Early in 2008, Tony Truesdale, President of the Vitamin Shoppe, was preparing for a meeting with the company's investment bankers. In particular, he was wrestling with supply chain issues that were becoming increasingly pronounced in light of the company's aggressive growth plan. Truesdale recognized that it was nearly impossible to effectively manage the company's large and fragmented supply base, resulting in higher than necessary costs and lower than desired performance. The company also relied too heavily on one supplier for a significant amount of the company's volume. Truesdale recognized that it was nearly impossible to effectively manage the company's large and fragmented supply base, resulting in higher than necessary costs and lower than desired performance. The company also relied too heavily on one supplier for a significant amount of the company's volume.
Further, in the company's single distribution center, 95 percent of the available storage capacity was utilized throughout most of 2007; well above what was considered optimal. The lack of space was driving excessive product handling and increasing operating expenses. The company's inbound and outbound transportation strategies also contributed to inefficiencies and unnecessary costs. Operating efficiencies could be achieved if all transportation needs were brought together under one strategic umbrella. Truesdale was certain that in order to reach the company's growth targets and maintain its competitive advantage, addressing these supply chain issues was critical. Students are asked to describe the specific issues affecting supply chain performance and recommend approaches to solving the problems
