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Goodkid Toy Importers

Essay by   •  December 4, 2018  •  Case Study  •  3,704 Words (15 Pages)  •  18 Views

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Table of Contents

Executive Summary:        2

Issue Identification:        3

Operating Environment        5

Root Cause Analysis:        8

Options / Alternatives:        11

Recommendations:        15

Implementation Plan:        16

Monitor and Control:        17

References:        18


Executive Summary:

Goodkid Toy Importers is a small Company that imports majority of its toys from Asia and through distribution channels, supply these toys to Canada and US retailers. Goodkid is fairly a new Company (just seven yea’s old) but have great exposure of dealing with Asian and North American suppliers. Goodkid toys were made in Canada, however, most of them came from Asia, moving through the Pot of Vancouver, BC. Toys purchased in Asia were all delivered to a consolidator in Hong Kong, who then load them into a containers and ship to required locations.

The problem occurred when Toy stores in the United States that imported toys from Asia have their shipment stuck one time and had their entire cargo moved through the West Coast U.S. ports. It happened due to labour unrest issue at that port. There was a considerable overcrowding there and a few toy importers started to import through US Atlantic Ports. This impacted the shipping strategy of Goodkid and now the toys would have to be consolidated in Singapore, rather than Hong Kong. The time between the Asia toy manufacturer’s port of origin and the US port was 4-5 weeks for goods moving from Hong Kong to West Coast US Ports and this could be an issue for Goodkid customers and may impact on revenue as well.

In order to tackle this problem Goodkid need to receive goods through the east side and the most likely port to use is Halifax. Goodkid’s management wanted to explore the possibilities of having Asia toys move via Singapore to Halifax. My analysis and recommendation shows that Goodkid should continue its import through Vancouver BC port until it find out the total cost of ownership of changing the port to Halifax. My stand-alone cost analysis shows that moving to Halifax is not cost effective at this stage, however in the absence of other cost components the decision cannot be made immediately to move to Halifax. It would feasible if Goodkid use TCO approach to calculate its total cost and then make a rational decision based on facts and figures.

My Implementation plan shows the action items that are required in the short run and strategic steps that are in the long run to prevent this type of situation happening in future. The Monitor and Control process highlights steps and action items with a timeline to measure the success of my action plan. These recommendations have been laid down in compliance to Goodkid’s strategy of managing its imports effectively with exploring possibilities of importing through Port of Halifax.  There is no significant cash flow involve in this transition with the assumption that Goodkid has limited cash resources. The contingency plan is also included in this report should my strategic plan not produce results as expected.

Issue Identification:

Goodkid Toy Company’s Toy stores in United States that import toys from Asia are facing problems with their shipment due to labour unrest. Due to port congestion, shipment were starting to re-routed to come through Singapore, rather than Hong Kong. This would mean that the shipments would be rec’d longer than its usual time as well as Goodkid has to pay extra shipping cost due to re-routing from Singapore to Hong Kong. Goodkid’s Management decided that they must explore the possibilities of having Asia toys move through Singapore to Halifax instead of Hong Kong to Vancouver. BC.

Following are the main issues that Goodkid’s may encounter by considering this possibility:

Short –Term – (Tactical and Immediate issues)

  1. Inventory Movement

Labour unrest is causing port congestion at Toy Stores in United States. The impact of this problem would cause delay in inventory movement at US Toy stores and other required locations.

  1. High Transportation Cost

Changing consolidation port from Hong Kong to Singapore would impact cash flow and may cause delay in receiving toys.

  1. Inventory Management Problems

With the change of ports from Hong Kong to Singapore would also cause Inventory Management issues at Atlantic Ports. Goodkid does not have any warehouse at new Port of Singapore to manage this inventory.

  1. Demand and Supply Gap

The problem of port congestion would also impact demand and supply and customers’ orders to be processed on time.

  1. Increased Transit Time

Even though products are needed in holiday time but due to change in ports may significantly increase lead time from 4 to 5 weeks to 8 to 12 weeks.

  1. Additional Transportation Cost

Although Halifax was little distance to the east of most markets, Goodkid may have to pay some additional cost associated to transportation and shipment.

Long Term Issues - Strategic Issues

  1. No Supply Chain Management Strategy

Goodkid does not have any Supply Management Strategy that can help in this type of situation. The impact of missing Supply Management strategy expose many risks including losing the valuable customers.

  1. Global Sourcing and Supplier Management Strategy

No Global sourcing and supplier Management Strategy exists to handle challenging situations like Goodkid is encountering due to port congestion. This exposes risks inventory Management and managing customer orders.

  1. Logistic & Transportation Management

Goodkid is not having a strategic logistic policy in place that could support transportation and other logistic issues during labour strikes or port congestion issues.

  1. Supply Risk Management Strategy

Goodkid does not having a Risk Management Strategy in place. Missing risk management strategy can have greater impact on goods movement and forecasting sales.

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