The purpose of this assignment is to explore outsourcing opportunities in order to propose the use of a third-party logistics (3PL) solution. Begin by reading "Case 12.2 - HQ Depot," in 250-500 words,

1399230 - C en gage L ea rn in g ©

A lig ni ng Alig ni ng Suppl y S uppl y C hai ns Chai ns 505505

C ASE C ASE 12.21 2.2

H Q H Q D ep otDep ot

JJ un e, un e, JJ ulyu ly , , aa n d n d AA ugu st u gu st aa r e re u nun usu ally u su ally cc h allen gin g h allen gin g mm o non th s th s ff o r o r HH Q Q DD ep ot, ep ot, ww h en hen tt his h is C hic a g o -b ased Chic a g o -b ased ret ailer ret ailer ex per ien ces ex per ien ces sig nsig n ca nca n t t d em an d dem an d fofo r r it s it s pp ro d ucts ro d ucts in in res ponres pon se se to to th e th e ii a n nan n ual u al oo p en in g p en in g oo f f ss c h ools c h ools aa n d n d unun iv eriv er sit ies sit ies in in tt he he mm on th s o n th s oo f f A ugu st A ugu st aa n d n d SS ep tem berep tem ber . . HH Q Q dep ot d ep ot ii s s aa n n oo m ni- c h anm ni- c h an n el nel rr et ailer etailer oo f f a a bb ro ad ro ad rara n ge n ge oo f f oo c e ce ss u ppli es uppli es aa nd n d bb ack -to -s c h ool a ck -to -s c h ool  i t emit em s s su ch su ch as a s c o mco m p uter s, p uter s, pp r in ter s, r in ter s, aa n d n d acces so ries , a cces so ries , i n in ad dit ioa d dit io n n to to m orm or e e tr a d it io n al t r a d it io n al iit em s tem s su ch su ch aa s s nn o teb oooteb oo li n g li n g ffo ld er s, o ld er s, ww r it in g rit in g imim p lem enplem en ts , t s , etet c . c . MM o st o st oo f f thth e e SS K U ’KU ’ s s aa v aila bv aila b le le aa t t HH Q Q ks, k s,  D ep ot D ep ot aa r e re imim pp o rted orted ff roro m m a a nn u m ber um ber oo f f ee m ergin g m ergin g aa n d n d dd ee vel ovel o ped ped mm ark et s, a rk et s, ss u ch uch aa s s CC h in a, h in a, I n dia , I n dia , VV i et nam , i et nam , P hiliP hili p pin es , p pin es , aa n d n d M exiMexi co .co . G iv en Giv en tt he he vv erer y y pp ric e- co m pet it iv e ric e- co m pet it iv e mm ark et ark et in in ww hic h hic h HH Q Q dd epep ot o t oo p er ates , p er ates , mm o sos t t oo f f tt h es e hes e im ported im ported pp ro d ucts ro d ucts aa re re ss h ip ped hip ped by b y cc o non tt ain erain er sh ip s sh ip s tt o o UU .S . .S . ww es t es t cc o ast o ast pp o rts , o rts , a n d an d tt hen hen tt ra n sra n s -- ported ported to to d is tr ib u tiod is tr ib u tio n n cen terc en ter s s in in C hic a g oC hic a g o , , I L , I L , H enHen der so n , d er so n , N VNV , , a nan d d G reenG reen v ille, ville, SC SC via v ia in terin ter -- m od al m od al aa n d n d oo verver -th e- ro ad -th e- ro ad tt ru ck lo ad ru ck lo ad cc arrier s. a rrier s. MM o st o st ff r eq uen tlyr eq uen tly , , ss h iph ip m en ts m en ts ff ro m ro m tt hes e hes e DD C’C’ s s to to in div idin div id u al u al s to res , s to res , aa n d n d to to h oho m e me an d an d bu sbu s in es s in es s a d dresa d dres ses ses fo r fo r e- Com mere-Com mer ce ce cu sto m ers, c u sto m ers, ww er eere fufu llelle d d tt hro u gh hro u gh a a cc o m bom b in atioin atio n n oo f f tt r u ck lo ad , r u ck lo ad , LL T L, T L, aa n d n d ee xp rxp r es s es s ss erer v ic es vic es (p(p a rtic u lartic u l arla rl y y ff o r o r ll t im e-sen sit iv e tim e-sen sit iv e dd el iv er ies ).el iv er ies ). H Q H Q DD ep ot ep ot w awa s s mm a n ag in g an ag in g ii ts ts tt ra n sp orta tio n ra n sp orta tio n oo per atio n s p er atio n s inin t er nalter nal lyly , , bb u t u t tt h e he cc omom p an y p an y d ec id ed dec id ed ii t t w awa ntnt ed ed tt o o ff ococ u s u s oo n n ii ts ts cc o re o re cc o m pet en cyo m pet en cy , , ww h ic h , h ic h , aa c co rd inc co rd in g g tt o o ii ts ts S V P SV P SS uppupp ly ly C hain , C hain , w awa s s ““ m ainm ain t a in in g ta in in g oo u r u r ll ee a d er sh iad er sh i p p in in tt hh e e oo ce ce aa n d n d ss ch ool c h ool ss u ppluppl y y inin d ustrd ustr yy ..” ” ἀἀ e e  c o mco m p an y p an y aa ls o ls o w awa ntnt ed ed tt o o cc en tr a li z e en tr a li z e ii ts ts tt ra n sra n s porta tio n porta tio n oo per atio n s. p er atio n s. LL oo o kin g o kin g cc aref ully aref ully aa t t tt h e he is su e is su e of o f o ver all o ver all p er fo rm an ce p er fo rm an ce in in tt he he lo gis tic s lo gis tic s a n d an d tr a n str a n s porta tio n porta tio n arar ea s, ea s, a a sig nsig n ca n t c a n t a m ou n t a m ou n t ii o f o f v aria bv aria b ili t y ili t y w as w as fo u nfo u n d d in in th e th e tr a n sit tr a n sit tim es tim es an d an d serser v ic e v ic e rel ia brel ia b ili t y ili t y o f o f it s it s sto re sto re a n d an d cu sto m er cu sto m er del iv er ies . d el iv er ies . ἀἀ u s u s th e th e id ea id ea oo f f c en tr a li z in g cen tr a li z in g it s it s lolo g is tic s g is tic s o p er atio nop er atio n s s w as w as c o n sis tc o n sis t en t en t in in th e th e purpur su its u it o f o f u n if ou n if o r m it y rm it y an d an d coco n tr on tr o l l i n in it s it s fufu llm en t llm en t o p er aop er a tio n s.tio n s. ll AA d dit io n allyd dit io n ally , , H Q H Q DD ep ot ep ot hh a d ad set set an an objec tiv e o bjec tiv e oo f f imim p rop ro v in g vin g serser v ic e v ic e to to so m e so m e oo f f ii ts ts oo u tlyu tly -- i n g in g stos to r es res anan d d cu sto m er cu sto m er m ama rk et s, r k et s, w hic h w hic h clea rclea r ly ly w ou ld w ou ld rr eq uir e eq uir e ex pan sex pan s io n io n of o f iits ts lo gis tic s lo gis tic s n et work . n et work . AA c co rd in g cco rd in g tt o o HH Q Q Dep otD ep ot ’’s s V P V P LL ogog is tic s, i s tic s, a n an aa naly sis n aly sis hh a d ad beg un beg un to to stst u dy u dy hh o w ow llon g o n g iit t w ou ld w ou ld tt ak e ak e anan d d w hat w hat it it w ou ld w ou ld co st c o st to to bu ild bu ild up up th e th e co m panco m pan y’y’ s s tr a n sp orta tio n tr a n sp orta tio n ca p ab ili t ies ca p ab ili t ies toto b e be ab le a b le t o to susu p port p port s u ch su ch a a n et wonet wo rk . r k . A s A s a a kk ey ey elemelem en t en t o f o f th is th is pp ro ces s, r o ces s, a a rr ec om men daec om men da tio n tio n w asw as b ei ng b ei ng co n sid eco n sid e red red to to uu sin g sin g a a 3 P3P L L prop ro v id er vid er to to d es ig n des ig n an d an d op er ato p er at e e a a ss ystem ystem to to bet ter bet ter m an agm an ag ee th e th e tr a n sp orta tiot r a n sp orta tio n n of o f p rpr od ucts o d ucts fr o m fr o m DC’D C’ s s to to lolo c aca tio n s tio n s o f o f c o m panco m pan y y sto res sto res an d an d e- Com mercee- Com merce cu sto m ers.c u sto m ers.In In aa ddit io n , d dit io n , HH Q Q Dep ot D ep ot w an ted wan ted tt o o be be ab le a b le tt o o rea ch rea ch mm arka rk et s et s fo r fo r ww h ic h hic h it it d idi d d nn ot o t a lr ea dalr ea d y y h avh av e e aa cces s, c ces s, ww h ic h hic h ww ou ld ou ld rr ee qu irq u ir e e ee x p an sio n xp an sio n oo f f iits ts lo gis tic s lo gis tic s n et wnet w ork . o rk . AA c ccc o ror d in g d in g tto o th e th e dird ir ecec -- t o r to r oo f f lo gis tic s, l o gis tic s, a n an an aly san aly s isis w as w as u n der ta k en un der ta k en to to stu dy stu dy h ow how lo nlo n g g it it w owo uld uld ta k e ta k e an d an d w hat w hat iit t w ou ld w ou ld cc ost o st to to bu ild bu ild up up H Q H Q Dep ot’D ep ot’ s s tr a n sp orta tio n tr a n sp orta tio n cc aa pab ili t ies pab ili t ies to to bb e e ab le a b le t o to su pposu ppo rt r t s u ch su ch a a n et work . n et work . A s A s a a resres u lt , u lt , a a rec om menrec om men datio n datio n w as w as m ad e m ad e to to ser io u sly ser io u sly inin v es tig aves tig a te te th e th e use u se o f o f a a 3 P L3P L pr opro vv id erid er ..

CopCop yr ig ht yr ig ht 2017 2017 C en gC en g ag e ag e L earn in g. L earn in g. A ll A ll R ig hts R ig hts R ese rvR ese rv e d . e d . M ay M ay n ot not be be copi ed , copi ed , sc an ned , sc an ned , or or dupl ic ate d , dupl ic ate d , in in w hol e w hol e or or in in pa rt. pa rt. D ue Due to to e le ctr on ic e le ctr on ic rig hts , rig hts , som e som e th ir d th ir d pa rty pa rty c on te n t c on te n t m ay m ay be be suppr esse d suppr esse d from from th e th e eB ook eB ook an d/or an d/or eC hapt er(s ).e C hapt er(s ). E ditor ia l E ditor ia l r ere vi evie w w has h as d eem ed deem ed th at th at a nan y y suppr esse d suppr esse d con te n t c on te n t d oe s d oe s n ot not m ate ria lly m ate ria lly a faf fe ct f e ct th e th e oovvera ll e ra ll le arn in g le arn in g eexpe rie n ce . xpe rie n ce . C en gC en g ag e ag e L earn in g L earn in g re se rvre se rv e s e s th e th e rig ht r ig ht to to r e m ore m o vve e ad diti on al a d diti on al c on te n t c on te n t a t a t a nan y y ti m e ti m e if if s ubs eq ue nt s ubs eq ue nt r ig hts rig hts re str ic ti on s re str ic ti on s re q ui re re q ui re it.i t. 1399230 - C en gage L ea rn in g ©

5 06 506 Chapt er C hapt er 1 212

C ASE C ASE Q UESTIO N SQUESTIO N S

1. 1 . W hat W hat r ara tt io n ale i o n ale i s is oo  er ed ered by b y H Q H Q Dep ot D ep ot in in susu p port p port o f o f th e th e id ea id ea of o f u sus in g in g a a 3 P L? 3 P L? D o D o yo uyo u ag ree a g ree w it h w it h th e th e rea so nrea so n s s c it ed cit ed fofo r r th e th e in terin ter es t es t in in a a 3 P L?3P L? 2. 2 . B asB as ed ed on on yoyo u r u r u n der sta n dinu n der sta n din g g o f o f H Q H Q Dep ot D ep ot a nan d d it s it s b u sin ebu sin e ss ss n eed s, n eed s, w hat w hat ty p e ty p e of o f 3 P L3P L rr m m do d o yo u yo u feel feel mig hm ig h t t bb e e o f o f g reag rea tes t tes t p otenp oten titi a l a l v alu e valu e in in ter m s ter m s oo f f a a rel arel a tio n sh itio n sh i p?p? 3. 3 . W hat W hat ss tep s tep s w ou ld w ou ld yoyo u u su gges t s u gges t b e be co n sid eco n sid e red red by b y HH Q Q Dep ot D ep ot a s a s it it b eg in s b eg in s to to an aly ze a n aly ze th eth e fea sib ilif ea sib ili t y ty o f o f fofo r m in g rm in g a a rel arel a tio n sh itio n sh i p p w it h w it h in div id ual i n div id ual 3 P L 3P L prpr ovid er s?o vid er s? 4 . 4 . O nce O nce th e th e sel ecsel ec tio n tio n pp ro ces s ro ces s is is c o mco m p let e, plet e, w hat w hat k in d kin d of o f rr el atio n sh iel atio n sh i p p do d o yo u yo u feel feel ww ou ldo u ld b e be m ost m ost a pap p rop ro p ria tp ria t e: e: ven dorven dor , , p arp ar tn ertn er , , s tr astr a teg ic teg ic a lli a n ce, alli a n ce, or o r so m e so m e oo th er th er op tioo p tio n ?n? Sou rce: Sou rce: Cop yrig ht, C op yrig ht, C . C . J oh n Joh n Lan gley Lan gley JrJr ., ., P h.D ., P h.D ., P en n P en n Stat e Stat e Univ er sit yU niv er sit y . . U sed Used wit h w it h p er mis sion .per mis sion .