DFA Supply Chain CaseCOMM Consulting Group

Agenda• Decision Overview• Quantitative Analysis• Qualitative Analysis• Summary of Viable Alternative• Recommendation• Questions

Decision Alternatives

• Do Nothing

• Keep Sparks warehouse and contract 3PL to handle risk and waste associated with trucking from Sparks to Oakland port

• Keep Sparks warehouse, but use rail connection in Reno, Nevada during high risk times of inclement weather (Nov-March) to hedge risk associated with dangerous path

• Move warehouse facilities to Oakland Port

Cost Analysis

Quantitative Analysis

  Current Situation Alternative Option

Storage, Handling, Loading, and Unloading Costs per pallet: $15 $33

Monthly export loading flow in Containers 120 96

Cost of Shipping Fallon to Sparks 358 N/A

Oakland to Sparks Nevada Round Trip Cost per Truck $1,320 N/A

Fallon to Oakland Round Trip Cost per Truck N/A $1,475

Cost to ship to SE Asia per month 48,000 38,400

Containers to Columbia 28,800 23,040

     

Cost of round trip to Oakland per month $201,360 $177,000

Alternative provides annual cost savings of

$113,760 or .0018/lb

Quantitative Analysis

Monthly:

Current SituationTrucking Cost $201,360Handling and holding cost $25,200Export Shipping $76,800

$303,360Alternative OptionTrucking Cost $177,000Handling and holding cost $55,440Export Shipping $61,440

$293,880

DFA Competitive Priorities

• Customer Oriented

• Global Mindset

• Focused on the Future

Qualitative Analysis

Qualitative Analysis

• Lead Time• Risk• Customer Satisfaction• Ability to grow

Decision Summary

Contract forward warehouse in Oakland• Less Expensive

• Shorter Lead Times

• Reduces Risk

• Ability to grow in the future