Storage and distribution operation

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Reference no: EM133497


You are strongly directed to read carefully and analyze the information in the case must study before attempting parts (a) and (b).
National Transport Ltd (NTL) is an outsourced provider of transport and distribution services. It is a national company with many dissimilar sites and a diverse client's base. One of its numerous contracts is for the storage space and distribution of retail items for a chain of convenience shops (food, cigarettes and other non-food items). Currently the agreement comprises of one warehouse and a fleet of 10 vehicles, which serves 40 shops scattered right through the island.

The vendor, Top Retailer (TR) has 30 shops which are open between 6am and 10 pm and 10 shops are open 24 hours a day. TR also has charts to double its number of shops within the next five years.

The pact with the retailer was won six months ago, and NTL was required to start operation at very short notice (eight weeks) and so had to act quickly to set the operation up. Due to time restraint, NTL rented a vacant, pre-built warehouse for the operation, and also recruiting personnel quickly so that the operation was ready to begin on the agreement start date.

Throughout the last few months NTL has received several complaints from TR regarding its presentation. These complaints narrate to delivery performance and stock accuracy. As NTL is keen to keep the contract, it sent one of its supply chain consultants to examine current problems and suggest solutions.

The consultant examined the procedure and found the following:

The existing Operation - Warehouse

At the receiving area there are 4 docks and up to 15 lorries waiting at any one occasion
NTL currently deals with over 125 suppliers of products and these are delivered to the warehouse by the suppliers' own vehicles. One of the main troubles at present is that vehicles arrive at arbitrary times, allowing no planning. The goods-out area has five docks that are empty for long stages throughout the day.

Within the warehouse is congested, with large quantities of floor space being taken up with stock either waiting to be inspected in by the goods-in controllers, or waiting to be put on top of racks after inspection. The racking was already installed when the building was taken over by NTL, and the locations are of fixed heights, which means that pallets are over and over again left on the floor because there are no slots high enough to accommodate them.

The warehouse manager also highlights other areas that are of concern. Quite a lot of products are not in the right location, some boxes have been opened, and much of the stock is scattered roughly, making it difficult to recognize the precise quantities within each location. Additionally, the cigarette store is unlocked, which permits open access. There are also pallets of products stacked in the aisles, which not only impedes access but also blocks the view of the aisles from the offices which are located on the periphery of the warehouse.

On his tour of the storehouse the consultant also found someone roaming in the warehouse. When questioned he made the justification that he was lost. Upon investigation it was found that the security gates stop all vehicles, but visitors coming on foot are not escorted onto the premises. Some of the boundary fencing is in a poor state and it contains several holes.
The professional then went to talk to the human resources (HR) department, where it was described that many of the staff be it drivers or helpers who work in the warehouse had been recruited via an employment agency and the HR department is also uncertain whether background verify had been carried on the staff by the employment agency.


NTL functions its own fleet of 25 rigid vehicles and currently distributes to the shops between the hours of 10pm and 6am, as this enables the shelves to be replenished before the main flow of clients comes through the doors. It also allows the delivery drivers to avoid many of the restrictions that do not allow transportation to some of the shops between the hours of 8am to 6pm.
On the other hand, these delivery times are causing the transport operation several problems.

It makes it difficult to optimize the use of the vehicles, as all the deliveries get place within a short timeframe. Not all the edifices are open 24 hours, so drivers have to deliver some shops when they are closed, using a master key to gain entry. They have to relieve the delivery into the shop and then lock up afterwards. This has led to a number of issues, one of which is an augment in the number of complaints regarding stock shortages from managers whose shops take delivery of deliveries when they are closed.

(a) Converse the improvements that should be made to NTL's storage and distribution function so as to improve the service to TR.

(b) Give explanation the potential security issues within NTL and justify methods that could be used to overcome these security issues.


Describe, using instances, FIVE ways that the storage and distribution function can add value to an organization.


Natter how the efficiency and effectiveness of a warehouse can be affected by the choice of handling equipment.


Estimate the contribution that ICT can make in developing an effective storage and distribution operation.

Reference no: EM133497

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