Allied Office Products Case Solution

This case is about Business

Success Study for business Forms Division of Allied Office Products February 9, 2007 Proposal Team: Brant Allegretti, Kirk Blackwelder, Rick Calero, Mary Coffee, Jonathan Doddridge, Mike Taylor, Carlos Villarreal Overview Background Goals and Objectives Options Situation Analysis Activities Based Cost( ABC) Analysis Potential Threats/ Risk Mitigation Recommendations Summary Allied Business Forms Division 2 February 9, 2007 Background Annual sales of$ 900 million Forms Manufacturing Business forms Specialty paper Business Forms Inventory Management Services- Total Forms Control( TFC) Warehousing Inventory funding Forms use reporting Inventory control Distribution ( Pick pack & desktop shipment) February 9, 2007 Allied Business Forms Division 3 Background TFC Inventory Storage 10 warehouse Pricing Clients charged flat regular monthly charge on item expense plus 32.2 %, no matter level of service Covers warehousing, circulation, expense of capital for stock & freight cost( based upon 1990 aggregated monetary information) Profit Margin Sales force charges average of 20% of item & services; private accounts can differ from basic formula February 9, 2007 Allied Business Forms Division 4 Background Value Chain Concept- TFC Industry Chain Trees Pulp Paper Forms Mfg. Forms Sales TFC Customer Purchasing Business manager Customer Receiving Forms User The TFC Chain Storage & Inventory Financing Requisitioning Stock Selection & Pick Pack Order Entry & Billing Desk Top Delivery Freight February 9, 2007 Allied Business Forms Division 5 Goals & Philosophy Review Current State Identify Areas for Makeover Increase ROI on TFC from 6% to 20% February 9, 2007 Allied Business Forms Division 6 Storage & Inventory Financing” Don’t you believe we should do something to obtain that old stock moving?”– Tim, Kansas City, MO Distribution Facility Inventory Obsolescence Excess Inventory Cost of Capital Customer does not spend for stock up until appropriation submission February 9, 2007 Allied Business Forms Division 7 Requisitioning” I’ve specified where I understand the consumers so well, that the order details is simple. The only thing that actually matters is the number of lines I need to go into.” Hazel Nutley, Data Entry Owner 310,000 appropriations each year Each appropriation– typical 2.5 product lines Reduce information entry -integrate purchase history in appropriation procedure; figure out regular reorders Institute minimum appropriation requirements; under$ X, additional cost charged Allied Business Forms Division 8 February 9, 2007 Stock Selection/ Pick Pack” Almost is whatever choice pack nowadays. Nobody appears to purchase a container of 500 products any longer.”– Rick Fosmire,

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