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  • CoolAir LSCM Case Study Analysis-1

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    The document discusses the dilemma facing Cool Air, a manufacturer of commercial air conditioners. Nearly 80% of Cool Air's sales come from replacement units, so customers require immediate delivery when their air conditioners break down unexpectedly. Currently, Cool Air stocks 40 models across 20 distribution centers around the country. A consultant recommends reducing this network to 4-5 warehouses to cut costs, but this may hamper immediate delivery. Alternatively, the marketing manager proposes expanding to 30 locations with full product ranges, but this would increase expenses. The document suggests Cool Air improve logistics by partnering with couriers for 24-hour delivery, set up call centers, deploy an online support website, and use SAP for improved inventory management to better serve

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    The document discusses the dilemma facing Cool Air, a manufacturer of commercial air conditioners. Nearly 80% of Cool Air's sales come from replacement units, so customers require immediate delivery when their air conditioners break down unexpectedly. Currently, Cool Air stocks 40 models across 20 distribution centers around the country. A consultant recommends reducing this network to 4-5 warehouses to cut costs, but this may hamper immediate delivery. Alternatively, the marketing manager proposes expanding to 30 locations with full product ranges, but this would increase expenses. The document suggests Cool Air improve logistics by partnering with couriers for 24-hour delivery, set up call centers, deploy an online support website, and use SAP for improved inventory management to better serve

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    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPT, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    58 visualizzazioni7 pagine

    CoolAir LSCM Case Study Analysis-1

    Caricato da

    pura_malli
    The document discusses the dilemma facing Cool Air, a manufacturer of commercial air conditioners. Nearly 80% of Cool Air's sales come from replacement units, so customers require immediate delivery when their air conditioners break down unexpectedly. Currently, Cool Air stocks 40 models across 20 distribution centers around the country. A consultant recommends reducing this network to 4-5 warehouses to cut costs, but this may hamper immediate delivery. Alternatively, the marketing manager proposes expanding to 30 locations with full product ranges, but this would increase expenses. The document suggests Cool Air improve logistics by partnering with couriers for 24-hour delivery, set up call centers, deploy an online support website, and use SAP for improved inventory management to better serve

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    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPT, PDF, TXT o leggi online su Scribd
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    di 7

    Case# 3 Cool Air Airconditioner

    Anirban Jawahar Siddharth

    Case 3 - Dilemma at Cool Air


    Brief Introduction Cool Air Manufacturer of Commercial Airconditioning Units. Customers Malls, Restaurants. Nearly 80% sales are Replacement models. 20 distribution centers, warehouses around the country. These 20 centers were stocking 40 different models.

    Case 3 - Dilemma at Cool Air contd...

    Problem Statement Optimize the distribution network for Cool Air and revive sales. Air-condititioner breaks with little or no warning. Customers cannot wait for repair work. Customers settle for immediate replacement. Suppliers has to respond with in no time.

    Case 3 - Dilemma at Cool Air contd...

    Consultant Reliable Logistics Opinion Shrink the distribution network to 4 or 5 strategically located warehouse.

    Pros: Can achieve reduction of 25% operation cost.

    Cons: Rapid and immediate delivery will be tough.

    Case 3 - Dilemma at Cool Air contd...

    Marketing Manager Opinion Expand to 30 locations with a full range of products.


    Pros: Immediate replacement availability.

    Cons: Adds to the company's expenses.

    Case 3 - Dilemma at Cool Air contd...

    Our Group suggestion


    Improve the logistic operations. Hire courier companies who can deliver in 24 hrs time. Set up call centres in Tier I cities / Tie up with call centers to facilitate customers and track the orders. Also attend to complains. Deploy website for online request and support. Use SAP for better inventory management and order processing. May expand the distribution network to few more strategic places.(not required in case courier company takes care of the logistics and after SAP implementation) 6

    Case 3 - Dilemma at Cool Air contd...


    Pros: Better Inventory Management will reduce carrying and ordering cost Ease of accesibility for the customers. On-time delivery to customers Cons: Will increase the Fixed Cost initially (Sunk Cost) but will reduce variable cost. So, in long run Cost will comedown significantly The model is an outsourcing model so all the 7 limitations of outsourcing will hold good

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