Building a New Supply Chain

Problem – The background of the case is that a company performs garbage pickup from construction sites. Often the construction site wants them to leave a bin there or sometimes they simply pile up the garbage and the company’s employees load the material into the garbage truck. Typically a truck full of garbage at the depot costs $200 per truck to empty. The company charges $350 per load, so there is little profit especially when taking overhead into account (labour and the cost of the truck). The owner wonders how other companies seem to be making so much money.

One day the owner finds a lot of old refrigerators and metal fencing at one of the pickup locations. He has heard that there are some companies that pick this up for free and resell the material to companies looking for scrap metal. Being entrepreneurial and worried about his business, he investigates. He finds that he is able to make an additional $200 per shipment of scrap metal, making his new profit $550 per load! He gets excited and starts to think about what other opportunities may be out there with similar reverse supply chains.

Some additional problems that this company have are related to what its profit really is for each of its transactions, what challenges this company would have to look at alternative materials and markets and what the current competition is for his company’s type of business and lastly what approaches this company should take to ensure it was successful.

Cause – The main cause behind many of these questions the company is asking itself and problems that it is currently having with profitability lay in the appearance that the company has not built itself a good business plan for any step of the company. A business plan helps outline what you need to start a business, but it also helps you prepare for your future and any issues along the way. Your business plan should clarify why you exist, who your customers are, what products or services you provide, how you plan to...