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Case Study
What elements define a value for the customers of the Romulus plant?
There are two elements that define customers for the Romulus plant. The first element is convenience. In this case, the Romulus plant’s production has specialized on a single product (car seats) that serves a single customer thereby ensuring that focus is on this customer. The second element is operational efficiency whereby customer and Romulus plant operations are synchronized such that seats are delivered on time and in the order in which they are needed. This ensures that the customer does not experience production delays. The third element is location whereby the plant is located 38 miles from its customer thus ensuring that the seats can speedily and easily be moved using the available road network. The third element is production similarity. Romulus plant receives its raw materials packaged in batches for each seat and ends up sending each finished seat when required. This facilitates quality tracking for all seats. The fourth element is capacity since Romulus plant has managed to meet its customer’s needs by producing all the seats required by Warren. The final element is warehousing and storage whereby Romulus offers temporary storage to consolidate the produced seats so that Warren does not require storage for these seats and only needs to install them when received.
What is the role of logistics and logistics considerations in the success of the Romulus plant?
Romulus plant’s success can be attributed to its logistics considerations, particularly its strategy of easing logistics operations.

Firstly, the plant is located 38 miles from its customer thereby ensuring that it can make speedy deliveries since this is a close location. Additionally, the close location makes use of road networks that is a relatively cheap transportation mode thus reducing the costs that are passed on to customers. Secondly, the plant is located next to a major highway thus easing the movement of goods using the road network. Thirdly, plant operations have been simplified to reduce the need for skilled workers thus allowing the company to spend less on personnel. Also, the workers are cross-trained so that there are no production delays when a worker is indisposed. Fourthly, the company has linked its communication systems with those of the customer so that production is synchronized thus ensuring that the right seats are delivered in a timely manner to the customer. Fifthly, production materials are received in bundles that are intended for each seat thereby easing production. Finally, the seats are consolidated once produced and delivered when needed thus ensuring that the customer’s warehousing need is reduced. In addition, the consolidation reduces costs since seats are moved when the required load capacity is reached thus ensuring efficient use of the available trucks. In this respect, logistical considerations have played an important role in Romulus plant success.