASING COMPETITIVENESS

    Introduction
    Advanced Warehouse Systems (AWS) are manufacturers of racking and storage systems
    for a range of industrial applications. Established in 1980, by a sales director and
    financial director from the then market leader, the company recognised the growth
    potential of the logistics industry in relation to international supply and distribution and
    the need for flexible-modular systems for warehousing requirements. The product range
    includes bought-in items such as racking, shelving, and storage products, though the main
    turnover comes from bespoke products, made at a manufacturing facility located in the
    north-east of England.
    This facility deals with special order projects, for applications in adverse environments
    (for example, chemical or bio-hazard) or where a high degree of automation is required
    (for example, mechanical picking operations).
    Operations
    The head office is located in central England, where the design, research and
    development, marketing, sales, finance and IT functions are housed. Each site is
    responsible for its own purchasing and human resources.
    AWS provides turnkey (all inclusive) solutions directly to its customers. The turnkey
    solutions are managed by regional project managers situated throughout the UK and

    Europe. Alternatively, it supplies products to approved installation firms, which deal with
    smaller contracts.
    The markets are predominantly UK and mainland Europe, with an increasing shift
    towards Eastern Europe being noted due to increased industrialisation and consumer
    activity. Transportation of the product is generally by road haulage and via ports where
    required.
    Information Technology
    AWS has introduced an intranet to share project information within the company. This
    has improved the transfer of data between the functions; but has it failed to deliver the
    expected benefits of quality improvement (from better document control) or cost (from
    improved project planning). On-site data capture is shortly to be introduced which will
    mean time from site survey to design completion will be further reduced, if correctly
    operated.
    The Business Environment
    Competition has increased in the budget sector of the market due to accessibility and
    improved quality of Far East sub-contract manufacturers. Additionally, margins have
    been squeezed due to the rising price of raw materials and the rising costs of paint
    finishing due to environmental control pressures.

    With increased outsourcing of warehousing and distribution there has been a rise in
    specialist logistics companies, which are now gaining buyer power due to their increased
    size.
    The Objectives of the Business
    AWS has identified three key objectives for the next three to five years:
    development of the mainland European presence and the establishment of a permanent
    operations office in Germany
    a reduction in costs of 2.5% year-on-year to protect margins
    expansion of the bespoke services provision, where differentiation by technical ability is
    likely to protect margins

    Supply Chain Concerns


    At a meeting of the board of directors the managing director expressed the following
    concerns for AWS:
    1. Regulatory requirements of the industry are more demanding. There is more
    emphasis on health and safety, and the financial implications of employing
    sub-contracted labour. Differential legislative practices across Europe are
    proving difficult to manage with regard to these factors.
    2. The current manufacturing sites are operating close to capacity.
    3. Contracts have started late due to delays in distribution of the product; these
    delays have been experienced due to incidents of industrial action at ports
    and increased customs controls.
    4. Supply disruptions to certain raw materials have disturbed production
    schedules raising a requirement for overtime working and associated
    additional cost.
    5. The transport fleet costs of operation are steadily rising due to fuel, wage,
    maintenance, licensing and insurance costs.
    6. The diversity of projects being undertaken (from a technical perspective) has
    increased the supply base substantially.
    The managing director has asked the functional directors of the organisation to report
    back on aspects of the above with their recommendations on how to address.

    Questions
    1. Explain how AWS might identify, select, and manage appropriate suppliers for

    TWO significant potential outsource activities. (25 marks)


    2. Discuss any identifiable key performance indicators in the above case and explain

    how they can be applied to improve organizational performance (25 marks)

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