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Compare and contrast the two modes of transportation

Business Case Assignment Topic – Eco BottleThe Company: Eco BottleYou have just been hired as the Director of Logistics for Eco Bottle (EB). In your newrole, you will have responsibility for general logistical planning including functions suchas inbound and outbound freight and any logistics-related functions within EB.EB is a ten year old Canadian manufacturer of premium refillable water bottles. EB islocated in Winnipeg Manitoba where their manufacturing facility, warehouse, andadministrative offices are contained within a single building. EB employs seventy staffmembers, 35 of them dedicated to manufacturing, 15 to warehouse operations, and theremaining 25 in various administrative positions.EB has positioned their product in the ‘premium’ category and is enjoying year over yeargrowth. Their primary product is a 750 ml refillable water bottle that is manufacturedusing two primary raw materials: stainless steel for the body of the bottle and highdensity plastic for the removable lid. EB has spent considerable effort on research anddevelopment and the bottle is considered to be industry leading in its ability to maintainboth hot and cold temperatures.75% of EB’s sales are done through an online distributor called Skyway who maintainsdistribution centres in Calgary AB, Mississauga ON, and Montreal QC. Skywayspecializes in selling athletic and outdoor goods direct to Canadian consumers and usessmall package providers and couriers to provide a one or two-day delivery to mostCanadian households. EB currently ships product over the road to Skyway’s distributioncentres and if ordered in TL quantity, EB pays for the freight expense. When LTLquantities are ordered, EB charges the freight expense to Skyway. The remaining 25% ofsales are done through a small group of boutique specialty stores across Canada thathave requested the product specifically to stock. These sales are normally low volumeand shipped via a small package or courier service to the boutique specialty store.
Business Case Assignment Part one
EB purchases its high density plastic from a distributor in Shenzhen China. Thisspecialty plastic is transported by a conference ocean carrier as LCL through the port ofVancouver BC where it is then destuffed and transported by intermodal rail to EB inWinnipeg MB. The plastic is purchased in a small pellet form and packed in doublewalled corrugate gaylord cartons measuring 48 inches x 40 inches wide and 36 inchestall. Each carton is lined with a plastic bag and then capped with a corrugate lid. Whenfilled, each gaylord carton weighs 1,500 lbs. For both the ocean and rail portions oftransportation, nothing occupies the space above the gaylord boxes in the containers asthey are not capable of being stacked.
A potential new supplier of plastic has been found in Halifax Nova Scotia. Thismanufacturer produces a comparable product to the Shenzhen supplier. The newsupplier in Halifax would transport the plastic pellets in a bulk hopper car via rail to atransloading facility in Winnipeg Manitoba. A packaging facility operates adjacent to therail terminal in Winnipeg where the plastic would then be packaged in the samegaylord cartons currently being used for delivery over the road to EB only a fewkilometers away. You have not been given costing information yet but have been askedto prepare a preliminary report that would highlight the logistical differences betweenthe two options. Compare and contrast the two modes of transportation and whatimpacts this would have on EB.

Specifically, you have been asked to:1. Compare and contrast the two modes of transportation and what impacts thiswould have on EB.2. Discuss the organizational changes that may impact EB in a change of suppliers.

Solution:

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