CASE STUDY

George is a small business owner. He started his company in 2019 with only 2 employees and is now experiencing some growing pains. He goes to an entrepreneur convention and speaks to a couple other business owners.

Georges Company/Product Info

He has an ecommerce company (where he outsources manufacturing to suppliers overseas) offering Sleep Eye Masks to customers via his website. He has a unique product offering to customers that does more than the traditional eye mask. It actually encourages you to sleep in a personalized way vs other sleep masks that only provide black out/darkness. He started his company with one product, but now in 2023, he now offers 12 SKUs (6 different colours in two sizes). He has had to search for a secondary manufacturer to assist with growing capacity. The lead time on a purchase order is about 90 days for production, and about 7 days in transit by air to the warehouse.

He now has 12 employees consisting of a Marketing team of 6 (advertising and digital ads, Brand, Graphic design) a Finance/accounting team of 2, customer service team of 3 and an Operations team of 2 (an Operations Manager and a Supply Chain Coordinator). In addition to this, as he has a neuroscience background, he has other ideas for new products and is thinking of adding to his team to bring some product design in house (consisting of an R&D and engineering team) to continue with his personalized and unique product offering.

George is selling on his ecommerce site to the USA market and has a warehouse in California as it is closest to his customers on the West Coast.

Up until this point, Georges team has been using Google Suite (google Docs/sheets) for all processes and information tracking. The only more complex Operations/Supply Chain information system that is being used is access to their 3PLs WMS system.

George speaks to some other members at the convention.

Amy owns a small restaurant. She offers inexpensive street tacos at a small hole in the wall place. Her customers love coming to her restaurant for an inexpensive, cozy and tasty quick bite to eat. She has trouble with ordering and always runs out of food before the night is over. She doesnt order much in order to keep her costs low. She uses an e procurement system to order groceries for her restaurant kitchen.

Bill has not yet started a company yet, but is looking into options for starting a business in providing restaurant owners with last minute groceries. He already owns a warehouse/storage location and delivery trucks and wants to use them to offer quick/flexible services to restaurant owners that require last minute deliveries. This way, he is able to store lots of buffer stocks so restaurant owners dont have to. His goal is to provide quick and amazing service to his customers.

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QUESTIONS

Q1. Based on what you know, provide a mini size up of the 3 business owners scenarios (3 points for George, 2 points for Amy and Bill total 7 points).

Mini Size Up

Operations strategy (differentiation, cost, response)

Sustainability?

Trade offs at functional levels

Supply Chain must work together act as one unit

Service or product company?

Industry/product requirements (seasonal, expiration, storage conditions, multiple SKUs, technical requirements, organic certifications etc)

Processes: list out, problems, who is involved, and what data/info needed

Q2. Amy is confused with what a WMS system is - what is a WMS (2 points), what is the importance, and why do some companies use it while others (Amys company) might not?

Q3. George is intrigued by Amys shortage of food situation. She mentioned she uses an eprocurement system to order her groceries and orders everything by herself. She is unsure how to improve.

George doesnt use an e procurement system and asks Amy questions - what is an eprocurement system and how can it help Amy regarding her company strategy (2 points)?

George says his system involves forecasting the projected number of masks sold per day and thinks a similar process might be beneficial. Help George explain how Amy can incorporate demand planning (2 points) and why it can help her issue (1 point).

They discuss inventory turnover as an important performance measure. Is Amys inventory turnover too high or too low? Explain. (2 points)

Q4. While discussing information systems, Bill suggests an MRP to George. George doesnt currently use one and needs a refresher on what it is and how it might or might not be helpful for his business (3 points).

Q5. None of these business owners are large enough for an ERP but they discuss some benefits that it might provide in the future. Name some benefits (2 each) for each of their respective and different businesses that an ERP might provide (6 points). Think into the future when their system and processes may become more complex. You can make some assumptions. TIP: what individual modules/softwares would be useful & what processes are specifically important to them?

Q6. Explain what supply chain visibility is and why it might be especially important for George (3 points).

Q7. Bill is curious about why George might ship products from his supplier to the warehouse by air freight. George says it's tricky, there are trade offs with this decision. Explain what George means by this and why he might ship his products by air (3 points).