Establishment of new fender Fender had always recognized the importance of an open-door policy for professional musicians, accommodating their requests for specific features on an individual basis. The Fender Custom Shop has since become known worldwide and industry-wide as the pinnacle of craftsmanship and sheer instrumental artistry.
A supply chain is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer. The Supply Chain Council (1997)
A supply chain consists of the flow of products and services from:Raw materials manufacturersComponent and intermediate manufacturersFinal product manufacturersWholesalers and distributors andRetailersConnected by transportation and storage activities, andIntegrated through information, planning, and integration activitiesMany large firms are moving away from in-house Vertically Integrated structures to Supply Chain Management
Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on :a) Revenue growthb) Better asset utilization c) Cost reduction
Fender international distributorsworldwide network of authorized dealersEurope, Asia , middle east, Africa, Oceania, North America, South AmericaGlobalization /Civilization of music instrumentsa) Company & product expansion -purchase of a number of other instrument firms,-Branching out into making and selling new types of guitars eg steel-string acoustic. Cultural or intellectual refinement; good tasterapid spread and adaptation of most instruments in places far from their originVintage collectionguitars are known worldwide as the instruments that started the rock revolution, highly prized by today’s musicians and collectors.Companies bought Guild Guitar Company, the Sunn Amplifier Company, SWR Sound Corporation. Kaman Music Corporation, which owns Ovation acoustic guitars, LP and Toca hand percussion products, Gibraltar Hardware, Genz Benz Amplification, 4. Attention to Customer Details- Fender Custom Shop Service Department to preserve the special qualities that make each customer's guitar unique- 21 point inspection 5. Good investmentThe correct guitar can be worth a lot to a collector Guitars also don’t lose value over timeHigh demand guitar replicas made by Fine craftmen
Fender International Supply Chain
Case Study 11.2Fender International- Creating A Positive Retail Experience (Alex and Terry Hill, 2011)
Group MembersMiranda Nasasara Nathan Williams Subhi Pradhan
Table of Contents• Case Study Summary• Company Background (Fender International)• Case Study Questions• Supply Chain Management• Importance of Supply Chain• Origins of Supply Chain• Current Trends of Supply Chain• Case Study Question 1• Case Study Question 2• Case Study Question 3• Discussion• Conclusion
Case Study Summary• Fender International’s aim a) A guitar must be playable straight from the box• Created a ‘positive retail experience’ in their supply chain• Created a partnership with UPS European Distribution Centre a) Inspection of guitars by players before being sent to customers. b) Inventory management c) Returned faulty guitars
Company Background• World’s leading manufacturer of electric guitars.Year BackgroundIn 1940 Founded by Clarence Leonidas "Leo" Fender.In1965 Company sold to CBS.Until1980 The company experienced tremendous growth.In 1985-1990 a group of employees and investors led by Schultz bought Fender from CBS but there were no buildings or machinery included in the sale.
Background contd..Year EstablishmentIn 1985 Saw the establishment of Fender’s flagship U.S. factory in Corona, California (move toward greater quality control )In 1987 a) A second modern manufacturing facility opened in Ensenada, Mexico. b) - the renowned Fender Custom Shop opened at the Corona facility, creating dream instruments for professional guitarists and guitar enthusiasts.
Fender’s Products and BrandsProducts BrandsElectric Guitars MustangBass Guitars Jazz BassAcoustic Guitars BanjoGuitar Amplifiers Hot rodBass Amplifiers Bass man ProFender Audio • PicksAccessories • Stands • Straps • Strings • Tuners
Case Study Questions1. What is the significance for Fender International of the guitar tuning service offered by UPS?2. Why do you think distributors are now ordering products that they never ordered before?3. What action would you suggest to take in the improbable case that a customer returns a faulty guitar? Is it manufacturers’ fault? Is it transportation’ fault OR tuner professional / amateur musicians’ fault?
Supply Chain ManagementDefinition of Supply Chain:• “The sequence of organizations- their facilities, functions and activities-that are involved in producing and delivering a product or service” (Slack et. al., 2011)• “functions within and outside a company that enable the value chain to make products and provide services to the customer “ (Cox et al.,1995)
Importance of Supply Chain•To remain competitive•Faster product availability•Faster product delivery•Discovery of value-enhancing and long term benefitsWho benefits most? Firms with: – Large inventories – Large number of suppliers – Complex products – Customers with large purchasing budgets
Origins of Supply Chain Management 12 Johnson and Davis (1995)
Current Trends in Supply Chain Management• Expanding the Supply Chain• Increasing Supply Chain Responsiveness• The Greening of Supply Chains
Q1: Significance for Fender International of the UPS service• Streamline inventory management• Quality inspection.• Improve customer service.• Tailor warehouse services.• Centralized transportation.
Q2:Why are distributors ordering products that they have never ordered before? Fender international distributors • Worldwide network of authorized dealers. • Europe, Asia , middle east, Africa, Oceania, North America, South America. Globalization /Civilization of music instruments a) Company & product expansion b) Vintage Collection c) Attention to Customer Details d) Good Investment
Q3: Actions suggested to take in theimprobable case that a customerreturns a faulty guitar?• 21-Point Inspection• Non-warranty repair work• Complete Documentation• Worldwide Repair/Service Options• Complimentary Shipping
Contd…• The fault possibly lands with transportation and the amateur players.• Manufacturers should be able to put together a playable guitar when taken out of the box.• Transportation may not have transported the guitars in the best way.• Guitars maybe being inspected by players that are not doing their job properly.
Discussion• Do you think bringing in amateur musicians to fine tune Fender’s guitars is a good idea?
Conclusion• Existence of the importance of the services offered by UPS services.• Company & product expansion.• Attention to Customer Details.• Current service is quite good.• Transportation & amateur players at fault.
References• Cox, J.F., Blackstone, J.H. and Spencer, M.S. (Eds) (1995) APICS Dictionary (8th ed.), American Production and Inventory Control Society. Falls Church, VA.• Johnson, M.E. and Davis, T. (1995) Gaining an edge with supply chain management. APICS – The Performance Advantage. 5 (12), 26-31.• Hill, A. and Hill, T. (2011) Fender International :Creating A Positive Retail Experience ,Palgrave.• Fender (2011) About Fender. Available online at http://www.fender.com/ . [Accessed 20/01/12].• Slack, N., Chambers, S., Johnston, R. and Betts, A. (2009) Operations and Process Management: principles and practices for strategic impact . 2nd edition, FT Prentice Hall, Harlow.• UPS (2011) About UPS. Available online at www.ups.com. [Accessed on 23/01/2012].