Review Chapter 5 of the course textbook, Contemporary Project Management: Plan-Drive and Agile Approaches. Review the video How to Negotiate Better – Project Management TrainingLinks to a

BUS 633 PROJECT MANAGEMENT CASE STUDY

Logistics Service Improvement Project

The logistics service improvement project case study is the base for the assignments for Weeks

1, 2, and 3. Wherever “country” is mentioned, substitute the name of the country you selected

for the Walmart case study.

Overview International Logistics Services (ILS), a firm with $5 billion in annual revenues, provides

inventory storage—that is, a place to store goods near the point of sale—and last-mile delivery

services to customers worldwide. ILS’s values are based on the triple bottom line of profits,

people, and planet (Slaper & Hall, 2011). The firm’s mission is to provide reliable, accurate, and

consistent inventory management and local delivery services in a socially responsible manner.

In addition to inventory storage, ILS also provides cross-dock services at strategic locations

around the world. They also own fleets of trucks in each country to deliver goods directly to

retail outlets or consumers. Thus, ILS offers their customers a unique value proposition as a

specialized third-party logistics provider. ILS’s focus on providing logistics services to their own

customers enables the latter to effectively and efficiently serve their consumers in a just-in-time

manner with minimal stock-outs. ILS’s customers include Walmart, car dealerships, and other

retailers that serve consumers directly.

Employee Retention ILS pays wages and has benefits in the top quartile of each country they serve. ILS has a

reputation for treating their associates well, so that they will, in turn, extend the same courteous

attitude to their customers and thereby achieve a triple bottom line. ILS competes effectively

because it attains higher productivity and lower employee turnover leading to low costs.

Expansion Strategy As part of its global expansion strategy, ILS has acquired a warehouse and a truck fleet in the

country. This is the first logistics operation that ILS has acquired in this country. A specific

strategic objective is to obtain Walmart as a customer. Walmart currently uses ILS in other

countries.

ILS recently acquired a warehouse in the country, which employs 50 warehouse employees and

50 drivers. ILS paid $400,000 for the business. Additionally, they have allocated $100,000 upon

recognizing that the facility has a number of issues.

ILS will form a project team that will work with existing employees to resolve the issues during

Year Zero. Given that the problems can be solved, ILS expects to see a net cash flow (revenue

– costs + depreciation add back) of $150,000 per year starting in Year One. Moreover, they are

assuming a five-year investment life with a salvage value of $400,000 for continued earnings

from Year Six and beyond. ILS plans to secure business from Walmart and other customers in

the area surrounding the warehouse once the current issues are resolved. Getting business

from Walmart is a strategic objective.

Inherited Issues The logistics service currently in the country has experienced low customer satisfaction, safety

issues, and wasted resources resulting in financial losses. Employee turnover was 25% in the

warehouse last year before ILS acquired the business. The facility is not meeting the values for

a company striving to maximize the triple bottom line that involves financial, social, and

environmental concerns (Slaper & Hall, 2011).

There are several specific issues which include:

• In 2018, there were 13 lost time accidents in the warehouse and two serious accidents

while transporting inventory to a customer’s facility.

• Electric bills are high, and energy is wasted. Lights are often left on after hours.

• The warehouse is disorganized. Often, inventory cannot be located in the warehouse,

leading to late deliveries even though the warehouse is not congested.

• Equipment is outdated and maintenance costs are excessive, in addition to high fuel

consumption.

• Associates have received only informal on-the-job training in their positions and on

safety procedures.

• Processes are not documented.

Your Role Upon closing the purchase, ILS appointed a new director for logistics services (DLS) who will

sponsor the project team to improve operations at the newly acquired business. You have been

selected as the project manager. Although the project has been approved, the DLS needs to

obtain final approval for the project charter from the executive vice president for global

operations and the chief financial officer.

The DLS has asked you to develop a project charter for his approval by this coming Monday

and the essentials of a project management plan are due within three weeks (Project

Management Institute, 2017). The DLS indicated John (operations expert) and Alice (business

analysis expert) from the U.S. can serve on the project team. Harriet, Harry, and Harvey are

also available as advisors in the United States as they are experts in global technology,

robotics, and solar power. Lena will also be an advisor to the team as an expert in lean methods

(Mirdad & Eseonu, 2014).

The DLS has asked you to work with the local human resources manager to form a project

team. The project should be completed and fully implemented by the end of Year Zero. The local

business development manager has excellent relations with Walmart’s logistics procurement

team in the country and should be kept updated on the team’s progress. Upon completion of the

current project, the DLS will form another project team to develop a bid for Walmart’s business.

References Mirdad, W. K., & Eseonu, C. I. (2014). A conceptual and strategy map for lean process

transformation. Proceedings of the 2014 Industrial and Systems Engineering Research

Conference, 263 –273.

Project Management Institute (PMI). (2017). A guide to project management body of knowledge

(PMBOK Guide) (6th ed.). Newtown Square, PA: PMI.

Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it and how does it work? Indiana

Business Review.