Toops Wholesale

Abstract

The general manager of a grocery distributor in New Zealand must decide whether to consolidate its regional warehouses into one central location. The decision has been made more urgent by the recent loss of a distribution channel to a competitor. The company must weigh the cost benefits against any potential impact on the customer service for which it is known.

Excerpt

UVA-OM-1356

Rev. Feb. 27, 2012

TOOPS WHOLESALE

While training for the Karapoti Classic, New Zealand's premier mountain bike event on Karapoti Mountain, Craig McCulloch, general manager of Toops Wholesale in Wellington, New Zealand, couldn't stop thinking about the challenges he was facing at work.

It had been a year since his syndicate had made a presentation at a two-week Ernst and Young management program in Taupo proposing the consolidation of warehouses for Toops, a wholesale food distributor in the lower North Island (Exhibit 1). At the time, he knew that the consolidation provided strategic benefits for Toops; more recently, the loss of a major distribution channel to a competitor made the cost benefits even more crucial.

Shifting gears for a technical descent on singletrack, he considered the potential cost savings of the consolidation proposal.

. . .

Keywords: consolidation