Case study: Another transformation of logistics activities for TasBrand?

It is another warm day in Tasmania as Elisee, the Logistics Manager at TasBrand stares out her office window at the super-sized buildings that house the production and warehousing activities of the company. Elisee feels a sense of pride as she reflects on the five-year journey of sourcing and developing strategic relationships with trustworthy suppliers, adopting new technologies in the production and warehouse, and becoming a trusted partner themselves to the many retailers who stock their products. Elisee was employed five years ago to transform and modernise the logistics operations and change TasBrand's culture to become more customer focused. As Elisee leaned back in her chair, she smiled as she recalled the once common joke among the production, warehouse and even the logistics staff that without suppliers and customers the company would be more efficient. She still recalled Semester 1-2023 JNB522 Business Logistics Page 3 of 4 Pages the look of shock on the faces of all the 500 employees when she announced they would all undertake customer service training as part of the new People First program to improve relationships with internal and external customers. Rapid improvements were also made to quality management procedures and internal/external communications resulting in profits steadily improving. TasBrand was continually receiving awards and recognition for the transformation of their logistics practices and the high performance of their People First program. Elisee's smile disappeared as she then thought about the last six to twelve months, how times had changed dramatically in such a short period of time. TasBrand is located in a regional area of northern Tasmania, not far from Launceston. Over fifteen years ago, TasBrand had been fortunate in purchasing a large recently re-zoned land close to the major highway, rail, and airport that enabled effective logistical connections. As a result of the growth from five years ago, TasBrand now operates seven days per week conducting three major activities: 1. receiving raw wood materials for open yard warehousing and then transport to Tasmanian and Australian furniture manufacturers; 2. using 70 per cent of the received raw wood materials combined with a range of related components from suppliers for TasBrand's own timber furniture manufacturing activities that are warehoused ready for transport to furniture retailers nationally; and 3. receiving large volumes of 1,200 product lines of household merchandise including toys from Australian and international suppliers that are held in TasBrand's warehouse for distribution to retailers in Tasmania and most States of Australia. Elisee is somewhat startled by the knock on her door by Eva, the Procurement Manager. "Elisee, just a reminder that your meeting with Joseph the CEO, and the Senior Management Team begins in five minutes" she said. This was the meeting that Elisee had been dreading. With the positive attention TasBrand had been receiving in the media for the first four years since implementing their transformation program, other similar competing businesses had set up in Tasmania and other neighbouring States such as Victoria and South Australia applying some of the logistical systems, customer service training programs, and supplier relationship methods initially developed by TasBrand. In addition, their competitors had taken advantage of the emergence of Industry 4.0 technologies and systems that had not been available for TasBrand when beginning their logistical and business operations transformation. To compound the challenges of the last six months in particular, Elisee had discovered that several of their 'trusted' suppliers from overseas had been using child labour to produce a range of products such as the toys TasBrand provided to the retailers. This resulted in adverse publicity from the local community who were quick to remind Elisee that in today's world that modern slavery and child labour were unacceptable. Questions were also being asked on whether TasBrand and their suppliers were undertaking their business in an in an ethical manner using sustainable and circular economy practices. Elisee shook her head as she recalled having been surprised with the high standards required by the Volvo Group for companies requesting to be a Volvo Group supply chain partner. Although impressed with the high-level requirements shown in the Volvo Group's Supply Partner Code of Conduct, Logistical Requirements and many other related standards, she had considered that it would take too much effort to negotiate these terms with TasBrand's suppliers. If only Semester 1-2023 JNB522 Business Logistics Page 4 of 4 Pages she had followed her instinct to apply best practice supplier relationship methods. In the senior management meeting only two days ago, Elisee had been instructed by Joseph the CEO to provide reasons why the events of the last six to twelve months had occurred without the senior management team being fully briefed, and to provide a plan on how to return TasBrand to the national leader it once was. Joseph was adamant that their business operations must be upgraded using Industry 4.0 technologies, particularly in the extensive warehouses, even though this would result in 120 employees being made redundant. Further, Joseph required all their operations to be applying the so-called green logistics practices, and to ensure that their inbound and outbound logistics activities were applying sustainable practices. Elisee recalled that just before she left that meeting that Gaurav the Finance Manager said he was keen to reduce costs and wanted an assessment on whether outsourcing was an option to explore. Elisee begins to stand up when Eva once again knocks on her door and says Joseph, Gaurav and the senior management team are all in the board room. As Elisee walks along the corridor, she is hopeful that the plan that she and her colleagues in the Logistics Department developed will be acceptable. Elisee was already beginning to be very concerned about how the news would be broken to the staff, government, local community and the media about the loss of 120 jobs, that could increase to 220 if the senior management team decided to outsource the production activities. Elisee wondered how this would reflect on their highly acclaimed People First program.

write a document (in essay format) for Elisee to provide to Joseph the CEO at the senior management team meeting that explains:

a) If outsourcing is a strategy to be adopted by TasBrand, explain the major benefits and major challenges for TasBrand. In addition, discussion should include which of their current logistical activities would be the most appropriate to outsource, and whether more advantages can be gained if outsourcing occurred interstate (for example to South Australia) as opposed to another country. [15 marks]

b) Why it is necessary for TasBrand's suppliers to adopt sustainable practices in which no modern slavery or child labour is employed, and suggests how this can be achieved. [10 marks]

c) How Industry 4.0 technologies can be implemented throughout the range of logistical activities undertaken by TasBrand, their suppliers and retailers. Also include how the product recall of the toys made by child labour provided by international suppliers could have been made more efficient and effective if those Industry 4.0 technologies had been available. [15 marks]