Canada & Supply Chain Logistics SUP 1033
Case Study For: Final Project - Phase 1 Geography & Distribution
TAYLOR GUITARS
Taylor Guitars is a medium sized British electric guitar manufacturing company founded by Mick Taylor, former lead guitarist with The Rolling Stones rock band. Mick played with the group from 1969 to 1974 and made a name for himself as one of the finest guitarists in the world. Taylor founded the company in 1976 and has spent the last 40 plus years serving the European market but wishes to expand into Canada due to the popularity of his guitars in this country. He wants to open a few facilities in Canada including a factory, a number of warehouses and some retail stores near customers. He is unfamiliar with Canada and needs your help to build a network design and distribution plan for him so he can serve customers at a 95% fill rate while minimizing costs.
Customer Base
Mick has demand for his products all over Canada and this demand reflects the current population of Canada in terms of distribution by city. In other words, Micks guitars sell according to where the most people live in Canada. The average selling price of a guitar to the customer is $ 2,000. Mick expects to sell 10,000 guitars his first year of operations with a growth rate of 10% each year after that.
Facility Considerations
Mick wants his guitars to be within a 2-day drive of 80% of Canadas population and a 5-day drive of the 20% of the remaining Canadians in remote locations. This can be accomplished through retail stores (he wants to open 5 of them maximum) or through warehouses where customers can order online and have the guitar ready for pick up or home delivery. He also wants to have a factory that is near highways, airports and other transportation routes. His raw material for the guitars comes in from China so he has to consider the transportation costs of this this as well within Canada . Mick has enough capital for 3 warehouses and 1 factory. Make any other assumptions as you see appropriate to help you build your project.
In your groups create a short report (min 3 pages, no maximum) for Taylor Guitar that outlines what you have learned from this course/internet in terms of geography and distribution about Canada. How will this information help shape where you plan to have facilities (factory, warehouses, stores) for Taylor Guitar in Canada?