OMGT2327 Distribution and Freight Logistics Case Study 1 Sample
Assignment Brief
In this assessment, you are required to analyse the business model of Rubbermaid Corporation and its implications on retail logistics operations. Examine the case study provided and assist the company board to decide the future strategy for the company.
Purpose
A case study scenario will examine your decision-making capability pertaining to logistic and distributional complexities. This assessment will also enable you to define and prioritise customers to improve service quality and deploy a quick response strategy to service delivery based on a customer segmentation approach.
This assessment reinforces the learning from the topics on retail logistics models and distribution strategies covered in this course. This assessment contributes to learning and skills development in presenting critical and coherent analyses of a case study and management decision process on aspects of retail freight logistics.
Details
Read the Rubbermaid Corporation (RBC) case study.
You have been engaged as a consultant and you are required to analyse the information provided and assist the company board to decide the future strategy for the company. You must prepare your response to the following questions:
• What are the critical components of RBC’s transportation costs?
• Do you think that the decision to outsource some parts of RBC’s logistics operations to a 3PL provider is logical?
• What are your recommendations for the company to overcome the present crisis?
Structure
1. Setting out the business context of RBC
In this section, you should set out the business context of RBC including the logistical challenges and opportunities to outsource to 3PL. The context needs to be grounded on the literature review on 3PL and course materials. Information can be selected from scientific journal articles, books and similar credible sources to support your argument.
2. Critical evaluation and economic rationalisation
In this section, you are required to undertake cost-benefit analysis of outsourcing distribution/transportation function to 3PL as a business strategy to reduce operational costs. Your analysis should consider economic rationalisation of the proposed strategy and its implications on business operations, service quality, and staffing. Use of tables and figures are encouraged to present your argument and decision thought process succinctly and effectively.
3. Recommendations
You should propose a set of recommendations to the company, along with justification and the potential implications. The relation of recommendations with the previous sections of the report should be clear and understandable for the reader. You should explain how the recommendations can improve the current state. Additionally, the feasibility and applicability of recommendations is crucial as sometimes optimistic recommendations are not feasible in the practice.
Solution
1. Introduction
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Figure 1- Rubbermaid Corporation
Source- Zipper, 2020
Effective logistics running is a cornerstone for operational success in the active world of modern trade. This case study examines the strategic difficulties and opportunities that prominent clothes store Rubbermaid Corporation (RBC Corp) in Melbourne experienced (Grath, 2023). Logistics challenges arose as the business transformed from a wholesaler to a manufacturer, forcing a reevaluation of distribution tactics. The feasibility of outsourcing distribution tasks to third-party logistics (3PL) providers is examined in the study, taking into account the financial justification, operational effectiveness, and potential effects on service quality. This expert investigation aims to offer tips for designing agile logistics solutions that strike a balance between effectiveness and customer involvement (Grath, 2023).
2. Discussion and analysis
2.1 Setting the Business Context for RBC Corp
The well-known apparel store Rubbermaid Corporation (RBC Corp.), with headquarters in Melbourne, competes in a dynamic market. RBC Corp., which started as a distributor in 1978, developed into a full-line apparel manufacturer by 1989 by utilizing the advantages of outsourcing manufacturing to China at a lower cost, which was sparked by trade agreements and the growth of low-cost global markets (Keaton, 2022). This transition created logistical difficulties for the organization even while it increased profitability through cost reductions. Low-cost garment producers presented RBC Corp. with fierce competition when Australia opened its market to international goods. By 2000, over 90% of the company's manufacturing operations were outsourced to China as part of its fundamental strategy to stay competitive. RBC Corp. was able to concentrate on its core strengths and benefit from the lower costs provided by foreign production as a result of this strategic choice. While having a strategic focus on outsourcing manufacturing, RBC Corp. still had to deal with challenging logistical issues, particularly when it came to customer delivery (Keaton, 2022).
The internal fleet of RBC Corp. faced significant difficulties in reaching both B2B and B2C customers because of Melbourne's vast size. To differentiate itself from rivals and quickly satisfy growing client needs, the company expanded its vehicle fleet. Nevertheless, since vehicles travelled far distances to satisfy various delivery requests, this expansion contributed to operational inefficiencies and cost overruns (Ledwoch et al., 2021). Glen Hodgson, CEO of RBC Corp., was thinking about the logistics system when he came across the article "Outsourcing efficiency in retail logistics." In this study, the conflicting preferences of CEOs were emphasized. While 65% of CEOs preferred 3PL services due to potential cost savings, others favoured direct customer interaction above indirect customer engagement. This study related to the internal conflict that RBC Corp. faces in trying to balance cost reduction with upholding a tight relationship with consumers for university assignment help. Third-party logistics (3PL) research confirms that outsourcing logistics to specialist providers can result in significant benefits, especially in challenging and competitive contexts (Ledwoch et al., 2021).
2.2 Critical Evaluation and Economic Rationalization of Outsourcing Distribution to 3PL
Undoubtedly, RBC Corp has a tempting opportunity to potentially reduce operating expenses and improve efficiency by outsourcing the distribution and shipping function to a third-party logistics (3PL) provider. To make an informed choice, a thorough cost-benefit analysis taking into account economic rationalization and wider ramifications is essential (Keaton, 2022).
2.2.1 Cost-Benefit Analysis
1. Operational Costs
By contracting with a specialized 3PL company, RBC Corp could take advantage of scale savings, efficient routing, and shared resources, which may result in lower transportation costs. Additionally, the infrastructure and network that the 3PL has built over time may help to minimize problems with maintenance and vehicle downtime (Ledwoch et al., 2021).
2. Efficiency Gains
By utilizing a 3PL's knowledge, operations may be made more efficient, resulting in on-time deliveries and a reduction in inefficiencies in the internal fleet management of RBC Corp. Improved responsiveness and customer satisfaction result from this, which is a critical competitive advantage (Grath, 2023).
3. Labor and Staff
Outsourcing could lower the cost of personnel by reducing the requirement for standby drivers and the expense of driver absenteeism. To uphold service standards, RBC Corp must carefully assess the calibre of the labour offered by the 3PL (Schwindt et al., 2020).
4. Investment in Technology
A technology investment might be required for RBC Corp to take full advantage of the 3PL's services. By implementing data-driven insights, RBC Corp could improve routes, enhance delivery tracking, and increase efficiency (Schwindt et al., 2020).
2.2.2 Economic Rationalization and Implications
1. Improved Cost Structure
Exporting may convert fixed costs to variable costs, enabling RBC Corp to adjust costs to changes in demand. When an internal fleet is maintained, the financial risks are reduced because overhead costs are consistent regardless of actual usage (Lopez-Hoffman et al., 2019).
2. Concentrate on main Competencies
RBC Corp. may focus on its main business activities, encouraging innovation and product development, by leaving logistics to professionals (Lopez-Hoffman et al., 2019).
3. Service Quality
Although cost reductions are important, sustaining a high level of service quality is essential. The chosen 3PL must be in line with RBC Corp's commitment to timely and dependable delivery for there to be no adverse effects on client loyalty (Herry, 2020).
4. Risk management
Outsourcing may help to reduce risks related to driver management, vehicle maintenance, and route planning. By splitting up these duties with the 3PL, RBC Corp can reduce operational disruptions (Herry, 2020).
2.2.3 Decision-Making Procedure
1. Economic Impact
The cost-benefit analysis shows that operational costs, especially labour and maintenance, may be reduced. Savings like these could release funds for further tactical investments (Thompson, McKeith and Krehbiel, 2023).
2. Service Enhancement
The 3PL's efficiency improvements and increased customer responsiveness can help RBC Corp. maintain its competitiveness in the market (Reinbold-Wasson and Reiskind, 2021).
3. Risk Reduction
Outsourcing reduces the dangers connected with route design, vehicle maintenance, and driver absenteeism, making operations more dependable (Reinbold-Wasson and Reiskind, 2021).
4. Resource Focus
By delegating logistics to a 3PL, RBC Corp can focus its efforts on its core expertise, encouraging expansion and innovation (Reinbold-Wasson and Reiskind, 2021).
3. Recommendations for RBC Corp
The following suggestions are made to RBC Corp. based on a critical assessment of outsourcing distribution to a third-party logistics (3PL) provider and taking into account economic rationalization. These recommendations, which are based on the analysis done, are meant to increase the company's operational effectiveness, level of customer satisfaction, and overall competitiveness (Thompson, McKeith and Krehbiel, 2023).
1. strategic partnership with 3PL
RBC Corp should actively consider forming a strategic alliance with a reliable third-party logistics supplier like Kaiger Logistics. The company's goal of lowering operational expenses and improving customer service is in line with this agreement. RBC Corp can leverage the 3PL's know-how, technology, and established network for streamlined delivery by outsourcing distribution functions (Lopez-Hoffman et al., 2019).
Implications and Justification
The difficulties mentioned in the case study, such as driver absenteeism, maintenance problems, and ineffective route planning, can be resolved by working with a reputable 3PL. Due to the 3PL's expertise in logistics, supplies will be made on time, resources will be used effectively, and costs will be reduced. As a result of this change, RBC Corp will be able to focus on its core skills, which could encourage innovation and growth (Thompson, McKeith and Krehbiel, 2023).
2. Investment in Tracking technology
RBC Corp. should invest in cutting-edge tracking technology and software to enable real-time delivery monitoring and route optimization to take full advantage of the 3PL's capabilities. With the help of this technology, the business can make better decisions thanks to data-driven insights (Herry, 2020).
Implications and Justification
Adopting technology will increase delivery accuracy and offer useful information for ongoing improvement. Routes that have been optimized will use less fuel, make deliveries faster, and cost less overall. Real-time tracking also improves consumer transparency and communication, which promotes loyalty and confidence (Thompson, McKeith and Krehbiel, 2023).
3. Service Quality oversight
RBC Corp must make sure that the 3PL's service quality complies with its commitment to on-time and dependable deliveries while outsourcing logistics. To monitor and uphold standards, service level agreements and performance reviews should be developed regularly (zipped, 2020).
Implications and Justification
While cutting costs is important, keeping a high level of service quality is crucial for retaining customers. RBC Corp may quickly resolve any deviations by closely monitoring service quality, ensuring that the 3PL's performance is consistent with its brand promise (ago Wooster et al., 2020).
4. Feasibility and Implementation Planning
RBC Corp should do a thorough feasibility analysis before outsourcing to make sure the suggested proposals are in line with the organization's financial resources and long-term objectives. A thorough implementation strategy should also be created, encompassing details like contract negotiations, tech integration, and personnel transition (zipped, 2020).
Implications and Justification
Consideration must be given to both operational readiness and financial viability before making large adjustments. To minimize any negative effects on customer service and overall operations, a systematic implementation plan minimizes risks, minimizes disruptions, and allows a seamless transition (zipped, 2020).
4. Conclusion
Rubbermaid Corporation (RBC Corp) encountered the dynamic challenges of logistics operations during its transition from wholesaler to producer. A strategic approach to these problems is the investigation of outsourcing distribution to a third-party logistics (3PL) provider. RBC Corp can save costs, improve service quality, and concentrate on its core capabilities by adapting to the changing environment. The suggestions to collaborate with a 3PL, spend money on tracking technology, assure service quality oversight, and give priority to feasibility provide an all-encompassing strategy. This instance highlights the need of striking a balance between operational effectiveness and client involvement in determining RBC Corp.'s future course.
References
AgoWooster, R. current logo used T. 1920; 103 years, Ohio, U.S.HeadquartersAtlanta, Georgia and BrandsWebsitewww.rubbermaid.com, U.S.K. peopleJames R.C. household goodsParentNewell (2020). Wikiwand - Rubbermaid. [online] Wikiwand. Available at: https://www.wikiwand.com/en/Rubbermaid [Accessed 20 Aug. 2023].
Grath, M. (2023). Rubbermaid Inc. | Encyclopedia.com. [online] www.encyclopedia.com. Available at: https://www.encyclopedia.com/economics/economics-magazines/rubbermaid-inc [Accessed 20 Aug. 2023].
Herry (2020). About Us | Rubbermaid Commercial Products. [online] www.rubbermaidcommercial.com. Available at: https://www.rubbermaidcommercial.com/about-us/.
Keaton, T. (2022). Rubbermaid corporation. LMU/LLS Theses and Dissertations. [online] Available at: https://digitalcommons.lmu.edu/etd/1130/ [Accessed 20 Aug. 2023].
Ledwoch, K., Magoga, M., Williams, D., Fabbri, S., Walsh, J. and Maillard, J.-Y. (2021). Is a reduction in viability rubermind enough to determine biofilm susceptibility to a biocide? Infection Control & Hospital Epidemiology, 42(12), pp.1486–1492. doi https://doi.org/10.1017/ice.2021.42.
Lopez-Hoffman, L., DeNoyer, J.L., Monroe, I.E., Shaftel, R., Anten, N.P.R., Martinez-Ramos, M. and Ackerly, D.D. (2019). Mangrove Seedling Net Photosynthesis, Growth, and Survivorship are Interactively Affected by Salinity and Light1. Biotropica, 38(5), pp.606–616. doi https://doi.org/10.1111/j.1744-7429.2006.00189.x.
Reinbold-Wasson, D.D. and Reiskind, M.H. (2021). Comparative Skip-Oviposition Behavior Among Container Breeding Aedes spp. Mosquitoes (Diptera: Culicidae). Journal of Medical Entomology. doi https://doi.org/10.1093/jme/tjab084.
Schwindt, A.R., Winkelman, D.L., Keteles, K., Murphy, M. and Vajda, A.M. (2020). An environmental oestrogen disrupts fish population dynamics through direct and transgenerational effects on survival and fecundity. Journal of Applied Ecology, 51(3), pp.582–591. doi https://doi.org/10.1111/1365-2664.12237.
Thompson, K.S., McKeith, A.G. and Krehbiel, C.R. (2023). Site of infusion of a Rubbermaid corporation overview commercially available direct-fed microbial on performance and digestibility in lactating Holstein cows. Applied Animal Science, [online] 39(2), pp.44–55. doi https://doi.org/10.15232/aas.2022-02354.
zipper (2020). RubbermaidCommercial History: Founding, Timeline, and Milestones - Zippia. [online] www.zippia.com. Available at: https://www.zippia.com/rubbermaid-commercial-products-careers-37170/history/ [Accessed 20 Aug. 2023].
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