Logistics Process Services (LPS), Moncton NB, Airdrie AB and Mississauga ON
LPS firm has transformed in a tremendous way in the transport sector. Its ways of approach to development of transport and integrated logistics is a sign of reshaping of its trade flows. The step this company has taken is yet to make a great contribution to its transport sector. The main aim of carrying out a research is to work with the best way possible in dealing with the transportation of the materials needed for the manufacture of soap products. This specific paper carries out a research on two suppliers. Its main aim is to establish which supplier between Mexico and Louisiana will supply caustic soda with minimization of cost and maximization of profits.
The supply operation is to be carried out among three major centers of distribution: Moncton NB, Airdrie AB and Mississauga ON. Therefore, the most appropriate approach to this situation is by qualitative analysis and cost benefit analysis of these two suppliers. First and foremost LPS should work out the total cost in a year in both cases. Another essential aspect to work on is the amount of cost for every unit of soap in denomination of cents. This is performed strictly on the method of the Mexican supply and the shipping method that has been proposed. The research also contains the recommendations made after identifying the supplier the company opts for. The discrimination is mainly based on cost and the cons and pros details in a broader perspective.
[...] Dedicated transportation This includes transportation of the supplies to the three DCs via dry vans and because of their capacities they seem to cost more than the other two options. Taking an example of the van moving to Mississauga, its cost of transportation is 2.3 million Canadian dollars annually while for the one heading to Moncton NB incurs a transportation cost of 4.1 million Canadian dollars annually which is far much expensive than the other two. Looking at the time of transit, there are risks involved. If this technique is taken into deliberation, the LPS may be forced to pass the added costs to the customers. [...]
[...] The selection has been based on the cost incurred from employment of the two options. The advantages of using the proposed method as LPS' supplier is that the cost of transportation of this supplier compared to the Mexican supplier is lower and seems to be more efficient. This because this firm has worked with LA suppliers for a very long time and therefore, are well versed with their modes of operations and the quality of their services. In addition, given that LPS has worked with them for many years, they are aware of the weaknesses and strengths of the supplier in question. [...]
[...] The weaknesses and strengths are looked into and prevailing opportunities are also keenly inspected. Therefore, the body entails an expansion on the following issues: the report providing the total cost in a yearly basis, the disadvantages and advantages of the chosen supplier, dedicated carrier analysis, qualitative analysis and the challenges to take into consideration during the startup period. In the research there are assumptions that have been taken into consideration. For instances, in the research inventories have been omitted, annual days are assumed to be 366 days taking into consideration that the supplies are made seven days in every week and twelve weeks annually which constitutes a year. [...]
[...] This action is of negative impact, as the consumer behavior is at all times unvarying. Challenges in the startup phase The challenges that this firm is yet to face mainly are associated to finances, security, customs, handling and technology. First and foremost, for any firm to address and put a new idea into practice there is need to outsource finances as new ideas come with new things such technology and the man power. All these incur cost at any level of production. [...]
[...] In a nutshell, the best recommendation is the proposed supplier option. The advantages of using the proposed method as LPS' supplier is that the cost of transportation of this supplier compared to the Mexican supplier is lower and seems to be more efficient. This is because this firm has worked with LA suppliers for a very long time, therefore, is well versed with their modes of operations and the quality of their services. Works Cited Christopher, M. Logistics and supply chain management. London: Financial Times Pitman Publishing Print. [...]
Online readingwith our online reader
Content validatedby our reading committee