The Totalline Company Harvard Case Solution & Analysis

Identification of issues and its analysis:

  • Elimination of late appointment fees. 

This is the main issue faced by The Totalline Company which needed to be address. The Totalline Company facing huge cost in the form of appointment fee due to late delivery of the trucks to the distributors. This cost is reducing their profitability of the company. The Totalline Company is charged $ 1000 for delivering the product with 30 minutes delay. So, this increase in cost lead to the increase in delivery cost to $ 1500, but if The Totalline Company makes an hour delay then the cost of delivery will be $ 2500 (see appendix).

So, overall this will impact on the reputation of the company and the customers may change the supplier and switch to the one which will deliver timely goods to them.

  • Enhancement of services and revenue potential.

The Totalline Company is operating in the Canada and also supplying the deliveries to the USA market as well. The Totalline Company could increase its revenue potential by acquiring new ware houses as it is considering, it can further increase and expand the operations in the European countries where the growth potential is very high, especially by making alliance with the giant retailers.

Furthermore The Totalline Company could increase the ware house operating hours. The Totalline Company is operating the ware house 13 hours a day. So The Totalline Company can increase the ware house operating hours to increase the revenue of the company.

  • Reduction of carriers coming to the same dock locations will not be relieved even with a new expanded facility. 

This problem is because the existing dock is already operating at its full capacity. Expanding of the dock might be to focus and capture the new market share instead of removing the bottleneck. So, they might hire additional vehicles to cover the new market instead of using the existing ones.

But this issue need to be resolved as this is increasing late delivery charges as well as damaging the reputation in the market.

  • Introduction of an inventory strategy for reduction to E.I. warehousing that can help eliminate the bottleneck.-

Delivering directly to the E I Store will increase the cost of transportation but it will reduce the cost of transit by $ 4 m (See appendix). This will also help to reduce the bottle neck in the ware house. But The Totalline Company will need to hire additional delivery vehicle to cover the 100 stores in Ontario.

Evaluation of the alternatives: 

Dedicated doors: 

Benefits:

  • The dedicated doors will reduce the time of delivering the goods to customers.
  • It will solve a problem of bottleneck to some extent.
  • The cash tied up in the form of stock in transit will be reduce, means better management of working capital.

Drawbacks:

  • Resolve the issue for international electronic warehousing product.
  • Dedicating the doors might dedicate the trucks for international electronic products, which may impact on the flow of other deliveries while some trucks might stand free of any engagement)

Applying stickers at consolidating points: 

Benefits:

  • Reduce the handling time by 2 hour lead to timely delivery of the products.
  • Save the cost by $ 60 per load of truck (see appendix)
  • Increase the cycle of inventory and will reduce overall inventory.
  • The Totalling Company could add value in its delivery process further by charging prices from customers on the stickers.
  • It will add value for customers as well.

Drawbacks:

  • It will increase the dis – economies and inefficiencies if this facility will be turned to larger facility.
  • It is long term solution and will require time to resolve bottleneck issues.

Delivering directly to E I Stores: 

Benefits:

  • It will improve the relationship with E I retailers.
  • It will help in reducing the bottle neck, as the volumes of truck arrive at ware house will reduce.
  • It will improve the efficiency and make saving of 2 days in transit inventory.

Drawbacks:

  • The cost of delivering directly to stores will increase.

There will be a need to buy additional vehicles to deliver 100 retailers.................................

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