redesigning logistics

1. LOGISTICS
ASSIGNMENT
Ankit Vyas 2016A08
Libin Chacko 2016B23
Kumar Shreshth 2016A54
Kumar Milan 2016C53
Somok Sengupta 2016D42
Anirudh Jain 2016A53
Ronit Nandi 2016D55

2. AS-IS Export Model
 DESCRIPTION :
• Empty containers are delivered from Eastern Canada at a cost of 500$. It moves from the railway yard to the
Third Party Logistics provider’s consolidation yard.
• LUMBER is transported 350 km by truck from Kamploops in British Columbia to the consolidation yard in
Vancouver.
• TRANSLOADING takes places at the consolidation yard of the 3PL’s yard and then when on the port’s
reservation system a date is set, the lumber is shipped to the dock.
 BENEFITS OF THIS SYSTEM :
• Distance to be covered was less.
• No rent has to be paid for the trans loading space.
• There is no internal rail movement
 CHALLENGES WITH THIS SYSTEM:
• This system adopted leads to congestion in the roads
• Transportation costs are high for transportation of lumber,
• The noise levels at the port are very high.

3. TO-BE Export Model
 DESCRIPTION :
• CP rail services Cache Creek therefore empty containers can be dropped off at the terminal
• Lumber is now to be transported only 90 km by truck from Kamploops in British Columbia to Cache Creek.
• TRANSLOADING takes places at Cache Creek from where it is transported to the dock via rail
 BENEFITS OF THIS SYSTEM :
• Reduction in road congestion
• Transportation through rail and lesser cost
• 15% reduction in greenhouse gas emissions such as CO2.
• Noise level at the ports are reduced due to this.
 CHALLENGES WITH THIS SYSTEM:
 Monthly rent of trans-load facility and other administrative charges
• Initial capital costs may be high
• Coordinating and communicating with all stakeholders and getting them on board might prove to be a
challenge.

4. Cost-Benefit Analysis
Data has been forecasted for 5 years with the following assumptions
• Forecast through 2 point moving average
• 85% of movement of Forest and agriculture product is through Trucks
• Container capacity for an FEU is 25 Tonnes
• Fixed and overhead cost at port is 80000
• Depreciation of capital cost is by straight line method over 5 years
• We are working only on the five acres in Cache Creek over the five years
• Cost-Benefit analysis will only be done on the forecasted values

5. Cost-Benefit Analysis
Important Figures
Actual Forecast
2013 2014 2015(F) 2016(F) 2017(F) 2018(F) 2019(F)
Inbound logistics (MT)
3956447 3760551 3858499 3809525 3834012 3821768.5 3827890.25
no of FEU that will be handled at Cache Creek
62400 62400 62400 62400 62400
No of FEU to be operated by old system
68788.97 67123.85 67956.41 67540.13 67748.27
"As is system" cost
Total
313069739 309106763 311088251 310097507 310592879
For no of containers processed through Cache creek 149352000 149352000 149352000 149352000 149352000
"To be system" cost
Cache Creek Part
108767200 108767200 108767200 108767200 108767200
Port Part
164557739 160594763 162576251 161585507 162080879
Total Cost for the To-Be Operation
273324939 269361963 271343451 270352707 270848079
Benefit only for Containers processed at Cache creek
40584800 40584800 40584800 40584800 40584800
Benefit % 27.2% 27.2% 27.2% 27.2% 27.2%
Overall Benefit
39744800 39744800 39744800 39744800 39744800
Benefit % 12.7% 12.9% 12.8% 12.8% 12.8%

6. BENEFIT SUMMARY
•Reduction of overall costs
•Efficiency increase in the supply chain
•Faster movement of Lumber
•Greenhouse gases emission reduced leading to better
environmental conditions