Bloomex.ca Logistics Optimizationq Harvard Case Solution & Analysis

Bloomex.ca Logistics Optimization Case Study Solution

Introduction

The Bloomex is one leading Floral company Canada. Meanwhile, the company has been offering various types of the flowers, to the customers throughout the Canada, with the same day services. Whereas, customer could order any flower or gifts online, while chatting with the agent, or by calling the toll-free number of the company. Furthermore, the company has small network of the production houses and the warehouses, in seven different cities of the Canada.

Meanwhile, the company has been importing the fresh cut flowers from the Southeast Asia, South America, and the Florida as well. Meanwhile, it can be determined that, company has also been outsourcing the products from the Holland. Furthermore, the company has been under the huge costs of the supply chain. Since, the products supplied were sent to the distribution centers or the transshipment center. Currently, the company was using Toronto, as the leading transshipment center, for all of its production and warehouse units.

Indeed, the owner of the company was considering, to redesign the company supply chain and then observe the change or an effect, it might have on the cost of the supply.From supplier to the transshipment center and then to the other facilitation, warehouse or production center. However, the company was currently using the Toronto as the transshipment center, which were incurring the CAD[1] 23,095.50 weekly. Meanwhile, the owner of the company, was keen to know about any change of effect in redesign of network that might have on cost of supply.

Problem Statement

What could be potential design of the supply chain in the Bloomex.ca, so that company could incur less supply costs?

Analysis

Supply Chain

The company has been using the Toronto as the transshipment center, for the shipment of the products received from the supplier. Meanwhile, now the Toronto center is also being used, to transfer the products and flowers from the Toronto, to all of its facilitation centers and production houses as well. However, it can be determined that, the company is also incurring the huge cost of supply chain around the CAD 23,095.50 weekly.

Meanwhile, Company was considering the options to redesign its supply chain process, and increase the transshipment centers. Because, other than Toronto, the Miami and the Vancouver was also under the consideration,of making those as the transshipment center for the company’s operations. Furthermore, if we determine the supply and demand of the company,then the company’s supply need is around 1182 boxes per week.

On the other hand, the cost to supply the products to the Toronto would be $15,810 weekly. Similarly, this cost is the cost of transferring the products, from the supplier to the Toronto transshipment. Meanwhile, the cost to transfer these products,to seven different locations of the Canada remains, to be considered in the total cost of supplying. Since, this exhibits shows the total costs of the transforming goods from the supplier, to the three different potential transshipment centers of the company.

Consequently, it can be determined that, cost of supply into the Toronto is $15,810, the cost to Miami is $10,080, and the cost of making the Vancouver as the transshipment center would be $23,620. Consequently, the cost of making the Miami as the transshipment center, is much less than the other two potential transshipment centers. However, the cost of transforming these products, is not included into the cost. See Exhibit 2

Indeed, if we compare the total cost of the supply.Then it can be determined that, cost of making Miami as the transshipment center, is much less than any other transshipment center. Meanwhile, it can be said that, the company could save huge costs, if the company makes Miami as the major transshipment center for its goods.To the different seven facilitation and production houses throughout the Canada.

Furthermore, it can be determined that,if the company plan to make the Miami as the major transshipment center in the Canada, that would work as the hub of its supply chain process. Because, it would acquire the supplies from the suppliers, and would also transfer these supplies to the different locations around the company’s production and warehouses. Meanwhile, the cost of this plan would be $19,217.5. See Exhibit 3 for the cost comparison.

Furthermore, the South America is much better source of additional supplying, rather than any other country. Because, the cost of supplying from the South America to the Miami is significantly higher i.e. given that if company get its additional supplies from the Southeast Asia to the Toronto, then company would incur a cost of $35 per box. But, if the same shipment is made to the Miami, then cost of shipping would $20 per box only,around 43% less cost.

Conclusion and Recommendation

The Bloomex has been incurring huge costs on the supply of the products, from the supplier to its transshipments. However, getting optimal value was possible, through the redesigning of its supply chain. Indeed, the company was using the Toronto as the transshipment center, to distribute those products throughout its all facilitation centers. Since, the Toronto as the transshipment center was incurring the cost of $23,245 per week, as per the given demand.

On the other hand, it can be concluded that, if the company changes and redesign the supply chain from the Toronto to the Miami, then company could get the optimal value of the $19,217. Meanwhile, the company has made Miami, as the major transshipment hub for all of its facilitation, production house and warehouses as well. Thus, it is recommended that, company should make the Miami as the major transshipment hub. Meanwhile, it is also recommended that, company should get the additional supply from the South America to the Miami, which is much less than the other available option of supplies..........................

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