Bis Corp

B I S C O R P. C A S E

*Serves about 2,000 retail stores including Home Depot, Wal-Mart

As well as BIS-owned stores.

*Single-tier network, all products are shipped from plant to 17

Warehouses.

*Family venture (1964), now owned by 12 shareholders.

*Sells 4,000 SKU’s

*CEO is concerned that supply chain is NOT efficient(

**Inbound truck utilization,

**Inventory turns &

**Service levels are TOO LOW(

*Production & distribution strategies 20 yrs. Back model?

*Shareholders in search for “outside help” in modifying logistic

Network & supply chain strategy.

Re-engineering the production, inventory, & logistics functions.

*Identified 3 important issues that need to be addressed:

**What is the best network configuration that the BIS corp. should

Use?

Single-tier network, low truck utilization, hence high transport cost.

Proposed two-tier distribution network, with a primary & secondary

Warehouses. Whse.1 to receive products from the plants & transfer

Inventory to Whse.2 who in turn will serve the retail outlets.

**Given the new network configuration, where should the company

Position inventory? How much? With 4,000 SKU’s?

**Which plant should produce which product?

*CEO insist that delivery time should be no more than one day for most

Of the retail outlets (service level).

*Product growth varies from product family.

*CEO & Company shareholders oppose building a new manufacturing

Plant because of the cost and risks involved.

NETWORK PLANNING - the process by which the firm structures and manages the supply chain in order to:

*find the right balance between inventory, transportation, and manufacturing cost.

*match supply and demand under uncertainty by positioning and managing inventory effectively

*utilize resources effectively by sourcing products from the most appropriate manufacturing facility.

STEPS IN...