Consider yourself a consultant assigned to develop a supply chain management strategy for the company Throx. You are tasked with evaluating the company’s recent performance and recommending changes (decisions) to improve supply chain management performance. You should use concepts and methods discussed in SCM 301 to undertake these two tasks.
Company Background Information
Throx sells higher-end custom-design socks in three-sock sets (rather than two). The company operates from a small packaging and distribution facility in Richmond, CA from which it ships product to customers. Given the company’s location and focus, 97% of sales are in California, primarily in the major urban areas of the San Francisco bay area, Los Angeles, Sacramento (and last but not least) San Diego. The company sells exclusively via online sales, at an average price of $15/three-sock set, plus shipping costs charged to the customer.
The company currently orders its product from the Chinese sock manufacturer Zhejiang Datang Hosiery Group Co., Ltd in so-called “Sock City.” It orders socks in packs of 20 three-sock sets, which are then broken down into individual three-sock sets at the Richmond facility for sale to customers. Socks are shipped via truck to the port of Shanghai to the port at Los Angeles-Long Beach. Once offloaded in Los Angeles-Long Beach, the socks are shipped via truck to the Richmond facility. On average, shipment from the manufacturer to the Richmond facility takes 4 weeks. In addition to the transit time required for shipment, the lead time from when an order is placed with the manufacturer to when it is shipped from Zhejiang is 2 weeks. If the product ordered by a customer is in stock at the Richmond facility, it typically takes 1 day to process an order and ship it out, although the maximum units that can be shipped in a week is currently 1,500 given the facility’s minimal labor force and packaging equipment.
ScholarMatic: Explanation & Answer
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