A case study regarding corporate strategy and decision making.

1. Letter of Submission
Thursday, 26 July 2018
Assistant Professor Dr. Dazmin bin Daud, CMILT
Lecturer, GL008_ Logistics Strategy
Department of Logistics Management
Faculty of Business and Information Science (FoBIS)
UCSI University
Kuala Lumpur, Malaysia
Subject: submission of group assignment and report and presentation slides.
Dear Sir,
This is our pleasure to submit our group assignment report and presentation slides on “Gl008_
Logistics Strategy” which was assigned to us. It was a great opportunity for us to acquire knowledge
and experience in respect of the implementation of corporate strategy and decision making in logistics
strategy.
We have concentrated our best efforts to achieve the objectives of the assignment and hope our
endeavor will serve the purpose. However, we are always being ready to provide any further
clarification that you may require.
Sincerely Yours,

2. 1
Acknowledgment
This is a great opportunity for us to explore and enrich our knowledge in the field of logistics strategy
through this case study group exercise. Special thanks to our honourable lecturer assistant professor
dr. Dazmin bin daud, CMILT for giving us related knowledge in the class and for helping us to write
this case study.
The aim of this group exercise is to find out the best warehouse by applying logistics strategic views.
In addition to this, we have attempted to understand the implementation of corporate strategies in
warehouse and the decision making therein.
Finally, we like to give thanks to our honorable lecturer again, for being so nice and friendly and for
being supportive all the time when we seek any help and guidance.

3. 2
Table of Contents
1.0 Background .................................................................................................................................3
2.0 Executive Summary and the Underlying Key Strategic Management Concept .........................4
3.0 Critical Analysis and Strategic Management Views ................................................................11
4.0 Problem and Solutions ..............................................................................................................14
5.0 Conclusion ................................................................................................................................19
References............................................................................................................................................20
Appendix – A: CASE STUDY ............................................................................................................21
Appendix – B: PRESENTATION SLIDES.........................................................................................23

4. 3
1.0 Background
Strategic management is a process of analyzing the current situation; developing appropriate strategies;
putting those strategies into action; and evaluating, modifying, or changing those strategies as needed.
(Stephen P. Robbins, 2005)
Logistics strategy is the set of guiding principles, driving forces and ingrained attitudes that help to
coordinate goals, plans, and policies between partners across a given supply chain. (Harrison, Professor
of Operations and Logistics, Cranfield School of Management, UK)
The board of directors, top management and strategic managers and non-managerial staff are
responsible for taking logistics decisions. One of the major responsibilities of logistics decision makers
is to monitor organizational performance and regularly review performance results.
In the given case study, we can see that the senior manager of Abcoat private ltd. Are highly concerned
about the performance of the organization and as a result, they have come up with some strategic plan
to improve the scenarios.
This group assignment report has been prepared as part of the course requirement for gl008 logistics
strategy. In this report, a case study has been selected which contents are related to logistics strategy
more specifically corporate strategy and decision making.

5. 4
2.0 Executive Summary and the Underlying Key Strategic Management Concept
The given case study (refers to appendix-a) relates to the abcoat private limited which is a medium
sized company with around 300 employees. The primary line of business of the company is a supply
of industrial clothing1. It has been observed from the case that the head office of the company is
situated in a major city with three regional warehouses which are located at a strategic location in the
country close to large industrial areas. Due to the presence of the strategic location close to the
customer, Abcoat is enjoying some comparative advantages which led them to know their customer
more closely. The main issue that has been identified from the case is that the sales of industrial
clothing had declined and the retention of three regional warehouses was no longer viable for the
company2.this is a clear sign of potential corporate decline and the major cause of this corporate decline
is a decrease in sales volume. Senior management was anxious to find a cost-saving solution and
therefore favored the closure of one warehouse3. This is a clear indication that senior management
wants to apply renewal strategy more specifically retrenchment. Because the decline in sales is leading
Abcoat to poor performance.
Figure 1: logistics strategic views of senior management of Abcoat Pvt. Ltd.
1 Industrial Clothing: Workwear and Safety wear/Protective wear.
2 Refer to Case Study: Paragraph-5, Sentence-1.
3 Refer to Case Study: Paragraph-5, Sentence-5.
Cause of Corporate Decline
Low Sales Volume
Sign of Potential Corporate
Potential Decline Competitive DisadvantageX
Implementing Renewal Strategy
Cost Cutting through Down Sizing or Closure of one Warehouse
Renewal Strategies
Retrenchment
Competitive Advantage
Because the decline in
sales is leading Abcoat
to poor performance
which ultimately
disrupting to gain
competitive Advantages

6. 5
First strategic move that has been taken by Abcoat is the diversification strategy by introducing new
product line segment of protective sportswear such as wetware4. The diversification strategy is a
corporate growth strategy in which an organization expands its activities and operations by moving
into a different industry. There is two types of diversification- (1) related (concentric) diversification
and, (2) unrelated (conglomerate) diversification. Abcoat has taken related (concentric) diversification
strategy.
Figure 2: The Diversification Strategy Taken by Abcoat Pvt. Ltd.
A renewal strategy is designed to stop an organization’s decline and put it back on a more appropriate
path to achieving its strategic goals. It is applied at the declining stage. There are two types of renewal
strategies: retrenchment and turnaround. From the case, it is also observed that Abcoat is now in a
process of developing alternatives and selecting the best one which can improve the current situation
of corporate decline to organizational growth or organization stability.
Figure 3: Possible Strategy Direction for Abcoat Pvt. Ltd.
4 Refer to Case Study: Paragraph-2
Diversification Strategy Taken by Abcoat
Related (concentric)
Industrial Clothing, Protective Sportswear
Corporate Strategy Direction for Abcoat Pvt. Ltd.
Time Line
Performance
Profit
Loss
OS
Current Direction
Declining
PossibleDirections
OG = Organizational Growth
OR= Organizational Renewal
OS = Organizational Stability

7. 6
Abcoat has taken a three steps approach to come out with the best possible solutions. Senior
management of Abcoat are in a process of developing alternatives and they have invited all the
warehouse supervisors along office manager in a meeting to develop alternative options to solve where
to stock sportswear.5 senior management also put forward their intention of cost savings solutions of
the closure of one warehouse.
Figure 4: Decision making approach taken by Abcoat Pvt. Ltd.
Senior management of Abcoat Pvt. Ltd. Didn’t put forward any idea without discussion and they also
want to observe the response from member and want to do a critical evaluation. It’s a clear evidence
that senior management doesn’t want to take any decision by lack of response 6. Gain, the worthiness
of the decision-making being made largely depends on the credibility of the authority figure. Authority
figure here is the senior management of Abcoat Pvt. Ltd. It clearly indicates the concept of decision
by authority rule7 . Senior management wants to choose the best alternative based on decision by
consensus8 and that is why the brainstorming9 technique is used.
Development of Alternatives will be done by working group based on decision by consensus.10
evaluation and selection of alternatives will be done by the senior management of Abcoat based on
decision by authority rule.
5 Refer to Case Study: Paragraph-3, Sentence-1 and 2
6This is where idea is put forward without any discussions.The idea accepted are being bypass and lack of response from
members and no critical evaluation what so ever.
7The authority figure (such as a manager, chief executive officer, the president and chairman of a meeting) is on e who
makes decision for the group.The worthiness of the decision being made largely depends on the credibility of the authority
figure.
8 Decision made where most members support or in agreement. Members who disagree will get along with most of the
members.
9 Brainstorming allows group members to give ideas (even the incomplete or unfinished ideas). Creative thinking is
encouraged in this method.
10 Decision by consensus:Decision made where most members support or in agreement. Members who disagree will get
along with the majority of the members.

8. 7
Senior manager charring the meeting asked the senior office manager, Ms. Laura Kim, to form a
working group and come up with possible solutions for closure11. This is a clear evidence of brain
storming technique.
Table 1: Brain storming technique - working group formed by Ms. Laura Kim.
Personnel Office Location Role
Ms. Laura Kim Office Manager of Warehouse-
2
Senior of the three Regional
office Manager and will lead
the working group and Table a
Plan.
Office Manager Warehouse-1 Will help in gathering
information and Developing
alternatives.
Supervisor Warehouse-3 Will help in gathering
information
The members of the meeting from the warehouse argued for the preservation of employment that is
the second alternative12. A possible outcome of the second alternative is, industrial clothing be stocked
at two of the warehouse and the third one warehouse used for the sportswear13. But this alternative
does not go with the plan of senior management. Again, if the downsizing is done then the retention
of the employee will face a challenge. The distance between the warehouses and head office are too
great to be enabling for the redeployment of the lower wages paid to the staff and it would not have
been an attractive proposition for the staff who considered moving into the house14.
Figure 5: Issues that need to be addressed while table a plan.
11 Refer to Case Study: Paragraph-9, Sentence-1
12 Refer to Case Study: Paragraph-6, Sentence-1
13 Refer to Case Study: Paragraph-5, Sentence-3
14 Refer to Case Study: Paragraph-7.
Issues that needs to be Addressed
by MS. Laura Kim
Implementing Top Management’s plan
Closure of One Warehouse
Retention/Preservation of Employee
Redeployment/Staffing Plan

9. 8
In this paper, we have tried to come out with possible best solutions based on some reasonable
assumptions. No national circumstances have been considered for the solutions of the case.
Abcoat owns all the building and sites of the warehouse. Warehouse 1 is the smallest and warehouse
2 is the biggest warehouse with a covered area 1,000 square meter and 2,100 square meters. Warehouse
facilities are summarized below in the following table:
Table 2: Description of Warehouse Facilities.15
Warehouse Covered Area
(Sq. Meter)
The condition of the Structure
1 (Small) 1,000 Old and Need Maintenance
2 (Large) 2,100 In Good Repair
3 (Medium) 1,500 In Good Repair
All the warehouse staffing is a combination of office manager, supervisor, store personnel, staff and
van driver. Current staffing of warehouse is summarized below in a table.
Table 3: Current Staffing of Warehouses.
Staff Warehouse -2
(Large)
Warehouse-3
(Medium)
Warehouse-1
(Small)
Office Manager 1 1 1
Supervisor 1 1 1
Store Personnel 14 6 8
Staff 3 3 2
Van Drivers 2 1 2
Total Staff= 21 12 14
15 Refer to Case Study: Paragraph-11 and 12

10. 9
The span of control is the number of employees a manager can supervise as effectively as possible.
From the case study, a vertical span of control can be imagined. Say for example the span of control
for warehouse 2 can be best described with the following figure:
Figure 6: The Imaginary span of control of warehouse-2.
This is the number of levels that are (in)directly managed. It refers to the extent to which the manager’s
wishes trickle down to the lowest levels of the organization. This is also known as depth of control. It
is mainly aimed at the extent of communication between a manager and his subordinates in the levels
he is responsible for.
Considering the span of control top management decided office manager will table a plan. Ms. Laura
Kim is the office manager at the largest of the warehouse and considered the senior of the three regional
office managers16 and that is why he has been given the responsibility to table a cost-effective plan
and take it forward.
From the organizational structure of abcoat, it can easily guess that there are two types of employee
blue collar and white collar in every warehouse. The proposal to close one of the warehouses will
affect both type of employees and that is why apprehension is observed throughout the company17.
16 Refer to case Study: Paragraph-8
17 Refer to Case Study: Paragraph-13
OfficeManager
(MS. Laura Kim)
Supervisor
Store Personnel Van Driver
Staff
Note: Supervisor and Staff are not in the same level. Staff are considered as supporting staff and not part of core activity.

11. 10
Both types of organizational resources have the specific capacity to serve the organization and any
decision will affect this group in different dimensions.
 Blue collar employee:
o Staff, store personnel, and driver
o Capacity: they can perform as they are.
o Downsizing will affect these group and redeployment is not an attractive proposition.
 White collar employee:
o Office manager, supervisor
o Capacity: major value-creating skills and capabilities are available and capable to work
in any changing patterns.
o Can be converted to distinctive organizational capabilities through training and
development
The central idea of the given case study is to identify the appropriate strategic decision that will help
Abcoat Pvt. Ltd. To put it back on an appropriate path to achieve it ‘strategic goals. Following key
problem have been identified from the given case:
Problem 1: Where the sportswear should be stocked?
Problem 2: Finding a cost savings solution to stop the organization’s decline?
Problem 3: Which Warehouse to Close Down?
Problem 4: How to reduce apprehension among the employee?
Problem 5: Which one is the best Warehouse for Operations?
Later, the report, the above problem has been critically analyzed and some solutions have been
recommending based on assumption and logic.

12. 11
3.0 Critical Analysis and Strategic Management Views
3.1 paragraph-1, sentence-2 – (key ideas: competitive advantages and short supply chain)
“The head office is situated in a major city with three regional warehouses situated at strategic
points in the country close to large industrial areas.”
Due to the presence at a strategic point close to the largely industrial area, Abcoat is enjoying some
competitive advantages, like
 Knowing customer more closely.
 Short supply chain – no intermediaries
 Low transportation cost
3.2 paragraph-2 – (key ideas: related concentric diversification)
“Due to changes inthe market a decision has been taken to diversity intoprotectivesportswear such
as wetsuits.”
 It proves that Abcoat is a market-led company and respond to changes in market.
 This is a clear indication of corporate growth strategy in the form of diversification.
 This diversification strategy takes Abcoat private ltd. Beyond the current product and market.
 Abcoat has chosen related (concentric) diversification because they are still within the
capabilities and value network of the organization.
The rationale for diversification strategy is taken by Abcoat Pvt. Ltd.
 This will create economic of scope for Abcoat by applying the organization’s existing
resources or capabilities to new markets and products
 Underutilized resources or competencies can be used through new activity.
 Abcoat’s market power will be increased. Abcoat will be able to cross subsidise one business
form the surplus earned by another.
 Spreading risk across a range of business, that is if one part of the business is in trouble, the
whole business is not pulled down.

13. 12
3.3 paragraph-3- key ideas: (organizational routines and process, distinctive organizational
capabilities)
“The majority of industrial clothing sales came from direct orders whereas the sportswear would be
sold to retail outlets. This represents a significant change in the type of market and would require
changes in working patterns requiring an addition to the sales force.”
 Sales of industrial clothing from direct orders are the regular, predictable, and sequential
patterns of work activities performed by organizational members of Abcoat.
 Whereas sale of sports wears to retail outlets is not a regular pattern of work activities for the
existing organizational member of Abcoat.
 Due to diversification Abcoat needs some distinctive organizational capabilities which can be
used in a verity of ways.
3.4 paragraph-4- key ideas: (decision making approach)
“The warehouse supervisors were called to a meeting to discuss where the sportswear should be
stocked. The office managers associated with each warehouse were also at the meeting.”
 Senior management of Abcoat are in a process of developing alternatives and they have invited
all the warehouse supervisors along office manager in a meeting to develop alternative options
to solve where to stock sportswear.
This is a clear evidence from the case that Abcoat management has taken a three steps approach to
come out with the best possible solutions.
 Step one (1): planning  developing alternatives
 Step Three (3): Analysing  evaluation of alternatives
 Step two (2): decision making  selecting best alternative
Figure 7: Decision Making Approach taken by senior management of Abcoat Pvt. Ltd.
Step-1:Planning
Developing
alternatives
Step-2: Analyazing
Evaluating
alternative
Step-3: Decsion
Making
Selecting best
alternative

14. 13
3.5 Paragraph-5- (key ideas - corporate strategic directions)
“The sales of industrial clothing had declined and the retention of three regional warehouses was
no longer viable. The meeting would need to consider if one of the warehouses should be closed.
Alternatively, should the industrial clothing be stocked at two of the warehouses and the third
warehouse used for the sportswear.”
 What are the possible corporate strategic directions?
1. Organizational growth - moving the organization ahead.
2. Organizational stability - keeping the organization where it is.
3. Organizational renewal -reversing the organization’s decline.
 What is the corporate strategic direction of Abcoat?
Figure 8: corporate strategic directions of Abcoat Pvt. Ltd.
3.6 Paragraph-6, sentence-2 – (key ideas - organizational stability)
“However, the senior management at the meeting was anxious to find a cost-saving solution and
therefore favored the closure of one warehouse.”
 Senior management of Abcoat understand that the size of the market is declining and reducing
the size of the business through closing capacity is a good option to maintains its current
activities and business operations.
 This is a clear evidence of the intention of senior management that they want to apply the
stability strategy for the short run.

15. 14
3.7 Paragraph-9, sentence-1 - (key ideas: decision by authority rule)
“The meeting did not at any final decision and the senior manager chairing the meeting that Laura
Kim should form a working group to consider the possible closure and to table a plan at a meeting
to be arranged in the future suggested it.”
 The authority figure who will make the decisions for the group is the senior management of
Abcoat. Worthiness and credibility of the decision depend on this group.
Figure 9: Decision by authority rule taken by Abcoat Pvt. Ltd.
4.0 Problem and solutions
Problem -1: where the sportswear should be stocked?
Solution: Sportswear can be stocked in warehouse-2
Assumptions and logic underlying the solutions:
1) Warehouse-2 has the largest covered area of 2,100 square meters.
2) Total number of staffs is 21 (1-office manager, 1-supervisor ,14-store personnel, 3-staffs and 2 van
driver)
3) Most of the industrial clothing sales are from direct orders, so the probability of overstocking in
the warehouse -2 is very low.
•Not an authority figure to take
decsion
•Will Tablea plan only
•working group will be headed by
Ms. Laura Kim and supported by
Office manager of warehouse 1
and supervisorof warehouse 3.
Working
Group
•Working Group will come up with
alternative strategic choice
•Strategic choice will be based on
concensus.
Strategic
Choice •Will takethefinaldecisons.
•Worthiness and credibility
decisions depends onthis group
Senior
Managment

16. 15
4) The sales of industrial clothing had declined, and there is a huge possibility that in of underutilized
resources and competencies at warehouse-2
So, it makes sense to use these underutilized resources and competencies of warehouse-2 by
diversification in new activity.
Problem -2: Finding a cost savings solution to stop an organization’s decline?
Solution: closure of one warehouse activity (expensive facility)
Assumptions and logic underlying the solutions
 There are two (2) possible cost-saving solutions:
1. Downsizing
2. Closing a capacity
Downsizing:
Abcoat can reduce the number of employees on the operating payroll by using the following two (2)
techniques –
1) Simply terminate the employment of a certain number of people: this will increase the anxiety
and the overall work environment will be affected which can prolong the declining situation. Ex.
Strike, lock-out etc.
2) Providing incentives to take early retirement and transfer to subsidiary companies: Abcoat needs
to pay a huge amount of cash in upfront, which may lead to a liquidity crisis.
So, it makes sense that downsizing is not a good option for Abcoat.
Closing a capacity:
 Abcoat can close one of the expensive facility and maintains its current activities and business
operations by considering the following cost-saving strategy:
a. Re-deployment of resources. This will reduce hiring cost and tension among the employees.
b. Abcoat can freeze all types of Overtime (OT).
c. Abcoat can cut down the allowance by increasing the condition of allowance (e.g. defective
rate reduction say from 95% to 98%)
d. outsource non-core activity (e.g. security guards, drivers, staffs etc.)

17. 16
so, it makes sense that closing a capacity is good options for Abcoat because this will lead to
significant cost savings.
Problem -3: which warehouse to close?
Solution: closure of warehouse-1
Assumptions and logic underlying the solutions
1. Warehouse-1 is the smallest with a coverage area of 1,000 square meters.
2. Total number of staff is 14 (1-office manager, 1-supervisor ,8-store personnel, 2-staffs and 2 van
driver)
3. Significant matter in staffing in warehouse-1 is that despite having the smallest capacity it requires
2 drivers. the possible reason is delivery cycle time form warehouse to customer. the possible
reason could be a huge distance between warehouse and customer which makes the cycle time
longer. it proves that location wise, warehouse-1 is not suitable for operations.
4. Again, the number of store personnel is high (8 person) in companions to other warehouses which
means the total staff cost is higher in comparison to other warehouse activity which makes the
facility expensive. it is wise to close the expensive facility to attain stability.
5. The structure of warehouse-1 is old and require maintenance. so, it makes sense to close down
warehouse-1 to avoid any expenses required in maintenance which will help to save cost.
6. Further cashflow can be generated by disposing of the old and unused machinery warehouse-1
Problem -4: how to reduce apprehension among the employee?
Solution: Retention of employment and Lewin's change management model
Assumptions and logic underlying the solutions
 As per paragraph 6, sentence-1, members of the meeting form the warehouse argued strongly
for the retention of employment.
 again, as per paragraph 15 and 16, there will be vacancies for additional sales personnel and
administrative staff. which means that Abcoat still needs resources with word processing and
it knowledge. knowledge of sales office work will be treated as advantages.
 Abcoat Private Limited is a medium sized company with around 300 Employee18. Let’s assume
that as a medium size company they are using ERP in their operations and as a result, most of
18 Refer to Case Study: Paragraph-1, Sentence-1

18. 17
the employees have word processing and IT Knowledge. So, the Additional competencies from
Warehouses-1 can be utilized and redeployed as sales personnel and administrative staffs. This
will reduce the hiring cost and the anxiety among the staffs.
 Again, as per Paragraph 7, the distance between each of the warehouse and between the
warehouse and head office were too great to allow redeployment of any lower paid staffs. So,
a Low paid employee like Staff and Van driver can be Downsizing which will not create any
anxiety as well as no pressure in cash flow because of their low amount of salary.
 3 steps Lewin's Change Management Model19 can be applied to reduce anxiety:
Step-1 Unfreeze:
Developing a compelling message for Abcoat employee, showing why the existing way of
doing business cannot continue. Also, senior management can break down the existing status
quo. This will help the organization to accept that change is necessary and building up a new
way of operating will be easier.
Step-2 Change:
Senior management of Abcoat’s needs to make sure that the employee understands how the
change will benefit them and employees are taking it proactively.
Step-3 Refreeze:
In this stage senior management needs to make sure employees are getting proper help people
and the organization internalize or institutionalize the changes. This means making sure that
the changes are used all the time, and that they are incorporated into everyday business. With
a new sense of stability, Abcoat employees will feel confident and comfortable with the new
ways of working.
Figure 10: Lewin's Change Management Model for Abcoat Pvt. Ltd.
19 Kurt Lewin developed a change model involving three steps: unfreezing, changing and refreezing. ... For Lewin, the
process of change entails creating the perception that a change is needed, then moving toward the new, desired level of
behaviour and finally, solidifying that new behaviour as the norm.
Step-1 :Unfreeze
Why Change rquired ?
Step-2: Change
How the change will
benefit?
Step-3: Refreeze
Institutionlaize the
Change

19. 18
Problem -5: Which one is the best Warehouse for Operations?
Solution: Warehouse-2 is the best Warehouse for Operations
Assumptions and Logic Underlying the Solutions
Table 4: The rationale for Selection of Warehouse-2
Warehouse-1 Warehouse-2 Warehouse-3
 Smallest floor space
 Structures are old and need
Maintenance.
 Expensive capacity due to
additional staffs.
 Location is not Suitable
 Highest Floor Space
 It is in good condition thereby
not requiring any form of
maintenance soon.
 Additional Storage Capacity
as because of declining
demand for Industrial clothing
 Due to the larger capacity, it
will enable the employment of
additional sales personnel
together with administrative
staff.
 A big number of Manpower to
support additional Work.
 The third warehouse is
determined with 1500 square
meters of space and in good
repair.
 However, there is significant
nature in the shortage of the
staff. This is mainly evident in
the availability of only 6 stores
personnel which is the lowest
when compared to the other
warehouses.
 The availability of only 1 van
driver is also depicted to be a
limiting factor to support with
the operations of the
sportswear.
Not Suitable for warehouse Suitable for both Sportswear and
Industrial ware
Not Suitable for sportswear
operations.

20. 19
5.0 Conclusion
The case study under discussion is a very good example of a corporate strategy. Corporate strategy
concerns with the broad and long-term questions of what business the organization is in or wants to be
in and what it wants to do with that business. Corporate strategies are used to steer the organization in
a certain direction.
Figure 11: Direction through Corporate Strategy
To gain competitive advantages, the corporate strategy taken by Abcoat Pvt. Ltd. Is renewal strategy
through retrenchment. This will improve the sales volume of the company and will create positive
changes in the performance. Again, to improve the current corporate decline Abcoat has taken the
decision of downsizing. This strategic move comes up with significant cost savings which will help
Abcoat to shift from corporate decline to organizational stability.
Abcoat also used a two-stage approach to come out with the best possible solutions to improve the
corporate decline. Senior Management put forward their intention of Cost Savings Solutions of the
closure of one warehouse to the Non-Strategic Management to come up with an Idea that will improve
the current scenarios.
Some of the possible situations have been discussed with reasonable assumptions. No National
circumstances have in consideration while developing the plan. The outcome of the Plan is,
Diversification will lead to competitive advantage and downsizing will improve the corporate decline.
Warehouse 2 is the best place for sportswear operations and warehouse1 and 3 is for Storing only.
Corporate Strategies Competitive Advantages Vision and Mission

21. 20
References
Harrison, A. ( Professor of Operations and Logistics, Cranfield School of Management, UK).
Financial Times. Retrieved from ft.com/lexicon: http://lexicon.ft.com/Term?Term=logistics-
strategy
Stephen P. Robbins, M. K. (2005). Managment. Pearson Prentice Hall.

22. 21
Appendix – A: CASE STUDY
ABCOAT PRIVATE LIMITED
Abcoat Private Limited is a medium sized company with around 300 employees. The main business
of the company is the supply of industrial clothing. The head office is situated in a major city with
three regional warehouses situated at strategic points in the country close to large industrial areas.
Due to changes in the market a decision has been taken to diversity into protective sportswear such as
wetsuits.
Most industrial clothing sales came from direct orders whereas the sportswear would be sold to retail
outlets. This represents a significant change in the type of market and would require changes in
working patterns requiring an addition to the sales force.
The warehouse supervisors were called to a meeting to discuss where the sportswear should be stocked.
The office managers associated with each warehouse were also at the meeting.
The sales of industrial clothing had declined and the retention of three regional warehouses was no
longer viable. The meeting would need to consider if one of the warehouses should be closed.
Alternatively, should the industrial clothing be stocked at two of the warehouses and the third
warehouse used for the sportswear?
The members of the meeting from the warehouses argued strongly for the alternative based on the
preservation of employment. However, the senior management at the meeting was anxious to find a
cost-saving solution and therefore favored the closure of one warehouse.
The distances between each of the warehouses and between the warehouses and head office were too
great to allow redeployment of any lower paid staff as it would not have been an attractive proposition
for those staff to move house.
Ms. Laura Kim is the Office Manager at the largest of the warehouses and considered the senior of the
three regional office managers.
The meeting did not at any final decision and the senior manager chairing the meeting that Laura Kim
should form a Working Group to consider the possible closure and to table a plan at a meeting to be
arranged in the future suggested it. This was agreed unanimously. Laura chose an Office Manager
from one warehouse and a warehouse Supervisor from the third warehouse.

23. 22
Prior to the first meeting of the Working, Group Laura gathered information on the three warehouses.
The company owns all the buildings and sites. Warehouse 1 is the smallest with a covered area of
1,000 square meters; the structures are old and in need of maintenance.
Both Warehouse 2 (2,100 square meters) and Warehouse 3 (1.500 square meters) have buildings,
which are in good repair.
Staffing for the warehouses:
Warehouse Supervisor Stores Personnel Van Drivers Office Manager Staff
1 1 8 2 1 2
2 1 14 2 1 3
3 1 6 1 1 3
The proposal to close one of the warehouses was known throughout the company and there was
considerable apprehension amongst the staff.
Against this background, the company will need to employ additional sales personnel together with
administrative staff to support them. One of these proposed vacancies would be for an administrative
assistant.
The post would require experience of word processing and other information technology. Experience
or knowledge of sales office work is an advantage.
Note:
In dealing with this Case Study you are required to:
a) Make clear any reasonable assumptions you feel are necessary.
b) Make clear any national circumstances if you are not based on your answer in the context of
your country.
QUESTION
Discuss your logistics strategic views in selecting the best warehouse for operation.

24. 23
Appendix – B: PRESENTATION SLIDES