Sneaky Sneakers

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Date approved for distribution: 30 September 2007

Author:

Spyros Reveliotis, Ph.D.
Associate Professor
School of Industrial & Systems Engineering
Georgia Institute of Technology
765 Ferst Drive
Atlanta, GA 30332

Keywords:

Warehousing Systems
Product Flow Analysis
Facility Layout
Equipment Selection
Material Handling
Capacity Analysis

Abstract: This case asks student teams to develop plans to improve distribution operations at Sneaky Sneakers, a retailer of athletic shoes. Sneaky operates 500 stores that are located primarily in shopping malls. They recently opened their website and are now selling shoes directly to consumers. They had outgrown their current facilities and needed to design a new distribution center that would be able to handle their retail and internet business in the same facility.

LEARNING OBJECTIVES
Given the concepts that are presented in this case study and their depth, it is best for this case to be used in a junior or senior level facility design, warehousing, material handling, or production & operations management class. The learning objectives are:

To analyze a real distribution center design problem similar to ones found in practice.
To make reasonable assumptions related to given data sets, and make reasonable engineering decisions.
To learn how to profile a distribution center and to estimate material flow, inventory, storage and operational space, and labor requirements.
To analyze and compare material handling and storage equipment.
To perform layout analysis and design.
To conduct a supporting economic analysis.

COMPLETION TIME
If the case is worked in teams of 3-5 students, it is realistic to expect about 4 weeks for students to develop and justify a reasonable solution, write a formal report, and make a presentation of relevant findings.

SKILLS REQUIRED
The case is designed to test concepts that are associated with the design and operation of a distribution environment. It requires students to develop the best product flow for the Sneaky Sneakers new facility, and support it with (i) an appropriate layout and (ii) a pertinent selection of material handling and storage equipment and operational policies. It expects students to perform relevant data analysis on limited data sets; project future needs; make appropriate assumptions and develop a reasonable solution for the immediate needs and the long term commitments for a company that is experiencing a substantial growth of its customer base. More specifically, the students must be able to process an aggregate set of data profiling the current activity of the distribution center, through basic spreadsheet-based calculations, in order to derive pertinent information related to material flow and storage requirements. They must also adjust the extracted information in order to account for the expected growth. A successful project will further require familiarity with and appreciation of (i) layout related concepts and issues, (ii) types of material handling and storage equipment, their functionality and the supported operational efficiencies, (iii) warehouse workflow management tools and policies, and (iv) capacity analysis. In order to complete the required analysis and design, students must complement the provided data with pertinent engineering assumptions and additional information researched from other sources, including the relevant literature and professional and commercial websites (part of this information will concern equipment cost and operational specifications, safety regulations and labor standards, etc.). Finally, since the case requires an economic justification of all recommendations, it is expected that students will have knowledge of basic engineering economics (e.g., the time value of money - Net Present Value (NPV) analysis over a pertinently selected time horizon, and Internal Rate of Return techniques).

CLASSROOM TESTING
Being designed to imitate a real world problem, including some data inconsistencies and/or incomplete data sets, the case should be treated as an open-ended problem in need for a good engineering design, and not as a problem that admits an exact and unique solution. In fact, in an ideal situation, it would be even more pertinent to request more than one design from each group, with an accompanying discussion of the pros and cons of each option, since such a strategy would reflect better the “real-world” practice.

The case was used as a basis for the 2001-2002 Material Handling Student Design Competition sponsored by the College Industry Council for Material Handling Education and Gross & Associates. Therefore, it has been classroom tested by all the instructors of the groups that participated in the 2001-2002 competition.

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