Abstract
For the past few years, the profits of ALKO have shrunk because of a more active concurrence. Then, the board of directors of this company, which produces lighting fixtures, decided to hire Gary Fisher to try to find a solution to reduce the delivery costs. After having studied how the company used to work, Gary Fisher concluded that the main problem was to be found in the operating performance. Until then, the company only aimed at a good quality and competitive production and never cared much for enforcing the efficiency of the supply chain. As a consequence, Gary Fisher decided to set up a task force to try to improve it. After having studied the problem, the task force drew the following conclusion. For the moment, lighting fixtures for the whole United States are produced in 3 factories, all of them situated around Cleveland. From Cleveland, the finished products are sent to 5 regional Delivery Centers (DC). Ultimately, the goods are delivered to customers from the DC within one single day. The problem of this system is that it generates important transportation and warehousing costs.
