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TD Case Study 2

The document discusses transportation and distribution planning issues faced by Hu-Friedy, a large US dental equipment manufacturer. The main issue is that the company's transportation of materials between facilities and suppliers lacked an efficient strategy, costing thousands in losses annually. To address this, the manager considered alternatives like renting or buying a truck, or hiring a third-party logistics provider to manage transportation. This would allow the company to establish efficient routes and determine the most cost-effective option while minimizing impacts to daily operations.

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Muhammad Mukarram
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98 views4 pages

TD Case Study 2

The document discusses transportation and distribution planning issues faced by Hu-Friedy, a large US dental equipment manufacturer. The main issue is that the company's transportation of materials between facilities and suppliers lacked an efficient strategy, costing thousands in losses annually. To address this, the manager considered alternatives like renting or buying a truck, or hiring a third-party logistics provider to manage transportation. This would allow the company to establish efficient routes and determine the most cost-effective option while minimizing impacts to daily operations.

Uploaded by

Muhammad Mukarram
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Transportation and Distribution Planning

Abuzar L1F19BBAM0232
Danish Javed L1F17BBAM0098

Case Study No 2

Submitted to: Mam Uzma Tahira

Question no 1

What is the main issue discussed in the case? 


Answer: This case is related to one of the largest US dental equipment
manufacturers, Hu-Friedy. It is based on a strategic problem being faced by the
company, which must be solved carefully and diplomatically in order to allow the
development along with maintaining an ambitious and competitive position of the
company. 
The main issue that the manager of the company faces is that the materials that
were being transported between the production facilities and suppliers had no
consonant or compatible strategy. Due to which the company was caused the loss
and sacrifice of thousands of dollars every year. To appraise the company’s
transportation needs, the manager considered a number of alternative solutions.
These solutions included renting or buying a truck or hiring a 3PL provider (offers
out-sourced logistics services which environs anything comprising of management
of one or more facets of procurement and fulfilment activities. It may be a single
provider or a system wide bundle services having the ability of handling supply
chain management) to manage the transportation services. Hence in order to
complete his interpretation, the manager originated new routes for the deliveries
and pick ups, evaluating the costs associated with buying or renting a truck, also
determining the costs of a 3PL provider and ultimately determining the course of
action having the most impact on transportation costs with the least impact on daily
operations.

Question no 2

Fleet Management:
Fleet management is the method your enterprise makes use of to control all fleet and asset
information, from acquisition thru to disposal. This allows your commercial enterprise to
lessen charges, improve efficiency and make certain compliance across an entire fleet
operation. The intention of the operation can be to manage the entire lifecycle of business
automobiles alongside lowering related hazard, enhancing performance, increasing
productivity and making sure compliance with law. Worker automobiles used for paintings
purposes, known as the grey fleet, must additionally be included on this method.
Organisations with fleets are good sized. Hauliers, couriers, sales, services provider, utilities,
public delivery and the emergency offerings all have fleets that want managing. Having a
hold close of the strategies required to run a fleet will enable your enterprise to govern
associated prices, continue to be aggressive within the marketplace area and help meet your
clients’ expectancies
Outsourced Logistics:
To have an alternative, Durand also considered outsourcing all of Hu-Friedy’s transportation
needs to one third-party logistics (3PL) provider. Using one company instead of the various
firms that Hu-Friedy was using could reduce the transportation costs. Outsourcing would also
allow Hu-Friedy to avoid the various difficulties associated with owning and operating its
own truck. However, it would not give Hu-Friedy full control of its transportation, and it
potentially did not capture all savings. Durand reached out to several firms and requested
quotes based on distance, volume, shipping frequency, and type of goods transported. He
made note of the cost per trip for an average load on each segment as quoted by the 3PL
company that provided Durand with the best overall rate
Question no 3
Compare the cost associated with transportation decisions of having
company owned transportation or outsourced transport arrangements.

Transportation cost is the most crucial cost of a company this cost specify that
whether the company is performing their logistics functions cost effectively or
incurring a high cost to the company. The logistics manager should decide the
tactics through which the transportation cost of the company can be minimized
hence improved profits. When talking about transportation decisions to minimize
the logistics cost, there are some alternatives on which we can relay such as
outsourced Third-Party logistics or owning companies own transportation system
(Trucks, Carriers etc.) Firstly analyzing the cost of company owned transport:
When a company owns its transportation they may occur a slightly lower cost than
outsourced third-party logistics service. In Company owned transport the expense
of the logistics is paid by the company for instance the fuel expense, driver’s
salary, licensing, depreciation, maintenance, security, holding cost. These were the
cost a company might bear but as a matter of fact if staff is efficient enough they
can implement such routes which can instantly reduce their cost and there is an
advantage of having own transportation system is that in case of emergency
situations the company can fix the consignment to be delivered on customer
demand. Secondly Third-Party logistics cost is much higher as the outsourced
company charge a fix amount of sum to the company as they are charging their
services and a specific amount of profit at each shipment they have contracted for.
Outsource Companies are not much relied ones however if their operations
management system is not much efficient and the consignments to the customer
faces delay this will automatically ruin the companies good will among their
customers. 
In a nutshell companies should rely on their owned transport as they can also incur
less cost compared to a third-party logistics.

Question no 4
Outsource Deliveries

I would recommend HU-Friedy to outsource deliveries. Durand would have to


create a new delivery schedule to reduce costs. If there is space in the trucks, then
they should load it with components that are needed in the upcoming days of
production/assembly as they have storage facilities they should totally avoid semi-
full or quarter full truck load deliveries. Outsourcing would also allow Durand to
overcome risks of accidents, sick leaves, and other unforeseen circumstances. They
would not have to hire more drivers, purchase additional trucks, maintenance costs,
licensing cost, fuel costs and insurance fees. Durand should focus on reducing
costs now by outsourcing delivery to a single third party company. Additionally,
Hu-Friedy would not have to worry about delivery costs of materials coming from
Carter Design Group as they cover delivery expenses themselves. Once the
schedule is created, is proven to be cost-cutting and runs smoothly, then Durand
should look into owning a single transportation vehicle and slowly implement their
own delivery network. This would help Durand understand expenses of running
and maintaining their own transportation network. During that time, if their own
truck needs repairs or HU-Friedy is unable to transport materials then they still
have a third-party logistics to provide them transportation. To run this operation
smoothly, Durand has to go through these steps otherwise, he would face too many
inconveniences as he has no experience in running a delivery network.

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