West marine case study


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West marine case

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West marine case study

  1. 1. West Marine: Driving growth through Shipshape Supply Chain Management Case Solution Submitted By Ranjeet Kumar Singh (11BM60068)
  2. 2. West Marine: Merger with E&B Incident  In 1997 , West Marine acquired an East Coast competitor, E&B Marine  Sales fell by almost 8 %  Peak-season out-of-stock levels rose more than 12%  Supply Chain was badly hit  West Marine not enough to support an organisation double its size
  3. 3. West Marine: Strategy Focus post 1998.. (1/2) 1. Leadership  Key players were changed by veterans from the industry  People were recruited based on experience in large and complex retail organization 2. Strategy  Each executive was given the mandate to turn around his respective function  Strategic plan started with West Marine’s vision of being ‘the best boating products company everyday’  Outlined performance indicator goals - ROE, cash flow, comp sales, EPS, Productive Service Levels, Market Share and customer & associate satisfaction  SWOT analysis
  4. 4. West Marine: Strategy Focus post 1998.. (2/2) 3. People and Culture  Cultural Change drive on providing “better than expected customer service”  Leadership team addressed all the problems head on  Outside experts in cultural change were brought in  Significant effort was put in redefining roles  Silos mentality was transformed to new transparent communication 4. Systems and Processes  Every processes were reviewed and reinvented  Strategy was focused on take SG&A out of the business at the same time to starts the operations more effectively
  5. 5. Supply Chain Collaborations  Particular emphasis on changing the Supply Chain Management Practices  Supply chain was more complex as compared to most speciality retailers.  E&B acquisition further compounded supply chain challenges by adding more stores, new SKUs and different assortments.  Improvements started with team putting halt to all store expansion to relieve immediate pressure  Critical importance was placed on improving end-to-end supply chain visibility and effectiveness, driving down related costs and improving the level of SCM collaboration within and outside west marine.  Also, later focus shifted to Collaborative planning, forecasting and replenishment (CPFR).
  6. 6. CPFR: Implementation at West Marine (1/2)  Collaborative Planning, Forecasting and Replenishment- combined & capitalized on the intelligence of multiple trading partners in the planning and fulfilment of customer demand.  Works on the development of a single, shared forecast that supported the joint plans of the trading partners  Clear performance measures are defined to document operational performance expectations.  Risk is monetized so that partners faced clear financial consequences  Incentives were used to motivate collaborative, cooperative behaviour and to share the benefits.  Exchange of more timely, complete and realistic forecast data, which led to higher forecasting accuracy.
  7. 7. CPFR: Implementation at West Marine (2/2)  Linked best practices of sales and marketing divisions.  Adopted conventional order management, with the retailer driving forecast, order planning and order generation.  Implemented a successful, robust linkage between the point-of-sale and DC systems to maximize automation and mass-maintenance procedures which gave multi-echelon replenishment solutions.  Implemented EDI using SPS commerce solution  Stock rates at the stores came close to the goals of 96% in every store  Forecast accuracy climbed up to 85%  On-time shipments were also improved.
  8. 8. STRATEGIES - For Proposed Takeover of BOATU.S.  Requirement of Vendor and SKU rationalization effort  If going for Dual-Branding Strategy and decides to maintain the BoatU.S. brand, the company has to develop a more diverse product base and more unique assortments.  Integration of the replenishment activities  Overall complexity involved in the supply chain integration of both companies is high since both offered 50,000 SKUs via stores, internet and catalogues.  The experience gained from the CPFR needs to be used and applied for the successful integration of two companies.
  9. 9. Recommendations for Acquiring BOATU.S. (1/2)  Seek long-term, holistic solutions, not quick or myopic fixes  Reconcile conflicting goals and metrics  Pursue inclusive problem-solving; do not depend upon “experts” who don’t have accountability for the business  Install collaborative processes that encourage idea creation, shared problem solving, and high adoption rates across organizational boundaries  Use a disciplined and iterative set of methodologies such as CPFR, SCOR, or Six Sigma to help teams define issues, root causes, and solutions  Develop a culture of continuous improvement, particularly at the customer-facing associate level
  10. 10. Recommendations for Acquiring BOATU.S. (2/2)  Create clear accountabilities and assign authority with a focus on core business processes rather than on traditional organizational “silos” or loyalties  Commit to technology enablement for execution, communication, exception management, and root-cause analysis  Reduce decision cycle times and Implement rapidly  Warehouse replenishment - Responds to all store-level overstocks and under stocks which eliminates duplicate forecasting  Integration of DC in 30 days post acquisitions and in-store operations in 60 days
  11. 11. THANK YOU !!