SITUATION 1 EZL PURCHASING AND DISTRIBUTION Background EZL was founded 20 years ago as an outsourced storage and distribution contractor. However, due to increased competition within the outsourced logistics sector caused by the growth in large consolidated organisations, EZL has been forced to find other services that would add value to its storage and distribution function. As a result of this, EZL has been providing purchasing services for several different organisations for the last five years. The organisational structure is very flat, with one operations manager managing both the buying operation and the storage and distribution operation. However, two recent events have convinced Harriet Smith, the managing director of EZL, that it is time to change. o The number of customer complaints regarding late deliveries has increased. o A major existing customer, Chemco, has approached EZL with a proposal to expand its current requirements by purchasing and distributing palletised dangerous products. These products include garden and commercial weedkillers, bleach, household cleaning chemicals and paint thinners. These products would be purchased and stored in bulk by EZL and then delivered in quantities varying from full vehicle loads to mixed pallets depending on client demand. Harriet Smith has employed a management consultant to review EZL's current operation and suggest areas for improvement. The Current Operation EZL currently operates out of a site on the edge of a city that contains both the head office and buying functions, as well as the storage and distribution function. The buying function currently deals with over 200 suppliers and buys products as diverse as maintenance repair and operations (MRO) items, stationery and tinned food products. Goods are bought on behalf of customers and are delivered to the warehouse, where they are either cross-docked for full pallet deliveries or put into the storage racks in order to be picked in smaller quantities depending on client demand. The orders are then loaded onto EZL's own fleet of 20 tonne rigid vehicles for delivery to customers. However, as the operation has expanded it has encountered several problems, which are starting to have an impact on the current operation: The warehouse site is owned by EZL and was acquired 12 years ago, when EZL used to offer some ad hoc warehousing to some of its then clients. The warehouse is located on a site that was formerly part of a factory complex that had ceased trading. There is currently no room for expansion on the current site. Recent building development has led to an increase in congestion around the area. This has begun to delay EZL's vehicles. At goods-in there are three docks and up to 30 lorries waiting at any one time. These include EZL's own vehicles waiting to unloadreturns/backhauls (collections from suppliers) and empty equipment from stores and suppliers. The vehicles arrive at random times, allowing for no planning. At goods- out there are five docks that are empty for parts of the day. Internally the warehouse is congested, with large amounts of floor space being taken up with stock waiting either to be checked by the goods-in inspectors, or put away on the racks after they have cleared inspection. However, the racking locations are of a fixed height, which means that often pallets of product are left on the floor, because there are no slots of the right size to accommodate the pallets, and this has led to stock being damaged by mechanical handling equipment (MHE). The storage system is also fixed, with different parts of the warehouse allocated to different products, which has led to some areas being under-utilised while other areas are full. The warehouse computer system is over six years old and only supports a fixed location system. The system also does not update stock records in real time, so the stock data is always out of date. The internal congestion in the warehouse is causing delays in the picking and cross docking operation, which exacerbates delays in loading and unloading vehicles. The racking is also very widely spaced, as most of the current MHE consists of counterbalanced forklift trucks, which have a wide turning circle and cannot reach to the full height of the current building. As such 25% of the available height is currently not being used. Staff and Facilities At present the warehouse stores and handles non-dangerous goods. Staff records show that neither the warehouse staff nor the current drivers have undergone any training on storing, moving or handling dangerous goods, and no one has been appointed as the dangerous goods safety advisor. The warehouse only has a limited fire control system and both the vehicles and the warehouse do not currently contain equipment required to deal with a dangerous spillages. The information in this case study is purely fictitious and has been prepared for assessment purposes only. Any resemblance to any organisation or person is purely coincidental. QUESTION 1 Question 1 relate to the case study and should be answered in the context of the information provided. Analyse the measures that can be taken to improve the efficiency and effectiveness of the storage and distribution (i.e. inbound and outbound) operation at EZL. (25 Marks)QUESTION 2 Discuss, using examples, how the efficiency and effectiveness of a warehouse can Be Affected by the choice of handling equipment. (25 marks