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Logistics and Project Planning at Easyinternetcafe Ltd

Autor:   •  October 4, 2017  •  Case Study  •  2,079 Words (9 Pages)  •  277 Views

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Logistics and Project Planning at easyInternetcafe Ltd.

Report on: Third Party Logistics (3PL)

Module 3

Session 8

Prepared by: Joanna Bentum

Member ID: 8001063

March 8, 2016

Executive Summary

        

        

Table of Contents

Executive Summary                                                                        2        

Issue Identification                                                                         4

Root Cause Analysis                                                                4

Alternatives and Options                                                                7

Recommendations                                                                        8

Implementation                                                                        9

Monitor and Control                                                                 10

        

Issues Identification

        Throughout this case there are several different issues that easyinternetcafe (EIC) has faced, are currently going through, and can see arising in the future. For the purpose of the written report four issues facing EIC identified have been identified.

  1. Between 1992 and 2002 EIC budget produced a deficit and they ended have loses of £80-100 million. Due to the heavy investments into company owned stores at each new store opened, EIC was having trouble keeping their business profitable.
  2. There is and was a lack of an efficient logistics system. Without this type of system the company could not keep up with the level of activity and were not able to provide cost saving, easy logistics processes for the equipment to the franchises.
  3. There were a couple different issues in regards to opening franchises. Firstly, there was no consistent timeline laid out for opening new stores; each franchise had different time frames they worked in. Secondly, there was no project plan for opening stores. If a project plan was in place logistical and non-logistical operations for the stores would be organized within a similar time frame of opportunity.
  4. Each franchise location consists of different processes and costs, depending on where the store is located.

Root Cause Analysis

Qualitative Analysis

EIC is facing closing their doors in nine months. In order to avoid is devastating effect they must make a profit. Not only is growth essential here but, logistical activities need to be cost effective. Outsourcing could be an option for activities such as logistics, as EIC considers this function to be a non-caring activity. To look closer into EICs situation a SWOT (Strengths, Weaknesses, Opportunities, and Threats) will be examined.

SWOT Analysis

Strengths

  • Experts in yield management
  • Consumers have access to the internet for one of the lowest costs around
  • EICs founder is a well renown entrepreneur
  • EIC has established itself as a well-known internet café throughout Europe; as well into other continents
  • EIC offers the largest internet cafes in the world
  • EIC is recognized and supported by the general public
  • EIC has earned recognition for innovation, marketing, use of technology, and investment in high and attractive retail properties

Weaknesses

  • The internet bubble has already burst
  • ECI is too large for the market and needs to downsize
  • EIC did not put a project plan (operation plan) in effect for new stores
  • Each store has high investments and fixed costs
  • The weight of decision making regarding large investments
  • The revenues levels needed to not only make a profit but breakeven were quite large
  •  The high expectations for growth and revenue did not happen

Opportunities

  • Re-asses operations
  • Lower or eliminate need to large investments going forward as franchises can take this cost
  • Decrease drain on capital
  • Open 10 new stores in 2-3 years to create quick growth
  • Eliminate the majority of staff at the cafes
  • Downsize to smaller cafes
  • Create a unity amongst cafes; branding
  • Outsource non-caring activities

Threats

  • Outsourcing logistics functions will mean no direct control of these functions from EIC. As this function has become necessary and important to EIC after the strategy change this might be difficult to let go of
  • Logistics has and can act as a bottleneck for growth. This has also lead to high costs and losses
  • The logistics system needs to be efficient and feasible to handle increased levels of activity and help make easy cost efficient processes

...

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