Reference no: EM132276542 , Length: word count:2500

Case Study

FARAMIL S.A.O.G. is a company based in Ubar (Oman) that makes mechanical components for trucks. The production and storage are both based in Ubar. It has just received an order from a multinational to start a mass-production of all the front brakes of a new model truck that is about to be launched.

According to the tender, FARAMIL S.A.O.G. must supply 1200 brake units a day (600 correspond to part code PS3476FRT543789DR, for the right front wheels of the vehicle and 600 correspond to part code PS3476FRT543789IZ for the left front wheels). The weight of these brake units is 14.5 kgs each (incl. box).

The goods must be supplied each working day from Saturday to Thursday in the factory that the multinational has in Ubar, Oman. The initial duration of the contract is set at one year (in other words, 249 deliveries).

Once the brakes have been manufactured, they are packed in reusable parallelepiped plastic boxes adapted to the component, with a lid, and outside dimensions of 30 x 40 x 25 cm (the last measurement corresponds to the height). Each box can hold a complete set of brake equipment.

Independently of the labelling, the boxes are yellow or orange corresponding to the right or the left wheel, to make it easy to work with in logistics and sales.

The boxes will be stacked on wooden pallets (europallets) measuring 120 x 80 x 15 cm. The weight of the pallets is 10 kgs per pallet.

The boxes are stacked in layers separated by a 6mm thick sheet of plywood 120 cm x 80 cm x cm thick. The pallets may not be stacked on top of each other. Once the pallet is fully loaded, it is wrapped. The weight of both foil and sheets is negligible.

The maximum height of the pallets is limited to 150 cm since this is the size of the space for pallets in their dynamic shelves in the FARAMIL S.A.O.G. warehouse.

However, FARAMIL S.A.O.G. has a problem in achieving this major contract: the production plant in Ubar is not equipped to perform the hardening treatment required by all the brakes and has to subcontract this operation to another company.

There is a company in Saudi Arabia called MEDIBRAKE that can apply this treatment in Medina, Saudi Arabia.
FARAMIL and MEDIBRAKE have already reached a pre-agreement by which the amount of the product required every day will be delivered to the factory designated for treatment and will then be returned duly treated after two days to be repacked and palletised in the same conditions as when it was delivered.

The Logistics Manager of FARAMIL is prepared to organise the transport in light of the operating conditions. To do this, he has contacted different logistics service providers (NAMES OF THE STUDENT GROUPS) and has asked them to bid for the contract.

The logistics operator must collect the product every day at FARAMIL and transport them to the MEDIBRAKE plant in Medina (Saudi Arabia) and collect the treated product there to take it back to Ubar (Oman).

In addition, the logistic manager of FARAMIL S.A.O.G. will take along the winning logistics operator to help him to convince the multinational of the logistical viability of the process.

By FARAMIL accepted modes of transport

The following modes of transport are available for this concept:

• Airlines
• Shortsea
• Road transport

Airlines:

There is a daily flight from Salalah (Oman) to Jeddah (Saudi Arabia) v.v. what is also open for transport of cargo.
The service will be executed by a Boeing 787 what can carry ULD's types LD4 and LD11.

Shortsea:

There is a daily ferry service between Salalah (Oman to Jeddah) Saudi Arabia
what is open for containers and Ro-Ro. (non-dangerous goods). Closing time for acceptation the container before departure is 6h.
The sailing distance is 1300Nm.

Road:

The current situation in Yemen is not stable. Waiting time at the borders is from 6-48 hours but can change rapidly. During the nights it is unsafe to drive outside cities.

Part 1:

Analyse the most appropriate type of equipment for the transport and design the configuration of the shipments, from among the following alternatives, i.e. the layout of the pallet, distribution of pallets in the vehicle, number of items (containers, swap bodies, trailers) to be sent each day.

After you have chosen the appropriate transport unit you know you have a solution, but you are sure that you don't have a better solution than your competitor, because he could figure this out too. So, after choosing the transport unit, there are several ways to optimize the flow so that you are able to reduce the price per box or per pallet.

Question: Calculate and choose the optimum transport unit for this concept. Find an optimum in the occupation degree of the transport equipment so

• That you are able to offer the lowest price.
• That you create a maximum of flexibility in the concept. Make a drawing of this concept.

Part 2:
In part two you have to organise the transport, taking into account the above mentioned and following conditions what ends in a final report what might lead to an offer to FARAMIL.
Important items for the report are:

- Continuity and JIT are important delivery demands; It is crucial that there will be a constant stable flow going outbound and inbound.
- Hybrid transport might belong to the solutions;

- Rush orders might happen;
- Use in your report the logistic integral concept
- Calculate the costs of each rotation in the roundtrip what you can use in the ETO (economical Trade Off) as a decision maker in this process.
- Choose the best option(s)
- Add 15% for risk and 10% for profit to complete the report.

Support: DESTEP and SWOT analysis are analysis what might support you in your decisions.

Attachment:- Transportation Mgt.rar