BUS 652-01 Problem Solving

BUS 652-01 Problem Solving

TM Logistics is a family-owned and private 3^rd party logistics company that provides two forms of logistics support: tactical supply management (TSM) and warehousing.  The TSM division consists of employees working from an office environment providing manufacturing customers with supply chain support.  This includes the timely delivery of parts and materials to the proper destination, whether it be a logistics warehouse or to the manufacturing line.  These employees utilize SAP software to track parts requirements, the current location of parts in transit, and expected delivery dates.

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The warehousing division of TM Logistics manages warehousing operations for manufacturing customers.  This includes the receipt of inbound goods, the storage of parts and materials, repackaging or building kits of certain parts when required, and then shipping material to the manufacturing line when requested.  These services are usually done in a customer-owned facility, although certain operations are run in TM-owned buildings.  These operations function on real-time SAP inventory management systems.

This Crisis Management Plan focuses on TM’s Dubuque operations.  TM Logistics has two main warehousing operations and two main TSM operations in the Dubuque area.  The location of each operation is shown on the map below.

Seven Potential Crises for TM Logistics

The following seven potential crises highlight some of the key contacts and key steps that TM Logistics would take during an emergency.  These can be used as outlines for actual crises as they occur.

1) Economic: The loss of an essential client

It is possible that TM Logistics could lose an essential client.  In this industry, it is not uncommon to set up an entire warehouse or TSM operation, staffed with 25-150 employees, to service one customer.  If something were to go wrong in that relationship, or the customer went out of business, that operation would no longer be needed.

*Key Internal Contacts: Mike Hodge, Co-owner & CEO / Mike Kane, Customer Relations Manager / Ted Boffeli, CFO

*External Contacts: Honkamp Krueger & Co. (Financial) / Dubuque Bank & Trust (Financial)

Critical Steps:

• First, TM should hold an employee meeting to announce the loss of the client (led by Mike Hodge, CEO). Since TM is a private company, there are no public shareholders to pacify during an economic crisis.  So, the employees working at the operation who may lose their jobs are the most widely affected group in this case.
• Next, hold a management meeting to determine if employees can be relocated to another operation. If not, they may need to be laid off or let go.  The employees will want to know this as soon as possible.  Rapid and frequent communication with them is very important.
• Provide a phone number, email address, and/or website for employees to use to get in touch with Human Resources. Questions about their future with the company can be answered this way.
• Get in touch with local media as they will most likely be publishing a story on this news. Make sure that they have all the facts as to why the customer relationship ended and what will happen to the employees of the operation.  This would be a task for Mike Kane (Customer Relations Manager), as he will most likely have the most knowledge on this topic.
• Notify other key customers/clients what has happened. It would be better for other customers to hear about something like this directly from Mike Hodge, rather than from a rumor or on the news (especially if TM was the cause of the relationship termination).
• Ted Boffeli (CFO) should pull his accounting and finance staff together. With the loss of an operation like this, there will need to be some cost restructuring and analysis to see what kind of affect this will have on the financial statements and future of the company.  Honkamp Krueger & Co. should be included in making this report.  This report can then be presented to management if further action needs to be taken.
• Notify Dubuque Bank & Trust about the loss of the customer. The bank has a vested interest in the continued and profitable operations at TM, as they hold TM’s loans and lines of credit.  This would be a task for Ted Boffeli, after his analysis from the previous step is complete.
• Pull together managers and supervisors from other operations and let them know what happened. This keeps them up to date on what’s happening at TM and gives them information in case their employees ask about the situation.

*See Appendix A for additional contact information

2) Informational: Warehouse inventory database tampered with or corrupted

Since TM Logistics utilizes real-time inventory management software, it is crucial that the inventory database is accurate, up to date, and secure.  If something were to happen to the database, whether it is a technical failure or corruption by an individual working in the system, it could cause major issues in the warehouse.

Key Internal Contacts: Mike Hodge, Co-owner & CEO / Pat Berryman, Dubuque Warehouse Operations Manager / Zach Hodge, Director of IT

External Contacts: TC Networks / John Deere C & F Division (Marty White) / Reynolds & Kenline (Legal)

Critical Steps:

• The customer for which this warehouse operation is run (John Deere C & F) should be the first to know about the database corruption. Pat Berryman (Operations Manager) will have the most knowledge as to what extent this system outage will have on TM’s ability to run the operation.  Pat should tell the customer that he will provide frequent updates as to the status of the system.

The next key step will be to retrieve backup data and restore the corrupted database as soon as possible.  TM utilizes onsite and offsite backups for this type of emergency.  Ideally, the onsite backup will have the data needed and it c…………….

BUS 652-01 Problem Solving

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