Blanchard Importing and Releasing II1
Following his first year in the Harvard Business School, Hank Hatch acknowledged summer job with Blanchard Importing and Distributing, a Boston firm that dealt in the processing and wholesaling of alcohol based drinks. Early in June 1972 Hank met with Toby Tyler, the company's basic manager, who was a recent graduate of the Harvard Business School. Toby explained the initial responsibilities that this individual wanted Hank to perform: Hank, during your early days at Blanchard, I need you to know more about the general scope of operations of the firm. As you investigate our different product lines, I believe you will find that the most rapidly increasing demand for alcohol based drinks is in the wine market. Nowadays we approximate that we can earn a before-tax return of twenty percent on any money we put in wine merchandising. However , as of yet, Carmen Petrillo, our Wine beverage Division administrator, and Dave Rubin, the Sales Section manager, have been unable to make use of this tendency due to lack of funds needed to hire knowledgeable wine sales staff and build up an adequate products on hand of wine beverages. Here is a recent balance sheet which shows that we have just about come to the limit of our borrowing capability [see Show 1]. It appears that a reduction in inventory level may be the only significant source of funds available to all of us. That's to come in. After you've become accustomed to our procedures, I'd like one to spend some time analyzing the inventory situation and recommend ways in which we can save money in that region. Initially, you can look into the approach we utilization in scheduling production runs of people beverages which we bottle of wine ourselves. The latest scheduling program, which was initiated in August 1969, requires bottling of your Economic Purchase Quantity (EOQ) of an item when the share level of that item is catagorized below a set Reorder Stage (ROP). This kind of Reorder Stage trigger level is corresponding to 3½ weeks' worth in the average weekly demand throughout every season ending Oct 31, 1969. I suspect that many of the EOQ and ROP quantities worked out in 1969 should be recalculated based on changes in annual require over the past 2½ years. Like a first task you can revise the EOQ and ROP figures. As long as you're at that, keep thinking about ways in which we are able to reduce expenses and reduce unnecessarily high stock levels — any cash which can be made available pertaining to wine promoting will be tremendously appreciated by Carmen and Dave. Products
During the first days of Summer, Hank found that Blanchard was a full-line liquor house that distributed equally imported and domestic merchandise including wine beverages, beer, unadulterated spirits, cordials, and premixed cocktails. Blanchard purchased prebottled goods (called uncontrolled stock) for reselling to stores at wholesale prices. Out of control stock accounted for 45% in the firm's twelve-monthly sales. The remaining 55% of Blanchard's revenue was related to sale of manipulated stock, those items that Blanchard bottled and sold beneath its own brands and private labels. In 06 1972 manipulated stock contains 158 products that Blanchard processed in the own bottling facility. These kinds of 158 products were differentiated by jar size, type and evidence of beverage, and brand label. Blanchard made 25 items in half gallons, 63 in quarts, 42 in fifths, 12 in pints, and 16 in half-pints. Business History
The Blanchard brand was at first established like a chain of retail alcohol stores, the first of that was opened in 1938 by John G. Corey. In 1957 Corey became enthusiastic about wholesaling alcohol-based drinks and commenced distributing case goods to retail outlets. To devote his full attempts to this fresh venture, Corey transferred possession of the cycle of Blanchard retail outlets to other users of his family. In 1964 the modern day warehouse and office center was completed, and in 1966, equipment was installed allowing the transformation of raw bulk mood to bottled goods available under the business own...