Case study on wobbly wheels distribution company

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Reference no: EM13778192

WW is a regional transportation and distribution company in operation for over 60 years. The company serves major cities in the Mid-Atlantic region. They are headquartered in Wilmington, Delaware and have a staff of 400 employees including truck drivers. There are 6 distribution terminals (Philadelphia PA, Baltimore MD, New York City, Washington DC, Newark NJ and Wilmington DE) for consolidating freight, and 100 delivery vehicles including 20 tractor/semi-trailer units, 40 box trucks and 40 panelvans.
The company operates in a highly competitive business environment. Growth has been stagnant because of a slow economy. John, the president of the company, would like to see growth at 5% per year. He would also like to see expenses cut by 5% to help fund new initiatives. Current revenue is about $39 million a year with profit running at 4%.

Current Business Operations

WW operates 24 hours a day, 7 days a week. Sales personnel (12 people, two per terminal) visit prospective customers to outline company capability, services provided and costs. When a customer decides to use WW they call the dispatch office with shipment information. Usually they FAX a copy of the bill (s) of lading to a terminal with information such as origin, destination, product description,
weight and number of packages. A dispatcher at a terminal makes a list of freight pickups and sends a truck to get the freight. To do this they use the routing system to determine the sequence of pickups by zip code. They use local maps within a zip code to map out the specific order of pickups since there may be several in a zip code area.

They have a performance goal of 98% of freight picked up within 24 hours of availability. A driver follows the dispatch order for pickups. Many of the drivers complain that the pickup order is not
efficient. When they pick up an order they sign for receipt and either load the freight or guide the customer's forklift operators to arrange it properly in the truck. After freight is picked up it is brought to the terminal where it is unloaded and sorted by destination. A
dispatcher then prepares a delivery ticket (again using the routing system) that is used to load a truck in the proper sequence for delivery. Some trucks take freight from one terminal to another while others make local deliveries. About half of a terminal's space is used on any given night. Dispatchers have a goal to turn freight around in the terminal overnight for next day delivery.

When freight is sent out for delivery, the driver follows the delivery ticket order. Often they are held up at a delivery destination by traffic or by lack of available unloading space. late trying to make the day's deliveries. Sometimes they get to a destination and the facility is closed
and they bring the freight back to the terminal for delivery the next day. It is unloaded and re-sorted by destination. The dispatchers then add it to the next day's delivery tickets.The major freight volumes are between New York, Philadelphia and Baltimore (about 70% of total
volume). Trucks run at about 70% of capacity between terminals overall. Local delivery volume is heaviest in New York, followed by Baltimore and then Philadelphia. Local delivery trucks operate at about 80% full while pickups fill about half of the vehicles space. Some customers pick up and/or drop freight at a terminal with their own equipment.
Truck drivers communicate with the dispatchers using two-way commercial radios. Some also carry personal cell phones and use them if the radio is out of range.

A few drivers also carry GPS devices to help locate addresses. In general the drivers are content with the company. Pay and benefits are good and they get overtime pay when deliveries run late. Complaints are few and mostly center around either
the sequence of pickup and delivery of shipments or vehicle maintenance. The fleet is maintained at the main Wilmington maintenance shop and at a smaller shop in Washington. Either one can handle minor maintenance and preventative work. Only Wilmington can perform major
engine and transmission work. Overall the fleet is in good operating condition. All vehicles are on a preventative maintenance schedule which places them out of service two days a month, usually onweekends. Maintenance scheduling is a challenge because it can interfere with the steady flow ofshipments both between terminals and for local delivery. There are no "extra" vehicles in the fleet.
The company management team consists of the President, Vice President of Operations, Chief FinancialOfficer (CFO), Chief Information Officer (CIO), Sales Manager, and a Fleet Manager who is in charge ofmaintenance and safety. They meet weekly to discuss opportunities and issues and to plan for the future. Except for the CIO, the management team has been in place for many years
The president of the company just hired its first Chief Information Officer (CIO), Carol, after the previousIT Director retired. She comes from a nearby manufacturer who is also a major customer. At that company she was Deputy CIO and primarily responsible for network operations and security.At a recent meeting the management team.

Reference no: EM13778192

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