Sun Magnet Corporation (SM) is a large European manufacturer of industrial solar panels. They have a distribution network throughout Europe and would like to expand their distribution to North America, with Canada being one target for next year. They would like to have a distributor in Calgary, Alberta. Their solar panels are designed for the industrial market and not residential use. Hospitals, large commercial developments, and condominium complexes are their target market. Each single unit/panel can provide sundry power for a 200,000 square foot facility. They are only installed by authorized personnel in Europe, and the warranty is void if a dealer is not involved. They have three panel sizes: a) 3x9 Weighting 300 kg including packaging b) 4 x 12 Weighting 500 kg including packaging c) 4 x 24 Weighting 950 kg including packaging Worth $22,000 USD wholesale Worth $35,000 USD wholesale Worth $55,000 USD wholesale All dimensions above are given in feet. (Add 2 inches per dimension for packaging). All of the units are 4 inches thick. Panels that are the same sizes/units can all "plug" into one another, so they are expandable. Different size units do not have this feature. (i.e. a 3 x 9 will not plug in to a 4 x 12 etc.) Each panel and related electrical transmission "component" is made up of over eighty parts. These parts are inventoried in low quantities, as technological improvements can make them obsolete. Finished panels are individually wrapped in plastic film, then wrapped in flexible corrugated paper, and then crated in a corrugated box. Each single panel assembly (with parts for installation) is composed of three boxes. One is the panels, the other two are each: 12 x 12 x 12 inches, and 26 x 3 x 24 inches. Each box is clearly marked with only the following items: This side up Photo-electric solar panels Handle With Care, High Value Box 1 of X PO number For the purposes of this case study, the standard for order lead-time from the DC/warehouse in Canada is two days, including order processing, excluding transit time. The estimated transit times are as follows for all the modes. Transit Times Ex Works S.M's European Manufacturing Plant to Calgary: Via Air Calgary 4 Sea FCL 22 Sea LCL 24 Transit times within Canada for LTL or LCL shipments (in days) to major Canadian cities from the Calgary DC/warehouse: For Full Truck load, or full Container load, deduct 25% from the times shown below. From Calgary/Edm Montreal 4 Toronto 6 Winnipeg Calgary/Edmonton Vancouver 6 1 3 Currently, SM's manufacturing plant needs 12 weeks lead time to produce an order for less than 8 units. Anything more than 9 units the lead-time is extended by 1 week. The plant has the capacity to produce 150 panels per week. Sun Magnet has had some issues with the product in shipping within Europe, and the units are arriving at the building site defective. The issues are invisible to the carrier, and are only noted when the Licensed/ Authorized installer arrives on site to do the installation. Installation is delayed due to the defective product, costing down time and ill will with the clients. Because cranes are rented for the installation and the crews are paid hourly, Sun Magnet is concerned about defective product arriving at a building site in Canada, so far from the European manufacturer, with no back up. The timing for the Sun Magnet panel installation is crucial and costly if time is lost due to delivery or unit failure. Initial marketing surveys indicate that the North American market is eager to invest in this green technology, and that sales will be very high for at least the next three years. Note: The jobsite: A jobsite is a workplace (or most times a work in progress place) where we see construction of entire buildings, building additions, or other projects where machines and materials are being added, or removed from a place. The jobsite itself is a busy place that sees people/workers, equipment moving around; it sees vehicles and machinery coming and going from the site. Many deliveries to the site are time based, and equipment can be rented, or scheduled to meet arrival of products or equipment used in the construction project.