Vital Vitamins

Download Full Case Description in PDF format

Date approved for distribution: 15 December 2004

Author:

Janet Wolf
Senior Undergraduate Student
GradoDepartment of Industrial and Systems Engineering
Virginia Polytechnic Institute and State University
Blacksburg, VA 24060

Dr. Russell D. Meller
Associate Professor
GradoDepartment of Industrial and Systems Engineering
Virginia Polytechnic Institute and State University
Blacksburg, VA 24060

Keywords:

Facility Layout
Material Handling
Product Flow Analysis
Capacity Analysis
Process & Schedule Design
Warehouse Operations
Manufacturing Systems

Abstract: Vital Vitamins is a manufacturer and distributor of over the counter vitamin supplements, specializing in sports nutrition proteins, powders, and drinks, and weight management products. They ship to company-operated retail stores, and directly to consumers on internet and phone orders. They also have a line of Vital Brand™ products, which are generic labeled knock-offs of some of their best sellers, manufactured in-house. Due to tremendous growth, Vital has outgrown its existing facilities and is in the process of building a new warehouse. This new building will house offices, manufacturing, distribution and warehousing of finished goods, raw materials and packaging supplies. Vital Vitamins currently operates its manufacturing and shipping staff on a 10 hour schedule. They wish to remain on this schedule. Vital has provided all the current inventory and sales data for this facility, anticipating that internet and catalog sales will grow 2% per year and store sales will grow 20% per year. It is assumed that order characteristics (lines per order, units per line, etc.) will continue at current levels. Vital wishes to develop the best material handling, storage and product flow for this facility including the Vital Brand™ manufacturing space. They have hired another contractor to design the corporate office space and outlet store, and only need to know the locations of these in the warehouse, not the internal design. They expect the new warehouse to be sufficient for 5 years growth at peak volume levels.

LEARNING OBJECTIVES
This case is designed for use in a junior or senior facility design, material handling, or production and operations management class. The learning objectives are:

To analyze a real material handling problem similar to those found in practice.
To make reasonable assumptions related to give data sets, and make reasonable engineering decisions.
To learn how to estimate material flow, inventory, and space requirements.
To specify material handling equipment.
To conduct a complete economic analysis (optional).

COMPLETION TIME
If worked in teams of 4-5 students, it should take about 5 weeks for students to develop and justify a reasonable solution, write a formal report, and make a presentation of their findings.

SKILLS REQUIRED
The case, as designed, targets a manufacturing and warehousing environment. It expects students to analyze somewhat limited data sets and reason out immediate needs and long term growth plans for a company experiencing a market shift. Because of the breath of desired outcomes, it could be used in a variety of classes and with students at different levels. Students should be able to perform basic data analysis using spreadsheets, and should at least be familiar with basic material handling equipment (conveyors, lift trucks, pallets, etc.) They should also be able to perform basic flow calculations and find volume-distance products to compare designs. Students should be able to compute equipment and labor utilization, material accessibility, space utilization and be familiar with order picking techniques. If the instructor requires students to perform the economic justification of the alternative facility designs, some basic engineering economics (time value of money, net present worth, and internal rate of return techniques) would be needed.

CLASSROOM TESTING
This case was used as the basis for the 2003-2004 Material Handling Student Design Competition sponsored by the College-Industry Council for Material Handling Education, Design Plans & Ideas, and Gross & Associates so it has been classroom tested by the author and the many other instructors whose teams submitted entries. Based on the results of that experience, it is clear that (like all cases) Vital Vitamins does not provide students with every possible detail needed to provide an exact solution. As expected with all real world problems, there may be inconsistencies or incomplete descriptions of the data provided. As such then, students will be forced to use engineering judgment concerning the data and will be required to make and to justify appropriate assumptions.

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