Their premier product line is sold through a network of regional

QUESTION

Wardrobe Concepts Ltd.Wardrobe Concepts Ltd. (WCL) is a rapidly growing semi-custom cabinet make, ‘ Their premier product line is sold through a network of regional building products tributors. Recently, WCL has developed a strategy to sell a moderate line of cabinets called the Skyline Collection that will be sold through home store chains. At a industry trade show, interest in the new line was high and all indications point toward heavy demand for WCL products.Shortly after the trade show, Joann Franzen, the vice president of marketing, ma, with her logistics counterpart, Shane Doane, to discuss the opportunity. Franzen• wanted to discuss the demand forecast for the Skyline Collection. The meeting was also intended to address the strategy for product distribution.Both agreed that the forecast was reasonable and relatively conservative, given the current economic conditions. However, the two disagreed on order fulfillment and dis-tribution issues.Franzen suggested that the WCL private fleet be used to move finished goods from WCL assembly plant in French Lick, Indiana to the retail outlets of Home Mart, a Midwest chains with 250 stores and WCL’s first customer to consider signing a con-tract for the Skyline Collection. “As the inaugural reseller of the Skyline Collection, we need to give Home Mart exceptional service,” said Franzen.”I’m not so sure about that strategy,” replied Doan. “Our fleet is relatively small and we use it to deliver high margin custom orders to no more than 30 different distribu-tors. You’re talking about a nearly tenfold increase in the number of delivery points.” He also noted that the size of the initial Home Mart orders for display product and in-ventory would be large. Later, deliveries would be smaller replenishment orders andcustomer-specific buys.Franzen replied: “I don’t want some second rate for-hire trucking company damag-ing the product or delivering it late just because you’re looking to save a few transpor-tation dollars. You’ve got to maintain exceptional control over the movement of this product. Home Mart is just too important for us to cut corners.””This isn’t really the type of freight that for-hire carriers desire,” stated Doan. “It is prone to damage, low weight, and takes up a great deal of the cubic capacity of a trailer.That means high transportation rates. We really need to come up with a middle ground solution to serve the customer effectively without busting our budget.””I need to sell product and get contracts signed,” responded Franzen. “You need to analyze this one on your own and come back to me with a viable order fulfillment and delivery solution. Give me a call tomorrow before my meeting with Home Mart. I want to get the contract finalized but need the transportation details specified before they will sign on the dotted line.”With his position firmly stated, Franzen got up and left the room without another word.CASEWhat role can third party logistics play in the WCL-Home Mart supply chain? Is ita viable alternative to the WCL private fleet or for-hire transportation?What type of 3PL service provider is best suited to serve the WCL-Home Martsupply chain? Why?Does Doan need to investigate the use of an integrated 3PL or a lead logistics pro-vider? Why or why not?Given the situation and the marketing VPs concerns. identify and discuss the challenges of using 3pl services for home market

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