Industrial and Manufacturing Engineering Department
BS in Industrial Engineering
In this report a framework for a hypothetical business will be covered. Bucher & Magnuson Wine Import Inc. has provided a business plan as well as a detailed supply chain design for operations. In addition, a model for scaling and a redesign of a possible storage facility will be found. This comprehensive document outlines end to end the supply chain model of the hypothetical business and moreover a framework for starting a wine import business in San Luis Obispo.
The conclusions of the results from this model are the following:
Unconcerned with time, the cheapest route for 1 TEU, standard twenty foot shipping container, of 56 pallets of wine is to go from the port of Livorno, Italy through Long Beach and trucked up to Paso Robles, California.
The optimal allocation of wine in our TEU based on a customer demand survey of the target market, San Luis Obispo, are 321 cases of Tegolaia Toscana , 236 cases of Calice Del Conte Toscana, 111 cases of Chianti Rufina, and 228 cases of Gavignano.
Based on the business plan including the sales and operations report, this is a profitable venture resulting in a net profit of roughly $71,000 before taxes.
By classifying inventory based on pick frequency and implementing a reorganization of pallets, the storage facility has a new layout for optimal picking processes.
After simulating the business being scaled to meet future higher demand volumes, New York becomes the optimal port for adding to system throughput.
Recommendations and environmental impacts for this industry are discussed within the conclusion. Utilizing LCL shipping methods as well as ERP concepts to optimize the 3 tier system that is the wine business today are essential to its efficiency.