Somerset Furniture Company

Case Study 8.2

"Somerset Furniture Company's Global Supply Chain"

Lee, Alicia

SNHU

QSO-600-Q1771

Operations Management

Professor Tom Mulherin

For the Somerset Furniture Company described in Case Problem 10.1 in Chapter 10, determine the product lead time by developing a time line from the initiation of a purchase order to product delivery. Discuss the company's possible transportation modes and channels in China and to and within the United States, and the likelihood of potential problems. Identify and discuss how international trade specialist(s), trade logistics companies, and/or Internet exchanges might help Somerset reduce its product lead time and variability.

Following is the variable timeline for product lead time:

1. Develop purchase order: 12 to 25 days

2. Process purchase order overseas: 10 to 20 days

3. Manufacturing process: 60 days

4. Transport from plants to ports: 1 to 14 days

5. Arrange for containers and paperwork: 5 to 10 days

6. Wait for containers: 1 to 7 days

7. Load containers: 3 to 6 days

8. Security checks: 7 to 21 days

9. Overseas shipment: 28 days

10. Clear customs and loading trucks: 7 to 14 days

11. Transport to warehouse: 1 to 3 days

12. Receive and warehouse: 1 to 30 days

Total lead time: 119 to 238 days

Somerset Furniture's possible modes of transportation in China are probably primarily truck and rail. Shipments that are sent to the U.S. could primarily be by cargo ships. There is no ground mode of transportation that would allow a shipment to come to the U.S. without a ship being involved. Another mode that would involve shipping to U.S could be air freight but I imagine with its high price, disjointed routes, and limited space this mode is probably only reserved for rush or express shipments. Transportation within the U.S. is mainly by truck, and rail is sometimes used. Shipments are sent direct to stores, dealers, and customers.

When shipping and dealing with different modes of...