Supply Chain Management

Case study 4 Basic Warehousing

AFG Food Manufacturing company has a Distribution Center(DC) at Rosario, Pasig
City, it is the biggest in both in space and sales contribution, its gross monthly sales is at
Php 400 million a month on the average. Manpower for Rosario DC is a combination of
Regular employees and contractual employees (5 months). The warehouseman and
Forklift operators are regular employees and all warehouse helpers are all contractual,
thus, every five month the DC has to train new batch of helpers. The regular employees
are all active union members.
The forklift operators allow some warehouse helper operate the Forklift for the purpose
of helping them acquire new skill, but the real intention was to let these helpers to do for
them their assign job, while they sit idly.
Mr. Al Cappucino is the new DC Manager for Rosario DC, he came from a small DC
operation in the province, thus his posting is considered as a promotion. Prior, to said
promotion there were talks that the position of a DC Manager will be given to the DC
dispatcher of Rosario DC, a person in charge in scheduling deliveries and stock
transfer. This was assured to him by the outgoing DC Manager and Area Distribution
Manager, but it so happened that Mr. Cappucino was appointed by the Supply Chain
Director. Mr. Al Cappucino find it difficult to adapt to the new environment, the Area
Distribution Manager is not supportive to him, and so is the Dispatcher.
There is a problem in Warehouse or DC space, Production Department is complaining
because of the slow pull-out of stocks in the production floor thus resulting to production
floor congestion. Production Department always threatens to stop production of stocks
because of said congestion. There was a slow issuance of stocks to trucker for delivery
also because of down material handling equipment (Forklifts and Hand pallet truck) and
sometimes none availability of pallets. Sales in terms of volume are increasing 20% per
year, production or machine capacity was increased but DC space remained as is and
so with the number of DC personnel.
Damage products is also increasing because of poor practices in product handling,
Regular warehouse personnel are not cooperative with Mr. Cappucino, they hardly
follow his instructions, there was this incident wherein Mr. Cappucino gave a stern
sanction against one of the operators, but this was brought to the attention of thr Union
leaders and the sanction was never implemented.
If you are Mr. Al Cappucino how will you address the various problems affecting Rosario
DC or warehouse operations
Answer:
Defined problems:
1. There is gap in managing and monitoring regular and contractual workers which
resulted in unfair treatment among employees.
2. Current system is not efficient due to the training to be repeated for new batch
every 5 months
3. There is internal conflict in management team where the Manager (Mr. Al
Cappucino) would not gain respect from the tenured member and apply power on
his subordinates.
4. There is an inconsistency implementation of sanctions by the Union leaders.

5. There are existing operational problem such as DC warehouse space, delayed

pull-out stock that caused production floor congestion, down material handling
equipment, short of pallets, increased damaged products
Statement of the Problem:
Given the situation that Mr. Al Cappucino are put in the place of various problems
ranging from personnel to operation, as a newly appointed Manager of the DC, he must
be able to take actions against the shortcomings to shape up behaviors, attitudes of
employees as well as to make necessary change in operation. With such challenges,
Mr. Al Cappucion should work on series of action to fix the above-mentioned problems.
Objective:
This paper, hence will elaborate some Alternative Course of Actions that Mr. Al
Cappucino as DC Manager need to follow to shape up the team and operation under his
supervision.
ACA 1 for Problem 1 and 2
First, Mr. Al Cappucino would make suggestion to regularize contractual workers based
on their performance and productivity over the period of 5 months. To do this, a scorecard based evaluation must be in place and cascaded to the in orientation session upon
commencement.
Secondly, As Union member, Mr. Al Cappucino needs to make suggestion to The
Company Union to open opportunities to workers who are regularized from contractual
contractual to join Union. This non-monetary reward will work as additional benefits and
morale support to employees.
ACA 2 for Problem 3 and 4
Mr. Al Cappucino would need to have more catch-up with his team to get closer to them
and understand them more. He would also ensure that all process and procedures
implemented by the company to be adhered properly. As he is directly appointed by the
Supply Chain Director, he must show his competence to handle tasks and able to shape
up the team. For the case of stern sanction not being implemented by the Union
Leaders, he would have it reported or escalated to his superior.
ACA 3 for Problem 5
Once the problems stem from human attitude, Mr. Al Cappucino can focus on the issue
of warehouse. He first should look into:
1. Spare up the warehouse for more space
2. Do inventory for the pallets and material handling equipments to check which are
working and which are not. Consequently, he may need to make request for new
pallets to replace the damaged one.
3. Check the shifting of warehouse men and warehouse helpers to ensure that at all
time there are coverage of both. Raffle the schedule and people may also be a
good trial to build up integration among team members.
4. Finally, he needs to do inventory throughout the machine to forecast for
replacement or maintenance. This is to set ready for increased production
volume.
Recommendation