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Innovativeness in Design and Development of Warehousing*

ET Cases - FLAME, 9 Pages
AUTHOR(S) : Dr. Pranjal Kumar Phukan, D.Litt. (Hons), F.I.P.E, M.I.E, F.I.S.M.E, M.IOD

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Innovativeness in Design and Development of Warehousing


The primary function of any warehouse is to store products in order to make an assortment for customers, to assemble customer orders, sometimes to add value to the orders by customization activities, organize transport to the customers, and ship orders timely, in the way desired by the customer. Simultaneously, distribution centres also get affected by warehouse locations as this makes the transportation routes more efficient and pragmatic. The proximity of the warehouse to its distribution points always has the greatest impact on sustainability.

M/s Cracker and Polymer Limited is a polymer plant situated in North East India, that produced HDPE and Polypropylene. The plant required naphtha and natural gas as dual feed for its manufacturing process in addition to numerous chemicals, additives, catalysts and other electrical and operational machinery and spares on regular basis for it to be operational.

However, few major issues/problems faced by M/s Cracker and Polymer Limited were the limited supply sources for chemicals and critical spares leading to high sourcing lead times and logistics/ transportation hurdles considering the demographic disadvantages. Also, most of the chemicals were having a limited life span which required detailed sourcing, logistics and storage to avoid redundancies and disposal. Multiple storage facilities which were constructed during project phases led to high lead time in transportation, manpower resources visiting on regular basis for inspection activities at storage locations thereby wastage of their precious time in travelling which is purely unproductive in nature.......................


Exhibit I: Warehouse Labor Costs

Exhibit II: Utilities Costs

Exhibit III: Miscellaneous Costs

Exhibit IV: Annual Procurement Savings

Exhibit V: Annual Cost vs Savings

Exhibit VI: Present Value

Exhibit VII: Photographs of the Newly Constructed Central Warehouse

Teaching Note Preview

Innovativeness in Design and Development of Warehousing



The case is designed for MBA students specializing into Materials, Operations and Supply Chain management, which is deliberated in such a manner to make students understand the basics of warehousing and logistics affecting the supply chain network and in turn affects the entire supply chain business of any organization. In the present scenario of GST tax structure getting implemented w.e.f 01.07.2017, entire supply chain domain is getting affected leading to more arranged and cohesive nature of its integrated domains. MBA students from 4th semester onwards can appreciate the subject well and whosoever wants to further discuss on the topic shall be fluent with minimum basics of materials management domain. This topic is chosen from the practical reflection made during planning and execution stages of procurement process at the Plant and accordingly whatsoever major deterrents observed was taken into account for inclusion in this case study.

Prerequisite Conceptual Understanding Before the Classroom Discussion

There is no dearth of resources to understand the basics of logistics and warehousing management. Students can refer on-line search engines, libraries and text books available for referring their queries related to this case study. Logistics and warehousing plays an important role in any petrochemical industries globally.

Case Positioning and Setting

This case study can be used in the MBA/MDP/post graduate level for the course of Logistics and Supply Chain Management.

Learning Objectives

The case study will help in understanding the logistics domain of supply chain management which is an integral part of the system. Through this case study, students will be in a position to understand the impact of logistics and warehousing both on the supply chain and related business decisions for any organization.

Assignment Questions

I. Discuss the various warehousing issues faced by M/s Cracker and Polymer Limited. What do you suggest as the solution for these issues?


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Product code: SCM-1-0008, SCM-1-0008A


**ET Cases – FLAME Industry Experience Case Award - 2017

Innovation could be recognized as a key success factor in an increasingly competitiveness in this complex environment. The act of innovating can provide a firm with the capability to capture a substantial level of market share or create an entirely new market opportunity that enables a firm to reap supernormal profits. Warehouses are in an exciting era where design and innovation is shaping the industry for the better. Technology, productivity and sustainability are a few of the main driving factors. Warehousing is becoming more and more a critical activity in companies. This case study aims to illustrate the role of innovation strategies in improving warehouse operation efficiency, enhancing the utilization of warehouse capacity and increasing inventory accuracy. This case study will help managers and practitioners to understand the role of innovation management tools in structuring warehouse management and how to gain a competitive advantage through successfully planned and implemented innovation strategies. Organizations need to differentiate themselves from other players in the market. In most cases, leading companies continuously use innovative strategies to create an edge over their competitors. One way is to update their warehouse management through innovation strategies. These strategies will help them to have less inventory, react faster to market changes and lead times and costs.

Pedagogical Objectives

Process industries constitute primarily of refineries and petrochemical processing units which consume various types of chemicals, additives, catalysts and lubes in large quantities and are hazardous too. Shelf life determines the applicability of these chemicals and determines the usage duration and storage parameters. Earlier process industries managed multiple warehouses for chemicals, other raw materials and operating inventories to minimize the logistics time. Later, it was found unscientific as it indirectly hits the profitability of the organization due to costs involved in manpower resources, maintenance and multiple sourcing activities. Through this case study, the entire activities involved in warehousing and logistics was explained in detail with cost benefits in construction and managing central warehouse for multiple usages at one place. The case study will make students and practitioners understand the practical issues related to supply chain network management which involves sourcing, logistics, warehousing and distribution in particular for any type of industries. Also the case insists on innovative steps undertaken to manage the store management for optimum utilization of resources in achieving the business objectives of any organization.

Case Positioning and Setting

This case study can be used in the MBA/MDP/post graduate level for the course of Logistics and Supply Chain Management.


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- Teaching Note (**ONLY for Academicians)
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