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Case Study: Transportation aud Logestics The challenges and complexities faced by Fraser River Furniture as they evolve from a domestic, fo national, to international, to global supplier are explored. As you read thro Oh the case, think about issues relating to the use of proprietary versws for-hire carriers, as well as utilizing third-party logistics providers. Fraser River Furaiture Kelly Watt was not having a good day. Kelly is the transportation manager at Fraser River Fumiture. Located in the Vancouver area, Fraser River Fumiture manufactures and distributes both mass produced and custom furniture. They ship locally to retail stores as well as across Canada, into the United States and also abroad. The business was well known for its quality and exceptional customer service and as such he had a competitive advantage over their competition. Use of Canadian wood combined with their flair for design made Fraser River products attractive to discerning customers for both their regular production and custom designs. There were several other producers of fumiture in Westem Canada, but Fraser River was universally considered the best. Transportation and Logistics The company owned and operated their ows fleet of trucks. When the company was in its infancy this was the best way for them to manage transportation. Maanging their own fleet enabled thetn to coordinate both inbound and outbotand deliveries to save time, money and be as efficieat and effective as possible. Kelly took pride in the fact that transpoctation and logistics was maaually managed and coordinate in house. A transportation maangement system thas not ufilized Business was good and over a few short years their markets expanded from local to antional and most recently, international and offshore. Their customers used to be primarily local. Now their ctstotser base was local, national, isternational and offabore Coordinstion of trangortation and logistics at Fraser River Fumiture, under the current system and structure, had become Kelly Watt now likened the job to herding cats. The reasons for Kelly's bad day were many. Today's scheduled deliveries to customers were late, Some fleet trucks were experiencing mechanical issues, Others were flat out missing. Incoming deliveries of materials were late. The loading/off-loading schedule for their shipping docks were all incorrect. As a result there was a line of trucks on the shoulder of the road leading to the plant either trying to get loaded or trying to get off loaded. Kelly leaned back in the chair, looked out the office window across the shipping/receiving area. The complexity and manageability of Fraser River Furniture's transportation and logisties system had outgrown their systems functionality. Kelly knew there had to be a better way. Issues and Concerns Kelly had met with senior management and discussed how the transportation and logistics function at Fraser River had become exceedingly complex. Increased sales volume and expanded makets combined with late deliveries and an over budget transpotation system has placed their reputatiou and operation at risk. Late deliveries to local customers were becoming more frequent. National and international shipments were increasingly difficult to coordinate. The result was a drastic upsurge in transportation cost combined with an increase in the number of late deliveries. Kelly Watt came to the realization that the trasportation and logistics area of the business Areas of concern were around volume and speed of delivery. High volume items required fast delivery. The lower volume items could be shipped by slower less costly delivery methods. Custom orders were low volume, however, customer service required faster more expensive transportation options for these customers. The major problem facing Kelly was that the shipping transport/logistics infrastructure in place from the past was woefully inadequate to meet the present deminds of Frnser River Fumiture's customers. High volume items that should be shipped as cheaply as possible were becoming more costly to deliver as Kelly was forced to use local eontract or for hire carriers to deliver to meet deadlines: Lower volume items that used to be delivered via consolidated "milk runs" by Fraser's fleet trucks were now being transported by costly less than truck load carriers. This was doae in an effort to meet delivery deadlines. International shipments were being beld at the CanadaU,S. border due to incorrect, incomplete or missing documentation. Offtbore shipmients had the same issues of not being cleared at shipping ports in Vancouver. Once the paperwork was corrected, orders frequently needed to be flown out to meet delivery schedules Where to go From Here Kelly knew the timeline was shont to fix the trasportation and logisties issues at Fraser River Furnifure, It would not be loag until the increased trastyportation, Allipping and distribution costs would drastically impact profitabilify, Decensing levels of customer service and increasiag levels of late deliveries would roon drive customen to use otber fumiture manufnefuren, Kelly Watt knew there was technology avalable, in the form of transportation management systems, that would fneilitse their shipping and logistics ismes. There were slso third-party or isfecrated logistict iervice providers to help with logisties, shipping regulations and iatemational compliance issues and regulations. Kelly Watt knew that for Fraser River Furniture to contime to deliver quality fumiture, on time, a strategic mix of private and for hire tramportstion was needed. The complexity and divenity of the buniness had ontgrown their existing transportation and logistics system and struchure. Questions - Follow the Case Study Guidelines on Moodle 1. What is the problemulssue addressed in the case? 2. Dicuss the current isue at Fraser River Farmiture as it relates to FRF owning and operating their own fleet of trucks. Provide pros and coas, Areas to consider are the cost of maintenince, inanese, driver wages, licensing, and foel. 3. How can a traffie ianagement system help with both inbound and oubound shipmeats? How could an iategrated database that focused on tranyportation and logistics manageneat enhance coordination, consolidution, and control of the movement of geods? Be precise about these answers! 4. Prontize and resolve the isuses facing Fraser River Fumiture at they relinte to: A. Loeal thipplag and tratportation. b. National shipping inside of Canada c. faternational, US, shipenests. d Othoce ahipenent 5. What are the maia transportation inues nod challenges in each market