Easy Internet Café – Case Study
Environmental and Root Cause Analysis
Alternatives and Options
Recommendation and Implementation
Monitor and control
It is a fact that the company didn’t achieved the best results in last years, reason way a radically revamp of our operations is required. In order to implement the new strategy regarding the franchise for easy internet cafe we qualified 4 offers from UPS, Excel Globalserve and Ingram for 3rd party logistics. My analysis took in consideration the following factors: total cost per store, ownership of goods, experience and expertise in supply …show more content…
This figure included eIc labor costs of £602 per store. All calculations were based on a forecast of opening 4 new franchises per week for the next 3 years. The total annual logistics costs (excluding outbound transport costs which were eventually billed to the franchisee) are approximately £270,000, which included annual labor costs of £125,250 (based on 208 stores opening per year). If store openings will be fewer, the labor costs will still considered to be fixed.
Outbound transportation costs of eIc’s equipment to each franchisee were divided into 3 zones based on distance from the UK:
• Zone 1 - closest to UK (France, Spain, Netherlands) - £300 per store
• Zone 2 - mid-range from UK (Poland, Czech, Finland) - £450 per store
• Zone 3 – farthest from UK (Greece, Turkey, Bulgaria) - £750 per store.
Generally speaking the outbound transportation differentiates the steps and costs for each store/franchise. The predecessors plan worked pretty well from point of view of marketing impact (opening simultaneous 10 stores per week), but ignored the costs associated with. The negotiations, investigation and discussions with a potential franchisee could take days for a simple individual franchise to several months for some of the more complex deals that included multiple locations. Some of the “activities” were logistics-related while others were not. The labor cost was fixed not individualized. The predecessors plan also created a sequence level,