Gunn thur corporation-hours of service-decision time

Assignment Help Operation Management

Reference no: EM132291561

Gunn Thur Corporation – Hours of Service

Assignment: Decision Time

Transportation Management

You receive an interview and appointment with Mr. Bucks from the Gunn Therrease Corporation in St. Louis. He offers you a hefty salary increase over your current job and this is a promotion that you have been looking for in your career. You are offered and you take the position of Logistics Manager of Gunn Therrease Corporation. Mr. Bucks states that you are to be paid an annual salary of $89,000, with full benefits and company car. As an aside, he states, “ if you can improve the transportation budget and costs you will be considered for advancement and future bonus considerations as well as stock options for Gunn Therrease. Logistic costs have been the weak point in the company’s profit picture and the board is looking for a heavy weight to correct this slide. You will be reporting to Mr. Black, the VP of Accounting”

You meet with Black and he states that he is expecting results since the company finances were weak the first quarter of the year. The previous logistics manager was fired because he was not aggressive enough, and was not a hands on person. You are instructed to meet once a week as you learn the operations and rules of operation. Part of the new rules are the operating hours of service issued by the Federal Government to go into effect on Jan 2004. It states,

A driver can be on duty for a total of 14 hours, 11 hours driving, 3 off duty unloading, then he/she must take 10 hours off duty”.

After several months, Black calls you into his office and explains Gunn Therrease trucks are currently taking a run delivering Gunn’s manufactured product from St. Louis, MO to Ajax in Mount Paris, IL 250 miles. Ajax is a new account that has moved from their sporadic orders to Gunn Therrease’s number three account in sales volume. The delivery of Ajax orders is on good interstate freeway and Gunn has a return back-haul to St. Louis that makes the transportation costs for Gunn very profitable. The run can be made with 5 hours driving time over, 2 allotted for unloading at Mt. Paris, 1 hour each allotted to drive to the back-haul and load, and five hours driving return to St. Louis.

The problem, as Black explains, is that the prior manager was laying over the Gunn truck because Ajax in St. Paris was taking six hours to unload the truck! The driver laying over cost Gunn the meals, motel, and driver pay to return empty as the backhaul loading time was missed. Being ever the bean counter, Black shows that these itemized expenses were really cutting into the profit margins.

Black then urges you to initiate a new program to get the driver back on a back-haul basis and he states, “we don’t want to do anything really illegal, but we both know that driver’s log books are slightly “adjusted” by all of the drivers. We will meet again next week on Tuesday to see what you can suggest”.

Question:

What are the issue(s) you face?

Outline your response or plan of action at the meeting with Black next Tuesday.

As logistics manager, can you see anything that may affect your relationship and dealings with Mr. Black?

Would you suggest as a possible solution that the Sales department go directly to the customer to solve the unloading problem? Yes or no, why?

Reference no: EM132291561

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