Supply Chain Technology-Managing Information flows Supply Chain Management A Logistics Perspective 8E by Coyle
CASE 6-1 Catnap Pet Products Catnap Pet Products (CPP) of Saskatoon, Saskatchewan, in Canada manufactures fancy pet kennels, Unlike traditional wire cage kennels. the Catnappers synthetic wicker kennels arc attractive and functional. They are available in six colors and six sizes to accommodate all sizes of cats and dogs. Annual sales have averaged 50.000 units over the past three years. CPP has no sizeable competitors and sells the product directly via the Internet on http://\"ww.catnapping.ca and through five home furnishings mail order catalogs at prices ranging from $99.95 to $279.99 CDN plus shipping and handling. Catnappers consist of four primary components: the wire frame and door (sourced from Nampa. Idaho), a plastic floor pan (Calgary. Alberta), weaved resin panels (Tijuana. Mexico), and shipping boxes (from nearby Regina. Saskatchewan). The cornponents are assembled. packaged. and warehoused at CPP's Saskatoon facility. CPP management develops quarterly forecasts using Excel macros and shares them via email with each supplier along with the monthly orders for components. Approximately 35 percent of customer orders are placed through CPP's Web site with the remaining 65 percent coming through its mail order partners. The two largest sellers place daily orders using Internet-based EDI, two others send weekly orders via e-mail, and the smallest catalog company periodically faxes in orders. All customer orders are sent from CPP via small package carriers as no inventory is held by the catalog companies. Over the years, the company has cobbled together a variety of technology tools to support Its efforts. Key components include an e-commerce package to manage the Web site and order taking. a basic warehouse management system that helps cpp monitor inventory levels and manage order picking. and shipment management tools from its primary package carrier to help with routing. documentation, labeling. and tracking. Other processes arc managed using a structured query language (SQI.) database, spreadsheets, and an accounting software package. At a recent trade show. CPP executives were approached by two major retailers. PETCO and Target. about carrying the Catnappers product line. The projected volume of these two customers would take annual sales to 250.000 units. While company executives were initially ecstatic. they quickly realized that the current capabilities of the Saskatoon facility and the CPP "information system" could not sustain such volume. Still, they. did not want to turn down the business windfall and began working on a plan to handle their new customers. The first planning meeting generated a basic strategy. The company would continue to serve its current customers through existing facilities and processes. In terms of the additional volume. CPP would manage the sourcing of components and use a contract manufacturer in China to produce the Catnappers for PETCO and Target. The product would be shipped to San Diego. California, via ocean container service and a thirdparty logistics company would warehouse the inventory and manage final delivery to PETeO and Target stores . 1: Given its volume growth and supply chain process changes, what technology challenges will DPP face? 2: As the scope of the CPP supply chain expands, which information technology capabilities will be most important for the company to purse? 3: From an information sharing standpoint, how will the requirements of PETCO and Target differ from CPPs current customer base? How should CPP respond to these requirements?
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