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Example Report resulting from restructuring information in Exercise Two note that this is still a rough version and

d requires further editing. The proposal section in particular is weak and unsubstantiated and the report lacks good conclusions, however, it is a vast improvement on the first version in Exercise 1.

Proposal for Restructuring the Distribution arrangements of The Fictional Oil Company
Aim: To investigate the system of oil distribution for The Fictional Oil Company in order to identify possibilities for restructuring the company to increase efficiency. Specific objectives: Identify which depots are the most financially viable options Identify which depots could be closed or relocated. Explore the advantages and disadvantages of closing/relocating the underperforming depots, with respect to company employees and customers, respectively. Give recommendations for restructuring the oil depots of The Fictional Oil Company 1. 0 Position The Fictional Oil Company is based in Hertfordshire and has five sites. The main oil terminal is in Hemel Hempstead, which supplies oil to 3 smaller depots in Ware, Watford and High Wycombe. These depots then supply the companys customers. There is also a Regional Accounts Office on the same site as the Watford depot. The current position for the 3 smaller oil depots is as follows: The Ware and Wycombe depots are distributing 10 and 12 million litres of oil a year respectively, but Watford is down to 7 million. The Wycombe and Ware depots are thriving, with strong demand from the farming community and new industrial estates being built in both areas, however, we are not currently supplying as much oil as we used to from the Watford depot, and we have to consider if it is still viable to keep it open. Moreover, Wycombe and Ware are both performing above the 20% return of sale required by the company but Watford is below this at 13%. With respect to staffing issues there is room for extra delivery staff at Ware, but not at Wycombe. Neither of these depots offer the facility of a railway siding, which is available at Hemel Hempstead. 2.0 Problems The problem being faced by The Fictional Oil Company can be summarised as follows: It costs us money to deliver oil from Hemel Hempstead to Watford, and the same oil is sometimes also delivered to customers in Hemel Hempstead, so, in effect, were incurring two lots of delivery costs but only being paid once. Another problem weve had at the Watford depot has been a relatively weak sales team, compared with the Ware and Wycombe branches. Salespeople at Watford have come and gone over the last three years, with the result that customers have been persuaded to go to the competition fairly easily. Sales of ancillary products such as lubricants and barrels of diesel are also down at Watford.

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Example Report resulting from restructuring information in Exercise Two note that this is still a rough version and requires further editing. The proposal section in particular is weak and unsubstantiated and the report lacks good conclusions, however, it is a vast improvement on the first version in Exercise 1.

However, there are a number of issues to be overcome if the Watford employees were to be relocated to either Hemel Hempstead, Ware or Wycombe. Firstly, the Regional Office staff will not be happy about the possibility of moving to Hemel Hempstead; most of them live in or around Watford, and it will cost them more to get to work each day. Secondly, not all of them drive. With respect to the depot drivers, the drivers wouldnt like going to Wycombe or Ware and all new drivers would need to possess an HGV class 1 licence. The Ware depot could easily accommodate the extra staff, but its been known for a long time that the depot manager there is extremely abrasive and has upset drivers from other depots on a number of occasions. Putting extra drivers and delivery vehicles into the Wycombe depot could be a problem because the depot is in the middle of a residential area, and is already the subject of numerous complaints every year. The residents state that theyre woken up very early by lorries going up and down the road, and even in the middle of the night when deliveries are being made to the depot by the Hemel Hempstead night shift. 3.0 Possibilities 1. The first possibility is to keep the Watford depot open for another year to 18 months, because the government is considering building a massive housing estate on the edge of the town, which could open up a new oil market in the area. The dwellings will be managed by the local council, which were currently talking to about oil supplies. If the heating system of each house was oil fired, and the total number of new houses was between three and four thousand, then that would add another eight million litres on to Watfords throughput. If the new estate was built, and we got the contract, then wed need to invest in another three or four small- to medium-sized delivery vehicles, and also need to recruit more staff. 2. The second option is to close the Watford depot and move the staff to Hemel Hempstead. There is sufficient office space at the Hemel Hempstead location to house the staff that may move in from Watford. We would have to consider reimbursing staff for the additional travelling involved. 3. The third option is to close the Watford depot, but instead of relocating the delivery staff to Hemel Hempstead, we could divide the current Watford delivery area between Wycombe and Ware. In this case, three drivers could relocate to each location. 4.0 Proposal The final proposal of this report is that the Watford office should close and be moved to the Hemel Hempstead location, along with the Regional Office staff, as this move alone would add another 1% on the net profit of The Fictional Oil Company.

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