1 paragraph and 5 bullet point summary

LOGISTICS CONSULTING PLAN

PRESENTED BY: TEAM 3

LOGISTICS CONSULTING GROUP

VERSION 3.1

APRIL 4, 2018

4/4/2018 Logistics Consulting Plan 1

LOGISTICS CONSULTING PLAN

E X E C U T I V E S U M M A RY ( C O L L I N )

The logistics consulting team has established the logistical issues with Rector Property Management. The team has defined these in depth with data collection methods to determine the best solution to each issue. The team will continue research and provide it for compilation on February 26, 2018.

I N T RO D U C T I O N TO R E P O RT ( C O L L I N )

Rector Property Management (RPM) is a real estate company that acquires, renovates, and leases properties to citizens of Champaign-Urbana, Illinois. The CEO developed an acquisition strategy that focuses on buying properties in poor condition that are massively undervalued. He supervises the renovation and manages the project until completion, and then personally markets and leases each property. This business model was effective, but the company has grown to over 50 leases. His model for forecasting and distribution is no longer efficient.

B A C KG RO U N D A N D C L I E N T P RO F I L E ( C O L L I N )

The CEO built this company from the ground up. It started with one property in Kentucky with one lease to a company with over $500K in gross revenue. The company operates under the guidance of the CEO but relies on subcontractors to perform all renovation labor.

RPM TODAY

The business currently conducts 12-14 renovations annually. Jason would like to triple that number over the next two years and needs a distribution system to do it. He also wants to reduce the cost of materials. RPM purchased its first commercial property and will have 900 square feet of space for inventory.

BUSINESS GOALS

 Increase annual goal from 12 renovations per year to 30 per year by 2019

 Develop assessment and forecasting system to enhance renovation efficiency

 Emplace small warehouse to allow cost savings on bulk items (e.g. flooring)

 CEO shifts to a strategic management role working less than 15 hours per week

O B J E C T I V E ( E N T I R E T E A M )

The logistics consulting team met with the CEO and established the following issues.

 Issue 1: CEO personally procures all supplies and distributes them to the various projects. This will not work with the future goals of the company. Tray and Kendrick have been assigned to resolve this issue.

 Issue 2: Logistics Assessment: CEO lacks a tool to conduct a thorough inspection of projects and makes multiple trips to buy supplies. Collin has been assigned to resolve this issue.

 Issue 3: Company has 900 square feet of unused storage space. RPM would like to create a small warehouse for high demand and bulk order items. Ryan, Keily, and Mike have been assigned to resolve this issue.

4/4/2018 Logistics Consulting Plan 2

DATA C O L L E C T I O N P L A N ( E N T I R E T E A M )

The team will collect secondary data for quantitative analysis regarding the distribution and warehousing plan. This will include the review of the previous three years of purchasing to determine a plan for establishing a quality warehouse with a stockage recommendation. Additional research will be conducted on the current portfolio of properties to establish geographic dispersion. This will allow the research team to make the best recommendation for distribution and storage. Additionally, the team will work the CEO to provide an option of tools to conduct a complete review of a project to transfer to the logistics manager. This transfer of information should happen once, and it will allow the logistician to coordinate the purchase and transport all items efficiently.

ISSUE 1 – DISTRIBUTION PLAN (TRAY & KEDRICK)

1. What are the costs associated with CEO transporting supplies? a. Fuel and transport cost b. CEO lost time cost

2. What are the options for new distribution plan? a. Subcontractor conduct supply runs per project b. Hiring distributor to transport all supplies

ISSUE 2 – FORECASTING AND ANALYSIS TOOL (COLLIN)

1. How does the CEO capture requirements? a. Develop option for analog and digital methods b. Research options available (e.g. Phone Apps, Software. Etc.)

2. How does the CEO operationalize requirements for supplies and labor? a. Define the flow of information and responsibilities. b. Collaborate with small teams researching the distribution and warehousing plan to provide

connectivity and seamless plan

ISSUE 3 – WAREHOUSE PLAN (KEILY, MIKE, & RYAN)

3. Why is it important to improve warehouse capacity? a. Improve organization b. Redesign floor plan c. Reduction of cost

4. How to determine warehouse capacity? a. Size of current warehouse (length/width/height) b. Anything that would obstruct warehouse storage

5. How to improve warehouse capacity? a. Loft construction

i. Cost analysis of construction b. Types of material stored c. Shelving height for max usage of storage

6. Housekeeping requirements? a. Climate control CBA b. Reorganization of current items in the storage area

4/4/2018 Logistics Consulting Plan 3

DATA R E S E A RC H A N D A N A LY S I S ( E N T I R E T E A M )

ISSUE 1 – DISTRIBUTION PLAN (TRAY & KEDRICK)

[DEVELOP PLAN NLT 26FEB]

ISSUE 2 – FORECASTING AND ANALYSIS TOOL (COLLIN)

1. Question: How does the CEO capture requirements? Answer: The CEO currently captures requirements by generally forecasting requirements and costs. He has personally conducted over fifty renovations, and he utilizes the past experience to forecast the new projects. These are rough estimates to work for the project, and the CEO has experienced no problems thus far with completing projects within budget. He does have some issues tracking the budget real time, and analyzing costs on past projects. This is due to the lack of historical project management data and the inability to provide exact lists of labor and resources per renovation.

a. Issue: Develop option for analog and digital methods Research: Several options were researched for potential implementation. Below are three options that are available. One is a created template that will capture requirements, costs, and overall budget. The second option is Mavenlink. This is an option that has project management and forecasting capabilities with the enhanced feature of linking to QuickBooks.

ADOBE TEMPLATE

4/4/2018 Logistics Consulting Plan 4

MAVENLINK

BUILDERTREND

2. Question: How does the CEO operationalize requirements for supplies and labor? Answer: The CEO uses verbal and written communication to coordinate for labor. He organizes most tasks in his head and sends personnel to complete large, broad projects. He provides vision and utilizes their experience together to finish the project. This method works for his current amount of labor, but it will not be sufficient after the increase in projects. This needs to be rolled into his forecasting system to ensure the maximum use of resources.

ISSUE 3 – WAREHOUSE PLAN (KEILY, MIKE, & RYAN)

[DEVELOP PLAN NLT 26FEB]

4/4/2018 Logistics Consulting Plan 5

R E C O M M E N DAT I O N S A N D I M P L E M E N TAT I O N P L A N ( E N T I R E T E A M )

ISSUE 1 – DISTRIBUTION PLAN (TRAY & KEDRICK)

[DEVELOP PLAN NLT 26FEB]

ISSUE 2 – FORECASTING AND ANALYSIS TOOL (COLLIN)

Thorough research was conducted with all options available for RPM. The following are the recommendations and implementation guidance moving forward if accepted.

I recommend that Jason adopt a BuilderTrend as his project management and logistics forecasting tool. I have conducted virtual training and two live demonstrations with a representative and believe this will accomplish all significant tasks for the company. Some of the highlights listed below.

1) The software has an incredible phone app which allows access to all the features of the website. I have shown in the pictures to the right a screen allowing a small project added and a resources list for a renovation.

2) The app links directly to QuickBooks. This allows budgets to transfer, but more importantly, it allows workers timesheets to transfer to payroll. It will even specifically state the different property they are working on for performance reviews, exact cost vision, and LLC payment.

3) Jason currently manages 7-11 subcontractors, and this can become tedious when plans change early in a project. The effect can have him rescheduling multiple parties and just wasting time. This system allows Jason to change one schedule, and all parties are notified of the changes via text, email, and on the app. This allows this to understand their role and stay on track.

4) Lists can be generated on the app which allow a budget to be created and for the shopping list to be generated. This can then be transferred to the 3PL/Operations Manager for action.

Further research was conducted on Appfolio and Buildium which are two very popular systems for property managers. I would highly suggest that RPM move to Appfolio after they exceed the 100 property threshold. The marketing, management, leasing, and data analysis are incredible. This system does not, however, have a good project management system for managing renovations. I was severely disappointed but impressed that they were forthcoming. They recommended we not go their system at this time.

Implementation would be straightforward if you choose this item. Zach Rehmeier from BuilderTrend has been incredibly helpful, and would provide your services. The next project you have would utilize this

4/4/2018 Logistics Consulting Plan 6

system, and he would help you the entire way. After you pleasant experience, you can decide if this is something you want for the future.

ISSUE 3 – WAREHOUSE PLAN (KEILY, MIKE, & RYAN)

[DEVELOP PLAN NLT 26FEB]

D I S C L A I M E R

This material is based upon work conducted by the students below. Any opinions, findings, conclusions, or recommendations are those of the authors and do not reflect the views of Florida Institute of Technology, its employees or its administration.

A P P E N D I C E S

[LIST]

R E F E R E N C E S

[LIST REFERENCES]

4/4/2018 Logistics Consulting Plan 7

CONSULTING APPROVAL

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