RP Turner Corporation makes pipeline valves for the oil industry in Western Canada. It buys materials from Japan, the USA and Eastern Canada, manufactures valves in Edmonton, Alberta, and ships the finished products to oil fields in the North. In 2000 it started a major project to reduce the cost of logistics.Managers soon found that the separate activities worked more or less independently. This was sometimes all too obvious when the three main Departments – Marketing, Production and Finance – were in different locations. Production was in Edmonton, as the nearest major city to the oil fields; Marketing was in Calgary near to oil company headquarters; Finance (including procurement) was in Vancouver near the port and financial centre. Canada is a big country, so Production was a thousand kilometres away from Finance, 500 kilometres away from Marketing and over two thousand kilometres from delivery points. How would you set about improving logistics?
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