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Dunder Mifflin Logistics

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matthew worona

on 27 March 2013

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Transcript of Dunder Mifflin Logistics

Retail Headquarters Transportation Shipbuilding -Online order processing – reduction of labour and inventory handling costs

-Increased delivery accuracy Warehouse Inventory Lumber
& Paper External
Customers Presented by Peak Consulting
Kaitlyn Veitch
Matthew Worona
Mohammad Ranjbar
David Munro
LingHui Cai Dunder Mifflin Case SWOT Issue Identification Dunder Mifflin must formulate and implement a fully integrated logistics model. In particular, a shared transportation management system must be developed. Strengths Weaknesses Opportunities Threats Opportunities for Consideration Risk Mitigation Timeline Cost Savings Summary Agenda Creating a logistics network to increase net worth. Issue Identification
Risk Mitigation -Large conglomerate with substantial buying power

-Each business is highly specialized and posses expertise in their own industry

-Subsidiary companies well situated for operations along eastern seaboard -Businesses currently operating independently, increased costs

-Logistics and transportation are not integrated; no shared systems

-Outsourcing of functions which could be done within Dunder Mifflin -Reduction of domestic production in North America could adversely affect shipping industry

-Increased outsourcing of back office logistical planing -Estimated savings of $40 Million based on the internal analysis of aligning to an integrated logistics model

-Vertical integration of certain firms within Dunder Mifflin

-Upgrade technology across-the-board

-Corporate reorganization and consolidation of support functions Centralize logistics and transportation division. Alternative 1: Develop logistics team at the divisional level. Alternative 2: Projected Costs Projected Savings Fit with Organizational
Structure Level of Increased
Efficency Level of External Risk Key Evaluation Criteria - Shared information and Functional department between Paper and Lumber
-Oursource transportation and inventory managment to the departments
-Lumber provide raw materials for paper production Centralization of Warehouse and Inventory management Eliminate redundancy, reduce inefficiency
Improved accuracy of on-hand inventory
Creation of area for competitive advantage Implementing updated technologies
Optimizing operations
Managing corporate organization Focus on cost savings
Eliminating redundancy
Increase transparency
Decrease inventory holding costs Reevaluate the industry
Shift focus to increasing external customer base
Identify cost saving opportunities 1 Year 2-3
Year 3+
Year High potential savings

High associated costs Transportation Delivery time reduction
HR Cost Reduction Administrative and consolidation costs
Technological investment (ERP)
ERP System Development $631,000
Employee training Warehouse & Inventory Moderate/high potential savings

Moderate associated costs Reduction of on-hand inventory and inventory holding costs
Reduce safety stock costs by more than 17%, equating to a 5% reduction in total inventory cost Administrative and consolidation costs
Technological investment
IBM Sterling Supply Chain Management Software - $10,000
Employee training Moderate/high potential savings

Low associated costs Online order processing: reduction of labour and inventory handling costs
Increased delivery accuracy Pushing of online order processing: employee training
Technological investment: Saas Tracking
Setup and Support Costs Moderate potential savings

Low associated costs Reduction of raw materials cost
Transportation and inventory savings Administrative, consolidation and
strategic alignment costs HH and
External Customers OPP and Hacksaw -Consolidation of transportation resources
-Responsible for all transportation activities
-Efficiency and time savings Internal Implementation Issues Incremental approach
IT research and development
Rewards & recognition External Implementation Issues Integrated communications
Supplier relations plan Transportation Transportation Consolidation of transportation resources Efficiency Effectiveness Specialization Economies of scale
Duplicate resources
Functional departments
Additional layers of Mgmt Expertise and knowledge
Shared Information system
Shared R&D
Shared technologies Focus on one industry
"What is does best."
"What is knows best" Warehouse Inventory Consolidate management of warehouses and inventory Increased efficiency
Improved accuracy of on-hand inventory
Better demand forecasting
Creation of area for competitive advantage Cost of software ranges from $5,000 – $10,000
Inventory optimization has been proven to reduce safety stock costs by more than 17%, equating to a 5% reduction in total inventory cost Parakarry Transport
Sonic Transport
PJB Railway
Mannfred (Transportation) Centralized within Mannfred Logistics Questions ?
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