Eco Bottle

You have just been hired as

the Director of Logistics for Eco Bottle (EB). In your new role, you will have

responsibility for general logistical planning including functions such as

inbound and outbound freight and any logistics-related functions within EB.

EB is a ten year old Canadian

manufacturer of premium refillable water bottles. EB is located in Winnipeg

Manitoba where their manufacturing facility, warehouse, and administrative

offices are contained within a single building. EB employs seventy staff

members, 35 of them dedicated to manufacturing, 15 to warehouse operations, and

the remaining 25 in various administrative positions.

EB has positioned their

product in the 'premium' category and is enjoying year over year growth. Their

primary product is a 750 ml refillable water bottle that is manufactured using

two primary raw materials: stainless steel for the body of the bottle and high

density plastic for the removable lid. EB has spent considerable effort on

research and development and the bottle is considered to be industry leading in

its ability to maintain both hot and cold temperatures.

75% of EB's sales are done through

an online distributor called Skyway who maintains distribution centres in

Calgary AB, Mississauga ON, and Montreal QC. Skyway specializes in selling

athletic and outdoor goods direct to Canadian consumers and uses small package

providers and couriers to provide a one or two-day delivery to most Canadian

households. EB currently ships product over the road to Skyway's distribution

centres and if ordered in TL quantity, EB pays for the freight expense. When

LTL quantities are ordered, EB charges the freight expense to Skyway. The

remaining 25% of sales are done through a small group of boutique specialty

stores across Canada that have requested the product specifically to stock.

These sales are normally low volume and shipped via a small package or courier

service to the boutique specialty store

Business Case Assignment Part two :

EB's primary method of

shipping goods to Skyway is via TL service. When shipping in TL quantity, EB

has paid the freight expense. Skyway represents the majority of EB's sales and

Skyway has recently been pressuring EB to provide LTL service at EB's expense.

Skyway often has larger inventory volume than they require and this requires

storage space that could be used for other, fast moving products.

EB's management is concerned

that they may lose Skyway as a customer if they don't provide LTL service at

their own expense. In anticipation of this, you have received estimates from

three large LTL carriers. Each carrier has classified the product at different

levels.

The management team is not

familiar with freight classification systems and has asked you to provide

clarification on what this is and how it might impact LTL service. In addition,

the management team has requested that you provide a summary of the impacts on

the product during transportation and any administrative or operational

changes.

Specifically, you have been

asked to:

1.Provide

a summary for the management team of the factors that influence freight

classification and what the impact of a different classification would mean to

EB.

2.Discuss

the impacts of a change from TL to LTL service on the product (such as

handling) and the organization (such as administration and internal processes).