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Phantom Glass LTD Case Study: Assignment #1

The document discusses recommendations for Phantom Glass Ltd. to improve its supply chain management and reduce inventory costs. It suggests storing glass sheets unpacked and packaging only at dispatch to save storage space and handling costs. It also recommends producing odd glass sizes only on order through an ERP system to control overproduction and inventory levels of these items. Additional warehousing space may not be needed if existing inventory includes safety stock or damaged goods. The logistics department could be improved by flattening the organization structure, closely coordinating with customer service for dispatch schedules, and using an ERP system to share production plans company-wide.

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Nazahat Rasheed
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218 views3 pages

Phantom Glass LTD Case Study: Assignment #1

The document discusses recommendations for Phantom Glass Ltd. to improve its supply chain management and reduce inventory costs. It suggests storing glass sheets unpacked and packaging only at dispatch to save storage space and handling costs. It also recommends producing odd glass sizes only on order through an ERP system to control overproduction and inventory levels of these items. Additional warehousing space may not be needed if existing inventory includes safety stock or damaged goods. The logistics department could be improved by flattening the organization structure, closely coordinating with customer service for dispatch schedules, and using an ERP system to share production plans company-wide.

Uploaded by

Nazahat Rasheed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PHANTOM GLASS LTD CASE

STUDY
Assignment #1

Supply Chain Management


Submitted to: Mr. Abdullah Athar

Fasih Ur Rasheed
Student ID: 20181-23571
Q1. To bring down the inventory carrying costs which includes carrying cost for packaged material,
would you suggest the storage of glass sheets in an unpacked condition and packaging only at the time
of dispatch?

Answer:

The idea of storage of glass sheets in unpacked condition and packaging at time of dispatch is better as
packed glass required 30% more area than unpackaged glass. The carrying cost of glass from
manufacturing unit to warehouse will also be reduced. As the company is already not following the
standard of 175 CSQM and is currently standing at 250 CSQM this reduction in storage area would be
fruitful. Though extra carefulness would be required during handling but it will also reduce the time for
forklifts to segregate inside the ware house. As the problem of wastage at warehouse is already at an
alarming level careful and proper handling of the glass would be required to do so.

Q 2. What Measures would you suggest to phantom to reduce the inventory?

Answer:

To reduce the inventory level at Phantom glass I would suggest the company to work on policy in which
they manufacture all the odd sizes on the order basis called Make to Order.

The company is facing the problem in maintaining the inventory of odd sizes and it is give that at any
point of time the company is holding 60% of total value of odd sizes.

The company cannot stop manufacturing the odd sizes as the 50% of the total sale of the company is of
odd sizes, but it can also try to make glass of standard sizes and then cut them as per the order. This
would not only reduce the cost related to production and would result in less error at operator side but
would also help in controlling the cost and number of packaging boxes to fit the required size. Moreover
it can also introduce and ERP system through which they can check whether there is an inventory
already available for the size required or oversize glass which can cut to fit need. This would not only
help in controlling overproduction but also reduction of current inventory and losses.

Q3. In light of storage density they are presently having, is this case for additional warehousing space?
Justify.

Answer:

The data shows that the inventory turnover ratio is 3.8 million CSQM.

The total sale of the year is 25.9 million CSQM So, inventory turnover ratio = total sales /avg. Inventory
Therefore, avg. Inventory = total sales / inventory turnover ratio = 25.9 / 3.8 = 6.8 million CSQM

According to the data given the ending inventory holding of the year is 7.3 million CSQM

The additional space is required to store 0.5 million CSQM of material.

But also though no data or reference is given for the case that the existing inventory may consist of
items that were excessive and were made as safety stock or in face of any damage that might have occur
during transportation. This inventory has to be taken into account to check whether the new order can
be fulfilled by the existing inventory or not before going for the option of additional warehousing space.
Q4. How will you organize the logistics activity at phantom for improvement in the productivity,
effectiveness and efficiency of logistics department?

Answer:

Organization should have flat organization structure and the information as easily available to every
single department. The coordination between the logistics department and the Customer Service
Department (CSD) should be very close and CSD should also have the knowledge of the production
schedules. So there is no delay in the issue of dispatch schedule to the logistics department.

If due to the lack of information there is a delay in confirmed dispatch schedules to logistics by customer
service department this will lead to part loading of the truck , longer waiting of truck (thus attracting the
penalty) , delay in loading and improper utilization of contract labour that are paid on a daily basis.

Logistics Department should also receive the daily production schedule and prepare the stock location
plans. This can be done through introduction of ERP where the production plan can be shared with
every other department prior to the operations. Moreover ERP would also help in structuring and
reorganizing of the warehouse according to the production and dispatch plan along with proper
placement and area optimization of the existing space.

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