Description
Colossus is a major supermarket chain in the UK with 50 stores across the London metropolitan area. It is looking to increase its customer-base especially with the presence of a lot of competition (other supermarkets, small shops, mini-marts and mum and dad shops).
After careful review of the demand, the competition, the demographics and the supplier’s performance, the board decided to import products exclusively for them.
A team of procurement specialists was sent to the USA to source products in the following categories: 1 Specialty snacks (chips, popcorn, chocolates etc...)
2 Healthy snacks
3 Green Cleaning products
It is to be noted that the food products chosen have a long shelf life (more than 18 months).
Suppliers were chosen all around the USA and the final contract with each supplier is not signed pending a full study by the supply chain and logistics department.
You are part of the Logistics department so please present the Overall evaluation and description of the business case and response from a supply chain system perspective to find the most economical and safest way to ship the products to the central depot in Southampton.
Present your assumptions and constraints as well as the cost associated with the options you might consider.
Use all the knowledge you have acquired in the last 6 weeks to research and conclude:
(the target is the most economical and safest way), including:
 Choice of the port of origin and shipping line. Please justify your decision
 Would you consolidate or not? Please justify your decision
 Would you air freight some products or not? Please justify your decision
 What are the customs regulations?
Note the following:
 Colossus’ aim is to increase its customer-base but also to make a higher margin on the new
imported products (usually up to 40%)
 The cost of logistics is the major variable in the COGS (cost of goods sold) and minimizing it
whilst ensuring product availability is critical
 Assume the following:
 Most products (90 products) are procured from 30 suppliers in the USA. Therefore no ONE supplier will have enough volume to fill a full 40-foot container.
 10 of the products are procured from one supplier and it is more than enough to fill 5 * 40-foot containers at every order
 Assume that all suppliers have the same lead time to delivery
 Assume that Colossus will place orders 3 times per year (every 4 months)
 Assume that all other products (90 products) will fill 10 40-foot containers from the
consolidator