Logistic Plan for Exportation of Ceramics to Furniturest in Europe

Inventory Control in CERAMICOSA

CERAMICOSA SA is a Spanish company of which you are the logistics director. It is dedicated to the manufacture of plates, tiles and various ceramic structures for housing (walls, floors, countertops, etc.). It has its production and distribution warehouse in La Vall d'Uixó (Castellón).

CERAMICOSA has experienced an exponential rise in sales due to new decorative trends based on the use of ceramics, whose attributes are linked to elegance, cleanliness and durability. In addition, the company is known for making high quality ceramics, one of the best in the market, with totally original designs and engravings. All this has caused the demand for their product to increase considerably in the last few years. 

The strategic director of the company has decided that it is time to export these new decorative trends to various Western European countries, as she thinks that the taste and fashion in aesthetic concepts are quite similar, thus ensuring a very good reception. To this end, an agreement has been signed as exclusive suppliers of Furniturest, a chain of luxury department stores dedicated exclusively to the sale of accessories, furniture and home installations. 

The main characteristic of Furniturest, which has salespoints throughout Europe, is that it supplies the material to its customers in less than 24 hours after payment. This forces CERAMICOSA to be very clear about the logistic processes to avoid stock ruptures at times of peak demand, which would imply very important monetary fines as a penalty, as stated in their agreement. 

At this current time, the production is being distributed to three locations:

1.Furniturest Stockhlom
2.Furniturest Palermo
3.Furniturest Viena

We find that CERAMICOSA is entering a completely new export stage and it is very conditioned by a restrictive exclusivity contract. For this reason, as logistics director, you must develop a logistic plan oriented to the internationalization of your product taking into account all the mentioned particularities.

1.In the first place, focus on the Inventory stage of the logistics process. 

a) Explain why an exhaustive inventory control is especially important in your company. 

b) Propose actions to prevent disruption of the production process resulting from poor inventory management.

2.We know that for the correct exploitation of CERAMICOSA’s logistics network it is necessary to emphasize on the distribution stage. 

a)What variables must be taken into account for a proper product coordination? Briefly propose an action to ensure these variables.   

b)Propose also different actions that ensure a good management towards the client and that, at the same time, make you more competitive as a firm. 

3.Since delivery timings are so tight due to the commitment of Furniturest with its customers, CERAMICOSA has decided to rent intermediate and/or final warehouses to quickly supply the demand of its client. 

a)As a logistics director, do you consider this proposal correct?

b)Locate geographically the ideal spot for the warehouses taking into account the location of each physical store (Stockholm, Palermo and Vienna) whilst also considering that CERAMICOSA must be able to send the goods to any point in those countries (Sweden, Italy and Austria), since Furniturest’s customers can make purchases online. 

c)Propose a route from the central warehouse to the final customer, bearing in mind that these new intermediate warehouses exists. Apply it to the three scenarios/cities. 

4.Do you consider it appropriate to apply the Just in Time philosophy in our new warehouses? Justify your answer.  

5.Regarding the choice of Incoterms:

a) Which do you consider more appropriate if we want our client to be freed, as much as possible, from all management and responsibility?

b) Imagine that you have implemented a service for Furniturest to collect the merchandise from our central warehouse, offering a 10% discount on the retail price. What type of Incoterm will interest you most in this case?  

6.Decides which route planning system is best suited for CERAMICOSA’s activity.