case study of supply chain management system

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By Supplychainopz

Professionals in supply chain management use various methods to determine how to improve the performance of supply chain operations. Analysis of case study is certainly one of the most popular methods for people from business management background. In order to accelerate the learning, this article has gathered 20+ most sought-after supply chain case studies, analyzed/categorized them by industry and the findings are presented.

Boeing wants to encourage more flight frequency and direct route using a smaller capacity aircraft. Then they decide to outsource many things such as the design, testing and production of key components to key industrial partners and try to reduce number of components that go to assembly. The ultimate goal is to finish the final production process within 3 days. Airbus takes a bit different marketing approach. They want to utilize high capacity airplane to help airlines drive the operating cost down. They decide to selectively outsource the production of parts and keep the design and production of key components in-house.

Supply Chain of fashion industry involves a time based competition. Many customers have the unique product needs but a competition is very fierce because of the low barriers of entry. Many new players try to offer specialized products to customers all the time. This section features the supply chain case studies of H&M, Benetton, Zara and Adidas. –  H&M  aims to be the price leader in the fashion market.In order to materialize its vision, H&M tries to eliminate the middlemen in various stages of supply chain and consolidate the buying volumes. Product design is also the central part of its strategies. They don’t try to follow the high fashion designs but try to adopt the street trends which are easier to produce. At the end of the day, they can bring products to market within 2-3 weeks. –  Benetton , in contrast, chooses to have a full control of its production but allow its licensees to operate the stores so they can focus on production and quality control. The reason is that they would like to create the worldwide brand awareness. For fast moving products, they use the production facilities in Europe. Asian suppliers will perform production for standardized products. –  Zara  is very famous for its time based strategy. In order to launch a new product within 15 days, Zara uses a small lot production. A new product will be tested in pilot stores. If product sales is good, a larger batch will be ordered. Otherwise, remaining products will be removed from the shelves and sold as mark-down in other stores. This creates the perception among consumers that Zara’s products are unique and you have to take it while stock lasts. Vertical integration contributes to the success of Zara, they own the majority of its production facilities and stores (this is the reason why Quick Response can be effectively implemented). Its automated distribution centers are strategically located between the center of populations so products are delivered to stores quickly. Zara also works with Air France, KLM Cargo and Emirates Air in order that they can coordinate directly with the airlines to make the outbound shipments to its stores and bring back some raw materials and semi-finished materials with return legs. The last supply chain case study in the fashion retailing industry is  Adidas . In order to cope with changing customers’ demand, they decide to undertake Mass Customization strategy. The whole idea is to develop, market and deliver the product variety that most customers will find what they want. The first steps towards mass customization is to strategically offer the product choices. Too few variations will disappoint a customer but too many variations will simply postpone a buying decision. After that, Adidas asks the same key suppliers to produce custom components in order to achieve the economy of scale. In order to compensate a long waiting time, Adidas uses air freight or courier service. The reason why they can do this is that customized products are sold directly to customers so they have the higher profit margin to compensate the higher transportation cost. Supply chain strategy of the fashion retailing industry is summarized as below,

FMCG industry is typically the products sold to customers at a low cost and will be completely consumed within 1 year. The nature of this industry is the short product life cycle, low profit margin, high competition and demand fluctuation. This section will present the case studies of P&G, Unilever and Coca-Cola respectively. Forecasting and new product introduction has always been the issues for many FMCG companies,  P&G  is no exception. To cope with this, P&G conducts a merchandise testing at the pilot stores to determine the customer’s response to new product before the launch. The result is that the forecast accuracy is improved because a demand planner has an additional source data to make a better decision. Moreover, products can be shipped to stores in-time then lost sales is minimal. –  Unilever  also feels that the competition in FMCG industry has significantly increased. They have to launch the new products on regular basis but the forecasting of new product is difficult. So they create a better classification of new products (base, relaunch, repack, new) using a regression model to identify potential forecast errors for each type of new product. –  Coca-Cola  doesn’t really have many stock keep units when compared with other companies in the same industry. However, products go to over 2.4 million delivery points through over 430 distribution centers. Managing transportation at this scale is the absolute challenge. In order to streamline the delivery, Coca-Cola implemented a vehicle routing software. The reason is that is the software vendor has a very good relationship with Coca-Cola’s legacy ERP software vendor. Moreover, the vendor has a solid connection with the university who can help to develop the algorithm that fits in with the business’ needs. The result is that transportation planners at each distribution center can use the new tool to reduce travelling time/distance on daily basis.

Lean manufacturing concept has been implemented widely in the automotive industry so the case studies about lean manufacturing is very readily available. Due to the increasing competition in the automobile industry, car manufacturers have to launch a new model to the market more frequently. This section will show you how BMW manages a long term planning, how Ford applies lean concept to the new product development and how Hyundai manages the production planning and control. –  BMW  uses a 12-year planning horizon and divides it into an annual period. After that, they will make an annual sales forecast for the whole planning horizon. After the demand is obtained, they divide sales into 8 market and then select the appropriate production sites for each market, considering overall capacity constraints and total cost. As you may notice, this kind of a long range planning has to be done strategically. –  Ford  calls its product development system as “work streams” which include the body development, engine development, prototyping and launch process . The cross-functional team are the experts and their roles are to identify key processes, people, technology necessary for the development of new prototype. Each work stream team is responsible to develop timeline of each process. Detailed plan is usually presented on A3 sized paper. They clearly identifying current issues they are facing with supporting data, drawings and pictures. On weekly basis, they organize a big group meeting of all work stream team to discuss the coordination issues. –  Hyundai  deploys a centralized planning system covering both production and sales activities across the facilities and functional areas. They develop a 6-month master production plan and a weekly and a daily production schedule for each month in advance. During a short term planning (less than one month), they pay much attention to the coordination between purchasing, production and sales. Providing a long term planning data to its suppliers help to stabilize production of its part makers a lot.

Life cycle of technology products is getting shorter and shorter every day. Unlike FMCG, the launch of a new product in the hi-tech industry requires the investment in research and development quite extensively. Then, a poor planning will result in a massive loss. This section will cover JIT and outsourcing by Apple Inc, Supply Chain Risk Management by Cisco System, Technology Roadmap by Intel, Supply Chain Network Model by HP, Mass Customization by Dell and Quality Management by Sam Sung. Steve Jobs invited the Tim Cook to help to improve  Apple’s Supply Chain  in 1998. Jobs told Cook that he visited many manufacturing companies in Japan and he would like Cook to implement the JIT system for Apple. Jobs believed that Apple’ supply chain was too complex then both of them reduced the number of product availability and created 4 products segment, reduced on hand inventory and moved the assembling activities to Asia so they could focus on developing the breathtaking products that people wanted to buy. –  Cisco Systems  would like to be the brand of customer choice so they implement a very comprehensive supply chain risk management program by applying basic risk mitigation strategies, establishing appropriate metrics, monitoring potential supply chain disruptions on 24/7 basis and activate an incident management team when the level of disruption is significant. –  Intel ‘s new product development is done by the process called Technology Roadmap. Basically, it’s the shared expectations among Intel, its customers and suppliers for the future product lineup. The first step to prepare the roadmap is to identify the expectations among semiconductor companies and suppliers. Then they identify key technological requirements needed to fulfill the expectations. The final step is to propose the plan to a final meeting to discuss about the feasibility of project. Some concerning parties such as downstream firms may try to alter some aspects of the roadmap. Technology Roadmap allows Intel to share its vision to its ecosystem and to utilize new technology from its suppliers. –  HP ‘s case study is pretty unique. They face with a basic question, where to produce, localize and distribute products. Its simple supply chain network model is presented below,

From this example, only 3 possible locations result in 5 different way to design the supply chain. In reality, HP has more production facilities than the example above so there are so many scenarios to work with. How should HP decide which kind of a supply chain network configuration they should take to reduce cost and increase service to customer? The answer is that they use the multi-echelon inventory model to solve the problem. –  Dell  is one of the classic supply chain case studies of all time. Many industries try to imitate Dell’s success. The key ingredients of Dell’s supply chain are the partnership with suppliers, part modularity, vendor managed inventory program, demand management and mass customization. Also, you can find the simplified process map of Dell’s order-to-cash process as below,

–  Sam Sung  has proven to be the force to be reckoned with in the hi-tech industry. The secret behind its supply chain success is the use of Six Sigma approach. They studied how General Electric (GE), DuPont and Honeywell implemented six sigma. After that, they have created their own implementation methodology called DMAEV (define, measure, analyze, enable, verify). They use the global level KPI to ensure that each player in the same supply chain is measured the same way. Also, they utilize SCOR Model as the standard process. Any process changes will be reflected through an advance planning system (APS).

The last industry covered here is the general merchandise retailing industry. The critical success factor of this industry is to understand the drivers of consumer demand. Four case studies will be presented, namely, 7-11, Tesco, Walmart, Amazon and Zappos. –  7/11  is another popular case study in supply chain management. The integration of information technology between stores and its distribution centers play the important role. Since the size of 7/11 store is pretty small, it’s crucial that a store manager knows what kind of products should be displayed on shelves to maximize the revenue. This is achieved through the monitoring of sales data every morning. Sales data enables the company to create the right product mix and the new products on regular basis. 7/11 also uses something called combined delivery system aka cross docking. The products are categorized by the temperature (frozen, chilled, room temperature and warm foods). Each truck routes to multiple stores during off-peak time to avoid the traffic congestion and reduce the problems with loading/unloading at stores. –  Tesco  is one of the prominent retail stores  in Europe. Since UK is relatively small when compared with the United States, centralized control of distribution operations and warehouse makes it easier to manage. They use the bigger trucks (with special compartments for multi-temperature products) and make a less frequent delivery to reduce transportation cost. Definitely, they use a computerized systems and electronic data interchange to connect the stores and the central processing system. –  Wal-Mart ‘s “Every Day Low Prices” is the strategy mentioned in many textbooks. The idea is to try not to make the promotions that make the demand plunges and surges aka bullwhip effect. Wal-Mart has less than 100 distribution centers in total and each one serves a particular market. To make a decision about new DC location, Walmart uses 2 main factors, namely, the demand in the proposed DC area and the outbound logistics cost from DC to stores. Cost of inbound logistics is not taken into account. There are 3 types of the replenishment process in Wal-Mart supply chain network as below,

In contrary to general belief, Wal-mart doesn’t use cross-docking that often. About 20% of orders are direct-to-store (for example, dog food products). Another 80% of orders are handled by both warehouse and cross dock system. Wal-Mart has one of the largest private fleet in the United States. The delivery is made 50% by common carriers and 50% by private fleet. Private fleet is used to perform the backhauls (picks up cargoes from vendors to replenish DCs + sends returned products to vendors). Short-hauls (less than one working day drive) is also done by the a private fleet. For long-hauls, the common carriers will be used. There are 2 main information system deployed by Wal-Mart. “Retail Link” is the communication system developed in-house to store data, share data and help with the shipment routing assignments. Another system is called “Inforem” for the automation of a replenishment process. Inforem was originally developed by IBM and has been modified extensively by Wal-Mart. Inforem uses various factors such as POS data, current stock level and so on to suggest the order quantity many times a week. Level of collaboration between Wal-Mart and vendors is different from one vendor to the other. Some vendors can participate in VMI program but the level of information sharing is also different. VMI program at Wal-Mart is not 100% on consignment basis. –  Amazon  has a very grand business strategy to “ offer customers low prices, convenience, and a wide selection of merchandise “. Due to the lack of actual store front, the locations of warehouse facilities are strategically important to the company. Amazon makes a facility locations decision based on the distance to demand areas and tax implications. With 170 million items of physical products in the virtual stores, the back end of order processing and fulfillment is a bit complicated. Anyway, a simplified version of the order-to-cash process are illustrated as below,

Upon receipt of the orders, Amazon assign the orders to an appropriate DC with the lowest outbound logistics cost. In Amazon’s warehouse, there are 5 types of storage areas. Library Prime Storage is the area dedicated for book/magazine. Case Flow Prime Storage is for the products with a broken case and high demand. Pallet Prime Storage is for the products with a full case and high demand. Random Storage is for the smaller items with a moderate demand and Reserve Storage will be used for the low demand/irregular shaped products. Amazon uses an propitiatory warehouse management system to make the putaway decision and order picking decision. After the orders are picked and packed, Amazon ships the orders using common carriers so they can obtain the economy of scale. Orders will arrive at UPS facility near a delivery point and UPS will perform the last mile delivery to customers. Amazon is known to use Sales and Operations Planning (S&OP) to handle the sales forecast. Anyway, this must be S&OP process at product family/category level. To compete with other online retailers,  Zappos  pays much attention to the way they provide the services to customers. In stead of focusing on the call center productivity, Zappos encourages its staff to spend times over the phone with customers as long as they can so they can fully understand the customer’s requirements. They also upgrade the delivery from 3 days to 1 day delivery in order to exceed customer expectation.

All case study demonstrates that supply chain management is truly the strategic initiatives, not merely a cost cutting technique. Leading companies have a very strong customer focus because almost all of initiatives are something to fill the needs of customers. Relationship management is the unsung hero in supply chain management. It’s the prerequisite to the success of every supply chain. And at the end of the day, it comes down to the quality of supply chain people who analyze, improve and control supply chain operations. – See more at: http://www.supplychainopz.com/2014/04/supply-chain-management-case-study.html#sthash.MrnrGsyY.dpuf

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During the last decade, a cascading series of unpredictable events—including earthquakes, volcanic eruptions, catastrophic storms, disease outbreaks and armed conflicts—has exposed deep fragilities in global supply chains. These events served as initial alarm bells for much greater challenges to come.

Intricately woven supply chains were built on concepts such as just-in-time manufacturing and designed to reduce labor and operating costs. Over the years, companies relentlessly optimized their supply chains to serve markets with relatively predictable supply and demand patterns. However, recent and unprecedented events have shown how these choices have created inflexible supply chains that are brittle under stress.

Breaking a single link in a globalized supply chain can have a ripple effect, impacting customers thousands of miles away from the point of disruption. “Supply chain issues” has become a catchphrase for economic dislocation.

“In recent years, supply chain has gone from the background, something people did not think about, to a boardroom-level topic,” says Rob Cushman, Senior Partner, IBM Supply Chain Transformation. “It’s a concept that people have had very painful personal experiences with. And that’s why thinking about supply chain is pivoting from cost to being about resilience and agility, and ultimately driving growth.”

Cost savings

By deploying a cognitive supply chain, IBM reduced supply chain costs by USD 160 million   and built in more resilience and agility

100% order fulfillment 

Even during the peak of the covid-19 pandemic, IBM maintained a 100% order fulfillment rate of its products to clients

The worldwide reach, size and complexity of its supply chain organization represented a significant challenge as IBM began exploring transformation strategies for delivering a differentiated customer experience to promote customer loyalty and growth. IBM employs supply chain staff in 40 countries and makes hundreds of thousands of customer deliveries and service calls in over 170 nations. IBM also collaborates with hundreds of suppliers across its multi-tier global network to build highly configurable and customized products to customer specifications.

Previously, the IBM supply chain ran on legacy systems spread across different organizational silos, making information sharing slow and incomplete. Employees also performed much of their work on spreadsheets, which impeded collaboration and real-time data transparency.

However, at the same time the IBM supply chain was re-thinking business processes and transforming its technology platforms, IBM was making major strides in AI, cloud, data fabric, IoT, edge computing and other tools. “We saw the advances IBM was making in all these new technologies,” says Ron Castro, Vice President of IBM Supply Chain. “So, we asked, ‘Why not leverage our own technology to move our own supply chain forward?’”

“The principle behind why we embarked on this journey was to answer the question, ‘How can we best react to disruptions to manage resiliency and our client experience?’” says Castro. “We needed to identify disruptions quickly, analyze the data, get insights and decide on the best course of action.”

IBM supply chain management set out a bold vision to build its first cognitive supply chain. The aim was to have an agile supply chain that extensively uses data and AI to lower costs, exceed customer expectations, ruthlessly eliminate or automate non-value add work and exponentially improve the experience of supply chain colleagues.

IBM Consulting® was brought in at the beginning to help develop the processes required to drive the transformation. “We consider ourselves ‘Client Zero’ for IBM Consulting,” says Debbie Powell, IBM Digital Supply Chain Transformation Leader. “We have the technology to do what we need to do. It’s the culture and the processes where change was needed. We also realized that a lot of our knowledge was tribal and often depended on one person. We needed to digitize and democratize knowledge to support decision-making throughout the organization.”

IBM Consulting helped the IBM supply chain team use Design Thinking methods to plan its digital transformation and move from sequential to continuous planning. “We put a lot of effort into agility and a cultural shift to empower people and adjust workflows in a controlled way,” says Matthias Gräfe, Director of IBM Supply Chain Transformation. “We went from a top-down approach to identifying personas from the bottom up, the people that actually make the decisions.”

“Successful digital transformation required us to challenge traditional ways of working that were held sacred for decades and win the hearts and minds of supply chain colleagues for change to stick,” says Takshay Aggarwal, Partner, IBM Supply Chain Transformation.

At a high level, the IBM supply chain digital transformation revolves around building sense-and-respond capabilities. This was accomplished by democratizing data and automating and augmenting decisions achieved by combining cognitive control tower, cognitive advisor, demand-supply planning and risk-resilience solutions. “We view the cognitive control tower as the single source of truth where you have access to all the data and it helps advise the best course of action,” says Castro. “It also helps gather insights from the information quickly across the end-to-end supply chain.”

The cognitive control tower is powered by the  IBM® Cognitive Supply Chain Advisor 360  Solution, which runs on  IBM Hybrid Cloud  and on  Red Hat® OpenShift® on IBM Cloud  software. Cognitive Advisor 360 enables real-time, intelligent supply chain visibility and transparency. It also senses and responds to changes in demand as they happen and simplifies the automation of supplier management.

The system uses IBM Watson® technology to enable natural language queries and responses, which accelerates the speed of decision-making and offers more options to correct issues. “I can ask—in natural language—about part shortages, order impacts, risks to revenues and trade-offs,” says Cushman. “There’s a button that recommends actions to solve issues — that’s what Watson does. It’s augmented intelligence so we empower people with better information to make data-driven decisions very quickly.”

“With the cognitive supply chain, we have the benefit of bringing in all these data from legacy systems and internal and external sources, as well as unstructured data, to apply advanced analytics and different elements of AI,” says Castro. “And since the system responds to natural language, think about the power of being able to extract data and get insights and recommendations without having to be an expert in a legacy system or an ERP platform.”

The IBM cognitive supply chain technology architecture also includes  IBM Edge Application Manager ,  IBM Maximo® Visual Inspection  and  IBM Track and Trace IoT —an integrated stack of solutions that connect data end-to-end across the supply chain. “Our procurement, planning, manufacturing and logistics data are connecting in close to real time,” says Cushman. “That’s how we can share inbound information from suppliers, manufacturing status updates with our external manufacturing partners and delivery information with our customers.”

“We’ve added demand sensing, so that the solution pulses the market for changes in demand, predicting the future. We’ve also embedded a cloud-based risk management tool called Resilinc into our procurement and inbound parts management process,” says Cushman. “It essentially uses AI to crawl the web and if there is a disruption, we can take action quickly to secure a second supply source.”

On a minute-by-minute basis, one of the biggest advantages of IBM’s cognitive supply chain is that it provides employees with immediate access to the information they need to read and mitigate disruptions. “There is unbelievable power that comes from taking lots of disparate data and putting it where people can see and understand it,” says Cushman.

“The real-time, single-view of the truth increases the velocity of decisions and leverages rapid response,” says Castro. “It helps us develop ‘what-if’ scenario analysis from a planning perspective all the way through to the execution team and suppliers.”

In fast-moving, real-world situations, quick, informed decisions provide a competitive advantage. “In the past, a major disruption—such as the closing of a major airport—would take days for us to understand the immediate impacts. With our current solution, we have ‘what-if’ capability that brings this analysis down to minutes,” says Powell. “In a supply constrained environment, whoever gets the information first wins.”

Since its cognitive supply chain became operational, IBM has saved USD 160 million related to reduced inventory costs, optimized shipping costs, better decision-making and time savings. “When mitigating a part shortage, it used to take four to six hours per part number,” says Powell. “We’ve brought that down to minutes and made further improvements to seconds.”

“Where’s my stuff?” is a common question in the supply chain industry. Finding an answer can entail hours of phone calls, emails and ERP queries across different geographies. “We’ve built a solution where you can log in and enter an order and you’ll have an answer in about 17 seconds,” says Cushman. “That was an enormous pivot and a powerful change in how we do business.”

By using its cognitive supply chain platform, the IBM supply chain team is also able to create new capabilities much faster. “Years ago, when we started this journey, we needed a long, looping roadmap with one or two years required for major capability upgrades,” says Castro. “With this digital enterprise, we now have teams that complete deployments in two or three weeks. We’ve moved to much more agile development.”

Despite dislocations caused by the COVID-19 pandemic, IBM fulfilled 100% of its orders by using its cognitive supply chain to quickly re-source and re-route parts as necessary. “During the last two years, the IBM supply chain did not fall behind. We met our commitments. Everyone else was screaming supply chain issues and we’re shipping products,” says Daniel Thomas, IBM Business Optimization Manager and Chief of Staff. “We delivered on our promises during the height of the disruptive era we live in.”

“Guaranteed supply is important, but many of our clients are also looking for predictability of supply,” says Castro. “The tools we have now help us address both issues. They enable us to manage the demand side to meet the right client expectations.”

“We have a responsibility to inspire younger supply chain leaders who will keep the IBM supply chain at the cutting edge and beyond for years to come,” says Aggarwal. “People entering the work force today have different experiences than previous generations. They are digital natives and expect a consumer-grade experience when managing their work. As we embarked on our journey, we actively engaged them in designing workflows and digital capabilities. There were trials and tribulations and we had multiple failures in design and rollout. Architecting the cognitive supply chain, and learning from failures and successes, made our young leaders champions of the cognitive supply chain and constant innovators of new capabilities.”

“IBM is the only global services company with its own multibillion-dollar supply chain, and we’ve transformed it into a data-driven architecture to drive our business. There’s a richness of experience that we bring to client conversations because we’ve done this work for ourselves,” says Cushman. “It’s all about how a supply chain delivers a differentiated customer experience to enable stickiness and growth.”

“The collaboration between IBM Systems and IBM Consulting teams to transform our own business and demonstrate the power of exponential technologies in supply chain has been one of our finest moments as a company,” says Cushman. “We look forward to sharing our real-world experience and learnings with our worldwide community of customers, partners and clients.”

IBM is an information technology company based in Armonk, New York. Founded in 1911, the company offers hardware, software and services in cloud computing, AI, commerce, data and analytics, IoT, mobile and cybersecurity, as well as business resiliency, strategy and design solutions. IBM has a global workforce of more than 280,000 employees serving clients in over 175 countries through IBM Consulting, IBM Software and IBM Infrastructure.

To learn more about the IBM solutions featured in this story, please contact your IBM representative or IBM Business Partner.

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Walmart Supply Chain: Building a Successful Integrated Supply Chain for Sustainable Competitive Advantage

• Case Studies

Introduction

The global business landscape has witnessed an increasingly fierce competition, pushing companies to seek effective strategies to maintain and enhance their competitiveness. Among these strategies, the role of supply chain capability stands out as a key factor in driving success. A well-optimized supply chain not only ensures efficient delivery and cost-effectiveness but also provides companies with a competitive advantage in the market. In this context, Walmart, the world’s largest retailer, has demonstrated a highly successful and integrated Walmart supply chain, propelling its growth and dominance in the retail industry.

This case study aims to delve into the significance of supply chain capability for enhancing a company’s competitiveness and how it serves as a competitive advantage for companies. Additionally, we will explore the imperative need for supply chain redesign in the global economy to adapt to the challenges of the modern era of globalization. Focusing on Walmart’s exemplary supply chain practices, the purpose of this case study is to analyze the features of its successful integrated supply chain while identifying relevant issues in the context of the current globalized market.

[Read More: Rivian: Navigating Supply Chain and Operational Challenges and Embracing Growth ]

Walmart’s Supply Chain: Integrated Supply Chain Success

Data-driven success factors.

In the realm of modern supply chain management, data-driven strategies play a pivotal role in enhancing a company’s competitiveness. Walmart’s remarkable success as the world’s largest retailer can be attributed to its astute utilization of data analysis and advanced technologies within its integrated supply chain. This section delves into the key data-driven success factors that have propelled Walmart’s supply chain to the forefront of the retail industry.

[Read More: ERP Master Data: A Guide to Improve Quality & Governance ]

Role of Data Analysis through Barcode Scanning and Point-of-Sale Systems

Data analysis is at the core of Walmart’s supply chain prowess. The company has implemented sophisticated barcode scanning and point-of-sale systems to collect real-time data from its stores. By employing these technologies, Walmart gains valuable insights into customer buying behavior, sales trends, and inventory levels. The ability to analyze this data enables the retail giant to make informed decisions on product procurement, inventory management, and demand forecasting.

Efficient Supply Chain Practices: Automated Distribution Centers and Computerized Inventory Systems

Automation is a key component of Walmart’s efficient supply chain practices. The company has strategically invested in automated distribution centers, streamlining the flow of products from manufacturers to stores. These automated facilities not only optimize the handling and movement of goods but also enable faster order fulfillment and replenishment. Additionally, computerized inventory systems provide Walmart with accurate and up-to-date information about stock levels, allowing for precise inventory control and reducing the risk of stockouts or excess inventory.

Utilizing Walmart’s Own Trucking System and Cross-Docking Logistics

Another critical factor contributing to Walmart’s supply chain success is the utilization of its private trucking system and cross-docking logistics. By maintaining its own trucking fleet, Walmart gains greater control over transportation and delivery schedules, leading to improved efficiency and timely product replenishment. Furthermore, the adoption of cross-docking logistics techniques has enabled Walmart to minimize the need for intermediate storage, leading to reduced handling costs and faster product movement through the supply chain.

[Read More: The Ultimate Guide to Contract Logistics: What You Need to Know ]

Information Technologies Driving Efficiency

In Walmart’s journey towards becoming a global leader, information technologies have played a pivotal role in driving efficiency within the integrated Walmart supply chain. The retail giant has strategically adopted various IT initiatives to optimize its operations, enhance collaboration with suppliers, and achieve real-time inventory targeting. These technologies have contributed significantly to Walmart’s supply chain success, allowing them to maintain a competitive edge in the retail industry.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

One of the key information technologies that have bolstered Walmart’s supply chain efficiency is the implementation of Collaborative Planning, Forecasting, and Replenishment (CPFR). This system facilitates seamless communication and coordination between Walmart and its supply chain partners, including suppliers and distributors. By sharing real-time sales data and demand information, CPFR enables accurate forecasting and demand planning, minimizing information distortion, and promoting synchronized inventory replenishment. The CPFR program has been instrumental in enhancing overall supply chain visibility and efficiency, allowing Walmart to respond promptly to fluctuations in demand and supply, reducing stockouts, and optimizing inventory levels.

Vendor-Managed Inventory (VMI) and Its Benefits

Walmart’s adoption of Vendor-Managed Inventory (VMI) has been another critical information technology-driven initiative. Through VMI, Walmart empowers its suppliers to take on the responsibility of managing their inventory stored in Walmart’s warehouses. By granting suppliers access to real-time inventory data and sales information, Walmart facilitates efficient inventory tracking and replenishment. This hands-on approach by suppliers results in streamlined inventory management, reduced delays in replenishment, and lower stockouts. The VMI model has proved particularly advantageous for Walmart due to its vast product range and numerous suppliers, making inventory management complex and costly if managed solely by the retailer.

[Read More: Vendor Managed Inventory: A Comprehensive Guide ]

Leveraging RFID Technology for Real-Time Inventory Targeting

RFID (Radio Frequency Identification) technology has been a game-changer in Walmart’s pursuit of real-time inventory targeting and enhanced supply chain visibility. By employing RFID tags on products, Walmart can track the movement of inventory throughout the supply chain in real-time. RFID enables accurate and automated inventory tracking, reducing the need for manual counting and minimizing errors in inventory management. The technology also provides crucial details, such as production time, location, and expiry dates of goods, allowing for efficient inventory targeting and better control over inventory turnover. RFID technology has been instrumental in Walmart’s cost reduction efforts, ensuring optimal stock levels while avoiding overstocking and unnecessary inventory holding costs.

Achieving Competitive Advantage through Strategy

Walmart’s competitive strategy: “everyday low prices” (edlp).

Walmart’s competitive advantage is deeply rooted in its strategic focus on offering “Everyday Low Prices” (EDLP) to its customers. The EDLP strategy revolves around providing high-quality products and services at the lowest possible prices, ensuring that customers can benefit from affordable prices every day. This approach sets Walmart apart from its competitors and has been instrumental in establishing the company as a dominant force in the retail industry.

Implementing the “Everyday Low Costs” (EDLC) Policy through Direct Procurement

To support its EDLP strategy, Walmart follows an “Everyday Low Costs” (EDLC) policy in its supply chain management. One of the key elements of the EDLC policy is the direct procurement of items from suppliers, eliminating intermediaries in the process. By procuring directly from manufacturers, Walmart can negotiate and understand their cost structure, enabling them to make informed purchasing decisions and obtain the best prices for their products.

Walmart’s emphasis on direct procurement is further bolstered by the use of technology and information systems. The company has implemented a central database, store-level point-of-sale systems, and a satellite network, along with barcodes and RFID technology as previously mentioned. These technologies allow Walmart to gather and analyze real-time store-level information, including sales data and external factors like weather forecasts, to enhance the accuracy of purchasing predictions. This integration of information technology helps Walmart optimize its procurement process and maintain low costs throughout the supply chain.

Utilizing Information Systems for Better Inventory Management

Effective inventory management is critical for Walmart to sustain its competitive advantage through the EDLP strategy. The company relies on information systems and information technology (IT) capabilities to control inventory levels efficiently. By capturing customers’ demand information, Walmart can identify popular products and stock them adequately, leading to an overall reduction in inventory.

One notable example of Walmart’s successful utilization of information systems is its collaboration with Procter & Gamble (P&G) through the Collaborative Planning, Forecasting, and Replenishment (CPFR) program. This program links all computers of P&G to Walmart’s stores and warehouses, allowing for efficient replenishment orders based on real-time inventory needs. Additionally, Walmart’s Retail Link , developed in the early 1990s, serves as another vital IT application for storing data, sharing it with vendors, and aiding in shipment routing assignments.

Challenges and Opportunities

Supplier cooperation and collaboration.

Walmart’s supply chain success can be attributed to its strong relationships with suppliers, but achieving and maintaining supplier cooperation and collaboration is not without challenges. Let’s explore the challenges and opportunities in this area:

Challenges in Obtaining Suppliers’ Cooperation

• Supplier Resistance to Direct Procurement: Walmart follows an “Everyday Low Costs” (EDLC) policy by directly procuring items from suppliers, eliminating intermediaries. However, some suppliers may be reluctant to cooperate with this approach as it can disrupt existing distribution channels and potentially reduce their bargaining power.
• Complex Supplier Networks: With thousands of suppliers across various product categories, managing diverse supplier networks can be challenging. Each supplier may have different production and delivery schedules, making coordination difficult.
• Balancing Profit Margins: As Walmart emphasizes low prices, maintaining a balance between cost savings and ensuring suppliers’ profitability can be a delicate task. Suppliers may resist pressure to reduce prices further to maintain their margins.

Opportunities for Enhanced Supplier Cooperation and Collaboration

• Establishing Transparent Communication Channels: Walmart can create transparent and open communication channels with its suppliers to foster better cooperation. Clear communication regarding demand forecasts, inventory levels, and potential disruptions can help suppliers plan their production and deliveries more efficiently.
• Supplier Incentive Programs: Introducing incentive programs that reward suppliers for meeting certain performance metrics, such as on-time delivery or cost reduction, can motivate suppliers to actively collaborate and improve their supply chain capabilities.
• Collaborative Planning, Forecasting, and Replenishment (CPFR): Walmart can leverage technology, such as CPFR, to share real-time sales data and demand forecasts with its suppliers. This collaborative approach allows suppliers to align their production and inventory management with actual market demand, reducing the bullwhip effect and optimizing the supply chain.
• Sharing Inventory Visibility: Providing suppliers with access to inventory data, including stock levels and sales information, can help them plan production and deliveries more effectively. This visibility can prevent stockouts and overstocking issues.
• Long-term Partnerships: Building long-term strategic partnerships with key suppliers can create a sense of mutual commitment and trust. By assuring consistent business over an extended period, Walmart can foster stronger relationships and supplier loyalty.

[Read More: 3 Types of Supplier Segmentation Matrix You Can Use to Classify Suppliers ]

Importance of Collaboration to Enhance Supply Chain Efficiency

• Reducing Lead Times: Effective collaboration with suppliers can help shorten lead times by streamlining production and transportation processes. Faster lead times enables Walmart to respond quickly to changes in demand, reducing the risk of stockouts.
• Efficient Inventory Management: Collaborative efforts with suppliers enable better inventory planning and management. Suppliers can adjust production based on actual demand, reducing excess inventory and associated costs.
• Supply Chain Flexibility: Collaboration fosters agility and adaptability in the supply chain. When Walmart and its suppliers work together closely, they can quickly adjust to market changes, supply disruptions, or new opportunities.
• Cost Reduction: Improved supplier collaboration can lead to cost-saving opportunities. By eliminating unnecessary intermediaries and optimizing production and transportation, overall supply chain costs can be minimized.

The Incentives Alignment Issue

In any supply chain, maintaining a balance of profit margins among different parties is essential for efficient collaboration and sustained success. However, achieving incentives alignment can be challenging, and this issue is particularly relevant in the case of Walmart supply chain. Addressing misalignment of interests between Walmart and its suppliers is crucial for optimizing the overall performance of the supply chain and ensuring long-term success. The following points highlight the incentives alignment issue faced by Walmart:

1. Balancing Profit Margins Among Different Supply Chain Parties:

Walmart’s success is attributed to its ability to offer high-quality products and services at the lowest affordable prices. To achieve this, Walmart employs various cost-cutting strategies, such as direct procurement from suppliers and streamlined distribution practices. While these strategies help Walmart maintain competitive prices, they can create challenges for suppliers who may face pressure to lower their own profit margins to meet Walmart’s demands. This misalignment of profit margins can lead to strained relationships and potentially impact the overall efficiency of the supply chain.

2. Misalignment of Interests Between Walmart and Suppliers:

Walmart’s size and market dominance can lead to power imbalances in supplier relationships. Suppliers may feel compelled to comply with Walmart’s demands to maintain access to its large customer base. However, this can lead to situations where suppliers may not have enough leverage to negotiate favorable terms, impacting their own profitability. As a result, suppliers may be less inclined to invest in innovations or improvements that would benefit the supply chain as a whole.

3. Conflict Between Inventory Growth and Sales Growth:

Walmart faced inventory growth issues in the past, with the inventory growth rate outpacing the sales growth rate. This can be indicative of conflicting incentives between Walmart and its suppliers. Suppliers may prioritize producing and delivering more inventory to ensure they meet Walmart’s demands, even if the sales growth does not keep up with the increased inventory. This misalignment can lead to excess inventory, increased carrying costs, and potential stockouts.

4. The Need for a New Triple-A Supply Chain:

Addressing the incentives alignment issue requires a fundamental shift in the supply chain strategy. Lee (2004) proposed the concept of a new Triple-A supply chain for Walmart and other companies in the 21st century. The Triple-A supply chain emphasizes agility, adaptability, and alignment to create a sustainable competitive advantage. Achieving alignment among all participating parties is crucial to optimize supply chain performance and ensure that risks and rewards are distributed fairly.

The Triple-A Supply Chain Approach

In today’s competitive business landscape, companies like Walmart recognize that a successful supply chain is not just about having a fast and cost-effective system. To maintain a sustainable competitive advantage and address the challenges of the global economy, it is essential to redesign supply chains that incorporate agility, adaptability, and alignment. This section explores the concept of the Triple-A Supply Chain Approach, which emphasizes these three key qualities that an ideal supply chain should possess: agility, adaptability, and alignment of interests among all participating parties.

The Three Qualities of an Ideal Supply Chain

Agility for quick and cost-effective responses:.

Agility refers to a supply chain’s ability to respond quickly and cost-effectively to sudden changes in demand, supply, and external disruptions. In the fast-paced business environment, companies must be able to adapt swiftly to fluctuations in customer preferences, market conditions, and unforeseen events. For Walmart, agility has been a critical factor in maintaining its leadership position in the retail industry. The company’s investments in technology and supply chain optimization strategies have allowed them to optimize inventory levels and respond rapidly to changing customer demands, ensuring the availability of products while minimizing inventory costs.

Adaptability to Handle Changes in Demand and Supply:

Supply chains should be adaptable and flexible enough to handle variations in demand and supply patterns. Demand forecasts can be uncertain, and unexpected supply chain disruptions may occur, making adaptability a vital quality. Walmart’s focus on omnichannel and various fulfillment options, such as in-store pickup and ship from store, demonstrates their commitment to adaptability. By utilizing multiple channels, Walmart can cater to diverse customer preferences, ensuring an uninterrupted flow of products to meet demand.

Alignment of Interests among All Participating Parties:

One of the significant challenges in supply chain management is ensuring alignment of interests among all parties involved, including suppliers, manufacturers, distributors, and retailers. Walmart’s scale and dominance in the retail market have allowed them to establish strong relationships with vendors, enabling strategic partnerships with vendors who can meet their high-volume demands. Additionally, Walmart’s adoption of Vendor Managed Inventory (VMI) allows suppliers to manage their own inventory stored in Walmart’s warehouses. This collaboration aligns the incentives of suppliers and Walmart, streamlining inventory management and ensuring timely replenishment.

In conclusion, Walmart’s integrated supply chain has been a crucial factor in the company’s global dominance and sustained competitive advantage. By strategically investing in technology and optimizing its supply chain, Walmart has managed to maintain its position as the world’s largest retailer with over $572 billion in revenue in 2022.

Walmart’s success serves as a compelling example of the importance of a well-integrated supply chain in achieving and sustaining competitive advantage in the global market. As businesses continue to navigate the complexities of the 21st-century economy, building and enhancing supply chain capabilities will remain a critical aspect of ensuring sustainable growth and profitability. By prioritizing agility, adaptability, and alignment, companies can follow in Walmart’s footsteps and position themselves for continued success in the dynamic and ever-evolving global marketplace.

References:

• Lee H.L. (2004): The triple A supply chain. “Harvard Business Review”, Vol. 82, No. 10, pp. 102-112. 
• Nguyen T.T.H. (2017): Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. “Journal of Economics and Management”, Vol. 29(3), pp. 102-117

About the Author – Dr. Muddassir Ahmed

Dr. Muddassir Ahmed is the Founder & CEO of SCMDOJO. He is a global speaker , vlogger , and supply chain industry expert with 19 years of experience in the Manufacturing Industry in the UK, Europe, the Middle East, and South East Asia in various Supply Chain leadership roles. Dr. Muddassir has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and has founded the leading supply chain platform SCMDOJO to enable supply chain professionals and supply chain teams to thrive by providing best-in-class knowledge content, tools, and access to experts. You can follow him on  LinkedIn ,  Facebook ,  Twitter  or  Instagram.

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7 mini case studies: successful supply chain cost-reduction and management

Rob O'Byrne

Group Managing Director - Logistics Bureau

If you were to tell me that your company had never looked at its supply chain costs and sought to deliver reductions, I would be mightily surprised. On the other hand, if you told me your company hasn’t been able to sustain any progress in supply chain cost reduction, I wouldn’t be surprised at all.

Most companies begin with the best intentions to achieve successful and sustainable supply chain cost management, but somehow seem to lose momentum, only to see costs increase again in short order.

The following seven mini case studies explore a few high-profile companies that have managed to sustain their supply chain cost-reduction efforts and keep expenses under control. The challenges faced by these organisations and the steps they took, may provide some inspiration for successful long-term cost management within your organisation.

1. Deere & Company

Deere & Company (brand name John Deere) is famed for the manufacture and supply of machinery used in agriculture, construction, and forestry, as well as diesel engines and lawn care equipment. In 2014, Deere & Company was listed 80th in the Fortune 500 America’s ranking and was 307th in the 2013 Fortune Global 500 ranking.

Supply Chain Cost Reduction Challenges:  Deere and Company has a diverse product range, which includes a mix of heavy machinery for the consumer market, and industrial equipment, which is made to order. Retail activity is extremely seasonal, with the majority of sales occurring between March and July.

The company was replenishing dealers’ inventory weekly, using direct shipment and cross-docking operations from source warehouses located near Deere & Company’s manufacturing facilities. This operation was proving too costly and too slow, so the company launched an initiative to achieve a 10% supply chain cost reduction within four years.

The Path to Cost Reduction:  The company undertook a  supply chain network-redesign  program, resulting in the commissioning of intermediate “merge centers” and optimization of cross-dock terminal locations.

Deere & Company also began consolidating shipments and using break-bulk terminals during the seasonal peak. The company also increased its use of third-party logistics providers and effectively created a network that could be optimized tactically at any given point in time.

Supply Chain Cost Management Results:  Deere & Company’s supply chain cost-management achievements included an inventory decrease of $1 billion, a significant reduction in customer delivery lead times (from ten days to five or less) and annual transportation cost savings of around 5%.

One of the world’s largest manufacturers of computer chips, Intel needs little introduction. However, the company needed to reduce supply chain expenditure significantly after bringing its low-cost “Atom” chip to market. Supply chain costs of around $5.50 per chip were bearable for units selling for $100, but the price of the new chip was a fraction of that, at about $20.

The Supply Chain Cost Reduction Challenge:  Somehow, Intel had to reduce the supply chain costs for the Atom chip, but had only one area of leverage—inventory.

The chip had to work, so Intel could make no service trade-offs. With each Atom product being a single component, there was also no way to reduce duty payments. Intel had already whittled packaging down to a minimum, and with a high value-to-weight ratio, the chips’ distribution costs could not be pared down any further.

The only option was to try to reduce levels of inventory, which, up to that point, had been kept very high to support a nine-week order cycle. The only way Intel could find to make supply chain cost reductions was to bring this cycle time down and therefore reduce inventory.

The Path to Cost Reduction:  Intel decided to try what was considered an unlikely supply chain strategy for the semiconductor industry:  make to order . The company began with a pilot operation using a manufacturer in Malaysia. Through a process of iteration, they gradually sought out and eliminated supply chain inefficiencies to reduce order cycle time incrementally. Further improvement initiatives included:

• Cutting the chip assembly test window from a five-day schedule, to a bi-weekly, 2-day-long process
• Introducing a formal S&OP planning process
• Moving to a vendor-managed inventory model wherever it was possible to do so

Supply Chain Cost Management Results:  Through its incremental approach to cycle time improvement, Intel eventually drove the order cycle time for the Atom chip down from nine weeks to just two. As a result, the company achieved a supply chain cost reduction of more than $4 per unit for the $20 Atom chip—a far more palatable rate than the original figure of $5.50.

3. Starbucks

Like Intel, Starbucks is pretty much a household name, but like many of the most successful worldwide brands, the coffee-shop giant has been through its periods of supply chain pain. In fact, during 2007 and 2008, Starbucks leadership began to have severe doubts about the company’s ability to supply its 16,700 outlets. As in most commercial sectors at that time, sales were falling. At the same time, though, supply chain costs rose by more than $75 million.

Supply Chain Cost Reduction Challenges:  When the supply chain executive team began investigating the rising costs and supply chain performance issues, they found that service was indeed falling short of expectations. Findings included the following problems

• Fewer than 50% of outlet deliveries were arriving on time
• Several poor outsourcing decisions had led to excessive 3PL expenses
• The supply chain had, (like those of many global organisations) evolved, rather than grown by design, and had hence become unnecessarily complex

The Path to Cost Reduction:  Starbucks’ leadership had three main objectives in mind to achieve improved performance and supply chain cost reduction. These were to:

• Reorganize the supply chain
• Reduce cost to serve
• Lay the groundwork for future capability in the supply chain

To meet these objectives, Starbucks divided all its supply chain functions into three main groups, known as “plan” “make” and “deliver”. It also opened a new production facility, bringing the total number of U.S. plants to four.

Next, the company set about terminating partnerships with all but its  most effective 3PLs . It then began managing the remaining partners via a weekly scorecard system, aligned with renewed service level agreements.

Supply Chain Cost Management Results:  By the time Starbucks had completed its transformation program, it had saved more than $500 million over the course of 2009 and 2010, of which a large proportion came out of the supply chain, according to Peter Gibbons, then Executive Vice President of Global Supply Chain Operations.

Like Deere & Company, AGCO is a leading global force in the manufacture and supply of agricultural machinery. The company grew substantially over the course of two decades, achieving a considerable portion of that growth by way of acquisitions.

As commonly happens when enterprises grow in this way, AGCO experienced increasing degrees of supply chain complexity, along with associated increases in cost, but for many years, did little to address the issue directly, primarily due to the decentralized and fragmented nature of its global network.

In 2012, AGCO’s leaders recognised that this state of affairs could not continue and decided to establish a long-term program of strategic optimisation.

Supply Chain Cost Reduction Challenges:  With five separate brands under its umbrella, AGCO’s product portfolio is vast. At the point when optimisation planning began, sourcing and inbound logistics were managed by teams in various countries, each with different levels of SCM maturity, and using different tools and systems.

As a result of the decentralised environment, in which inbound logistics and transport management were separate operational fields, there was insufficient transparency in the supply chain. The enterprise as a whole was not taking advantage of synergies and economies of scale (and the benefits of the same). These issues existed against a backdrop of a volatile, seasonal market.

The Path to Cost Reduction:  Following a SCOR supply chain benchmarking exercise, AGCO decided to approach its cost reduction and efficiency goals by blending new technology—in the form of a globally integrated transport management system (TMS)—with a commitment to form a partnership with a suitably capable 3PL provider.

As North and South American divisions of the company were already working with a recently implemented TMS, leaders decided to introduce the blended approach in Europe, with commitments to replicate the model, if successful, in its other operating regions.

With the technology and partnership in place, a logistics control tower was developed, which integrates and coordinates all daily inbound supply activities within Europe, from the negotiation of carrier freight rates, through inbound shipment scheduling and transport plan optimisation to self-billing for carrier payment.

Supply Chain Cost Management Results:  Within a year and a half of their European logistics solution’s go-live, AGCO achieved freight cost reductions of some 18%, and has continued to save between three and five percent on freight expenditure, year-on-year, ever since. Having since rolled the new operating model out in China and North America, the company has reduced inbound logistics costs by 28%, increased network performance by 25% and cut inventory levels by a quarter.

Headquartered in Westport Connecticut, Terex Corporation may not be such a well-known name, but if your company has ever rented an aerial working platform (a scissor-lift or similar), there is a good chance it was manufactured by Terex and dispatched to the rental company from its transfer center in North Bend, Washington.

The North Bend facility is always full of lifting equipment. The company makes most pieces to order and customizes them to meet customers’ unique preferences. Terex maintained a manual system for yard management at the transfer centre, which generated excessive costs for what should have been a relatively simple process of locating customers’ units to prepare them for delivery.

The Supply Chain Cost Reduction Challenge:  A wallboard and sticker system was a low-tech solution for identifying equipment items in the yard at Terex. While inexpensive in itself, the solution cost around six minutes every time an employee had to locate a unit in the yard. It also required a considerable number of hours to be spent each month taking physical inventories and updating the company’s ERP platform.

The Path to Cost Reduction:  Terex decided to replace the outdated manual yard management process with a new, digital solution using RFID tracking. Terex decided to replace the outdated manual yard management process with a new, digital solution using RFID tracking. Decision-makers chose a yard management software (YMS) product, and then had the transfer centre surveyed before initiating a pilot project covering a small portion of the yard.

After a successful pilot, the company approved the solution for full-scale implementation, replacing stickers, yard maps, and wallboard with electronic tracking and digital inventory management. As of December 2017, Terex was planning to integrate the yard management solution with its ERP platform to enable even greater functionality.

Supply Chain Cost Management Results:  While the YMS cannot reconcile inventory automatically with the Terex ERP application, it does at least provide a daily inventory count via its business intelligence module. That alone has saved the labour costs previously incurred in carrying out manual counts.

More importantly, though, the RFID-based unit identification and location processes have saved the company around 70 weeks per year in labour costs, by cutting the process-time down from six minutes, to a mere 30 seconds per unit.

Avaya is a global force in business collaboration and communications technology, and not so many years ago, was operating what, by its own executives’ admission, was a worst-in-class supply chain. That situation arose as the result of multiple corporate acquisitions over a short space of time. The company was suffering from a range of supply chain maladies, including a long cash-to-cash cycle, an imbalance in supplier terms and conditions, excess inventory, and supply chain processes that were inefficient and wholly manual.

The Supply Chain Cost Reduction Challenge:  After Avaya purchased Nortel Enterprise Solutions in 2009, the freshly merged company found itself but loosely in control of an unstable and ineffective supply chain operation. Aside from having too many disparate and redundant processes, the company had multiple IT solutions, none of which provided a holistic view of the supply chain or supported focused analysis.

The Path to Cost Reduction:  Avaya’s senior management team realized that its technology solutions, which varied from being inadequate to inappropriate, were causing many of its problems. The various acquisitions and mergers had transformed Avaya into a different kind of enterprise, and what it needed, rather than a replacement for all the discrete systems, was one solution to tie them all together.

To that end, the company put its trust in cloud technology, which was relatively immature at the time, and migrated all processes onto one platform, which was designed to automate non-value-added activities and integrate those critical to proactive supply chain management, namely:

• Point of sale analysis
• Procurement analysis
• Supplier communication
• Supply and demand planning
• Inventory planning
• Inbound and outbound logistics planning

Of course, the technology was merely an enabler, and to transform its supply chain operation, Avaya embarked on a long-term, phased program to standardize processes, initiate a culture change, invest in top talent, and implement a system of rigorous  benchmarking and KPI tracking .

Supply Chain Cost Management Results:  Avaya’s program of transformation took place over a period of three to four years, between 2010 and 2014. The path to cost reduction was a long one, but ultimately successful.

By making a conscious effort to lead the enterprise into a new way of thinking, change business culture, and unify technology under a single platform, Avaya has improved inventory turns by more than 200%, reduced cash tied-up in stock by 94%, and cut its overall supply chain expenditure in half.

This dramatic turnaround also required the company to switch from a preoccupation with improving what it was doing, to a process of  questioning  what it was doing and why.

7. Sunsweet Growers

This final mini-case study in our collection, highlights how sometimes, excess supply chain costs are not about warehousing and transportation, but can be attributable to inefficiencies in manufacturing or production and—often at the root of it all—forecasting and planning.

Sunsweet Growers is the world’s biggest producer of dried fruits and a little over a decade ago, found that while it was managing distribution operations well, high production costs were inflating end-to-end supply chain expenditure.

The Supply Chain Cost Reduction Challenge:  When the leadership at Sunsweet looked into the company’s production cost issues, recognition soon dawned that the distribution network was at least partly behind the problems. As a result, the company looked at how it could redesign the network to take out some of the production costs.

Later, it became apparent that although a redesign would yield some benefits, one of the most significant issues was in the approach to demand forecasting. Sunsweet was using a manual forecasting approach, with spreadsheets being the only technology involved.

The inefficiencies of this approach proved not only to hamper effective forecasting and production planning, but the knock-effect was an excess of warehouses in the network—so forecasting proved to be both a driver of production cost, and a key to improving the distribution network.

The Path to Cost Reduction:  As in a number of the studies we’ve explored here, technology played a large part in solving Sunsweet’s problems. After evaluating some 30 different software solutions, the company finally settled on a supply chain planning suite, and planned its improvement program to make use of each of the solution’s modules in sequence, allowing ROI to be realized in phases as each module was implemented and leveraged.

At the same time, Sunsweet implemented a sales and operations planning program  (S&OP)  that once established, enabled plant resource requirements to be anticipated months—rather than weeks—in advance. As the overall improvement plan passed through its five phases, positive results accumulated and as hoped, software ROI reached 100% even before the company completed its full implementation.

Supply Chain Cost Management Results:  Of course, the objective of Sunsweet’s improvement program was not merely to achieve a 100% return on investment in its supply chain planning platform. The aim was to reduce production costs, and although the company hasn’t published hard figures to quantify the total financial gain, it has claimed the following wins:

• A 15 to 20% increase in forecasting accuracy
• A reduction in overtime from 25% to 8% in production facilities
• A 30% reduction in finished-goods spoilage
• Number of warehouses in the United States cut from 28 to just eight
• A transportation cost-per-unit that remained static for two years despite increased utilization of costly refrigerated transport and rising fuel costs

From the achievements documented above, and highlighted in several industry publications and articles, you don’t need to be too much of a mathematician to deduce that cost savings would have been considerable.

Making Supply Chain Cost Reductions Stick

Of course, the above case studies are merely summaries of the changes these high-profile brands made to their supply chains. What can be seen from these brief accounts, though, is that for an enterprise to make significant and sustainable cost improvements, substantial change must take place.

• Deere & Company had to overhaul its network completely.
• Intel had to shift an entire supply chain to a new and previously unheard of strategy in its sector.
• Starbucks had to shake up its third-party relationships and increase production capacity.
• AGCO had to invest in technology and collaborative partnerships with external service providers.
• Terex had to implement costly (but effective) RFID tracking capabilities.
• Sunsweet Growers needed a best-of-breed software solution, and an S&OP program to improve forecasting and planning.
• Avaya needed to change company culture, implement cloud technology, rethink processes completely, and invest in the best supply chain talent it could find.

At the same time, none of the changes took place overnight. Each of the companies tackled issues in phases, effectively learning more as they went along.

You Won’t Find Savings in the Comfort Zone

When it comes to making supply chain cost reductions that stick, you should explore every avenue. However, at the root of high costs, there will usually be one major factor requiring innovation, whether it’s the network, inventory strategy, the working relationships with supply chain partners, or some other element of your operation.

Seldom do companies make decent savings by whittling away piecemeal at what seem, on the face of it, to be the most pressing issues of the day (such as direct transportation costs or supplier pricing).

If you want to see sustainable cost reductions, your company will need to view the big picture from a new angle or two, and be prepared to step outside of the comfort zone to which it will have become accustomed.

Rob O’Byrne  is a supply chain consultant, coach and author with 40+ years experience in Supply Chain management. He is the expert making the blog called  Logistics Bureau .

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Supply Chain Management Design & Simulation Online

Supply Chain Case Studies

SCM Globe comes with a library of case studies that explore COMMERCIAL , HUMANITARIAN , and MILITARY supply chains. When you purchase an account you have access to all the case studies and their simulations.

The case studies range from relatively simple beginning cases like Cincinnati Seasonings , to quite challenging advanced cases such as Zara Clothing Company , or Nepal Earthquake Disaster Response .  Case studies are laboratories where you apply what you learn in lectures and readings to solve supply chain problems in highly realistic simulations. Each case has a " CASE STUDY CONCEPT " showing the supply chain principles and practices highlighted in that case.

SEE WHAT PEOPLE ARE SAYING ABOUT SCM GLOBE

Case studies presently available in the online library are shown below. You are welcome to use any or all of them. You can also create your own case studies, or we can create them for you. Cases are shown in the three categories. As you work with these cases you will gain an intuitive understanding of supply chain dynamics, and develop the analytical skills for designing and managing real supply chains.

People new to SCM Globe should start with the  Cincinnati Seasonings case study . Work individually at first, not in groups. Each person needs their own account. Do the three challenges shown in the online introduction to Cincinnati Seasonings. That's how you'll learn to use the software, and how to use simulations to analyze and design supply chains. Then you will be ready to work in groups or work on more advanced cases.  Click on the case studies below to see a description and introduction to each case.

Commercial Supply Chain Case Studies

Collaborative Supply Chains

S&J Trading Company – Angola

Java Furniture Company – Indonesia

Cincinnati Seasonings

Supply Chains of the Roman Empire

Ancient Silk Road – First Global Supply Chain

Zara Clothing Company Supply Chain

Fantastic Corporation – Global Supply Chain

Fantastic Corporation – Unexpected Disruptions

Humanitarian supply chain case studies.

Disaster Response Supply Chains: Flooding Scenario

Nepal Earthquake Disaster Response Supply Chain

Humanitarian Supply Chains: Syria Evacuation Scenario (CIV and MIL)

Military supply chain case studies.

Burma Campaign – 1944 Invasion of India

Battle of Smolensk – 1941 Invasion of Russia

Alexander the Great Needed Great Supply Chains

New case studies.

New cases are added based on projects we do with instructors, students, and supply chain professionals. Here are the new supply chain models in the library:

• Local and Sustainable Supply Chains – Blue Ocean Cooperative
• Aerospace Manufacturing Cluster – Rockford IL
• Hyderabadi Biryani – Paramount Restaurant 
• Western Desert War – May 1941
• Russian Logistics for the Invasion of Ukraine

Interactive Supply Chain Case Studies

Every case study has a main theme or concept that it illustrates. You will be challenged to use knowledge acquired in lectures and readings as well as your own real-world experience to expand and re-design the supply chains in these case studies.

In the commercial supply chain cases you need to improve and expand the supply chains to support new stores and still keep operating costs and inventory as low as possible. In cases that deal with humanitarian or military missions you need to create supply chains to deliver the right supplies to the right locations when they are needed, and do so at a reasonable cost.

We are glad to provide a  free evaluation account  to instructors, students and supply chain professionals interested in exploring SCM Globe simulations — click here to request an account —  Get Your Free Trial Demo  

See SCM Globe pricing for Academic and Business versions of the software.

The best case to start with is Cincinnati Seasonings . After working through the three challenges presented in the online introduction to this case you will be ready to handle further challenges in this case or move on to more advanced cases. Get a quick introduction to working with case studies in “ Working with Case Studies “.

As problems are found in the simulations, you make decisions about how to fix them. Make changes to your supply chain model in the Edit screen. Then go to the Simulate screen and run a simulation to see the results of your changes. Depending on the changes you make, your supply chain simulation runs for additional days and other problems arise. As you address these problems you see about how supply chains work. Apply what you learn in readings and and lectures plus your work experience to solve the problems you encounter.

Keep improving your supply chain model until you get the simulation to run for 30+ days. Then download your simulation results and create a monthly Profit & Loss Report plus KPIs (as shown below). This provides an objective basis for evaluating the merits of different supply chain solutions.

Monthly Profit & Loss Reports identify areas for improvement. They help you improve your supply chain to keep it running for 30 days and also lower operating costs and inventory levels. You can work on lowering the carbon footprint of your supply chain too. These are the challenges you address in SCM Globe, and they are the same challenges people face when managing real supply chains. What works well in the simulations will also work well with actual supply chains. Skills you develop in working with the simulations are directly transferable to the real world.

NOTE: You can run simulations for longer than 30 – 60 days, but there is usually no reason to do so. This is because most companies do not run their supply chains unchanged for longer than 30 days at a time. They use a 30 day S&OP ( sales and operations planning ) cycle and these simulations correspond to that monthly S&OP cycle. These simulations focus on the tactical realities of operating a supply chain from one month to the next, and finding what works best.

Accessing the Online Library of Case Studies

As shown in the screenshots below, logon to your account and access the case study library from your Account Management screen. Click on the “View Library” button (arrow 1) in upper right corner of the Account Management screen. In the Library screen you see a list of available supply chain case studies; click “ Import ” to load a selected case study into your account; give the imported case a Name , and click “ My Account ” to go back to your Account Management screen.

You are welcome to import any or as many of the supply chain models in the library as you wish. Once you have a copy of a supply chain model in your own account you can make any changes you want to it.

In Account Management, you “ Create a New Supply Chain ” or work with an existing supply chain by clicking the “ Edit ” button (arrow 2) next to the existing supply chain you want to work on. You can also upload copies of supply chain models sent to you by other SCM Globe users (arrow 3) , and check your account expiration date (arrow 4) .

Use the Default Values or Enter New Data

When you load any of the case study supply chain models from the SCM Globe library, they come with default numbers already plugged in. You can either accept the defaults or do some research to find more current data. This data (like data and prices everywhere) changes all the time.

Look for data on products, facilities and vehicles that are used in your supply chain and see what their specifications and costs are. Costs can vary widely in different parts of the world. Go to websites of commercial real estate brokers in cities of interest and see what you can find out about rent costs:

• for cities in North America start with www.cityfeet.com
• and for cities in other parts of the world start with  www.knightfrank.com

Metric System of Weights and Measures

In the case studies all weights, volumes, distances and speeds are expressed using the metric system. The metric system is used around the world in every country except three: Liberia; Myanmar; and the United States. So it is good for supply chain professionals to feel comfortable with the metric system.

Register on SCM Globe for Access to all Supply Chain Simulations

Click the blue "Register" button on the app login page, and buy an account with a credit card or PayPal (unless you already have one). Then scan the "Getting Started" section, and you are ready to start. Go to the SCM Globe library and click "Import" next to the supply chain models you want.

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How Cisco Transformed Its Supply Chain

Available languages, download options.

• PDF (310.7 KB) View with Adobe Reader on a variety of devices

Bias-Free Language

The documentation set for this product strives to use bias-free language. For the purposes of this documentation set, bias-free is defined as language that does not imply discrimination based on age, disability, gender, racial identity, ethnic identity, sexual orientation, socioeconomic status, and intersectionality. Exceptions may be present in the documentation due to language that is hardcoded in the user interfaces of the product software, language used based on RFP documentation, or language that is used by a referenced third-party product. Learn more about how Cisco is using Inclusive Language.

Single global ERP instance, new business models, standardization, and automation throughout supply chain boost Cisco agility, resiliency, and ability to scale.

The Cisco supply chain is highly diverse, extensive, and global. With more than 300 product families, Cisco® has a wide range of gear targeted at a spectrum of customers with vastly different expectations and fulfillment requirements.

Most Cisco products use a configure-to-order (CTO) production model. Products are built based on confirmed customer orders. A large percentage of Cisco growth comes through acquisitions, and they bring their own supply chain requirements and processes that need to be integrated into Cisco core operations.

A notable exception was the Cisco acquisition of Scientific Atlanta in 2005, presently rolled under the Service Provider Video Technology Group. Scientific Atlanta set top boxes and modems are fixed-configuration products that have a cost structure and sourcing strategy different from Cisco core products. They use a build-to-stock (BTS) production model. BTS products are manufactured and held in inventory to satisfy demand as orders come in.

Until recently, Cisco maintained separate supply chain processes and an enterprise resource planning (ERP) system for its Scientific Atlanta division.

In addition to more than 1000 suppliers, along with manufacturing partners and logistics providers, the Cisco supply chain encompasses:

●    16 CTO manufacturing sites

●    4 BTS sites

●    8 strategic logistics centers

●    25,000-plus orderable product IDs, or PIDs (about 25 percent assemble-to-order, 75 percent spares)

●    Millions of shipments annually (for example, approximately 9 million cartons shipped in the six months ending March 2014).

Like many large enterprises in today’s fiercely competitive climate, Cisco looked toward optimizing its supply chain to increase business scale and agility. But the company was stymied by a highly customized supply chain management (SCM) system. Disparate CTO and BTS operations, multiple ERP instances, and redundant, non-standardized processes made scalability nearly impossible, and hampered productivity and the customer experience. The complex, overly tailored Cisco  version of Oracle e-Business Suite 11i included:

●    More than 2500 customizations, with an estimated 50 percent of them unused

●    250 custom applications

●    30,000 custom data objects

●    19 separate databases 

In this cumbersome environment, adding a single data field to an existing report required the full-time-equivalent of one employee per month. Parts data, alone, resided in seven different systems.

“IT was not able to respond quickly to supply chain business requirements, and the business was not able to respond quickly to market transitions and opportunities,” says Shanthi Iyer, director, Cisco Value Chain IT, Supply Chain Management.

Transforming Business through Simplification: Large-Scale Services

Efforts to streamline the supply chain got a significant boost in early 2012 when Cisco Chief Information Officer (CIO) Rebecca Jacoby issued a directive about simplifying large-scale services (LSS), the Cisco description for foundational services that any company needs to operate such as SCM, human resources management, and customer care: The directive: Use standardized processes and common practices and customize only when necessary for flexibility. Simplifying LSS functions across the organization is critical to the ability of Cisco to scale, grow, and implement new business models competitively.

Supply chain was the first LSS to be funded, giving rise to the Supply Chain LSS Program. Earmarked for initial implementation was “LSS Bundle 1,” consisting of SCM, order management, product lifecycle management, revenue recognition, and country enablement. The Supply Chain LSS Program was guaranteed resources and budget for several quarters. Primary objectives of the supply chain transformation dovetailed (and would be driven by) three top corporate strategic priorities:

●    Improve country enablement . Country enablement refers to the ability of Cisco to set up subsidiaries or branches (legal entities) in specific countries to enable the sale of products, services, and solutions at competitive prices. Upgrading to Oracle e-Business Suite R12 – specifically, exploiting out-of-the-box (OOTB) functionality such as localization – would be pivotal to advancing country enablement.

●    Decommission the Cisco data center in San Jose, California . Among critical applications housed at the San Jose data center was the Oracle 11i ERP instance. This data center had no backup, and was located near an earthquake fault line. To minimize business risk, Cisco IT was migrating production applications at the San Jose data center to its data center in Richardson, Texas, where they would run on the Cisco Unified Computing System™ (Cisco UCS ® ) in a fully redundant environment.

●    Integrate the Service Provider Video Technology Group (including Scientific Atlanta) . Oracle R12 functionality would enable Cisco to implement a BTS model easily, within the same supply chain system alongside CTO.

First on the LSS team’s agenda? Evaluate the feasibility of upgrading to Oracle R12, or more precisely, evaluate the feasibility of adopting R12 OOTB functionality to simplify supply chain business processes. To that end, the team’s goal was to use at least 80 percent OOTB functionality, starkly different than the highly customized Oracle 11i setup.

Transformation isn’t about installing a new system or implementing new processes. It’s about achieving business results. Throughout the planning and execution, supply chain stakeholders and Cisco IT kept a laser focus on business requirements and the capabilities needed to support them. In fact, business and IT worked side by side, physically. The two groups collocated in the same building, on the same floor specifically, for the supply chain transformation.

The business-IT alignment is bolstered by planning cycles that follow a “lead with architecture” approach. Cisco stresses the importance of aligning business and technology architectures, and uses an enterprise architecture framework that facilitates this alignment and resulting business value. The BOST reference framework and methodology from Proact Business Transformation Inc. gives IT and business stakeholders a shared taxonomy, and organizes inter-linked planning models based on four architecture views of the enterprise: Business, Operations, Systems, and Technology. Applying BOST helps ensure that the capabilities that IT delivers align with business requirements.

“BOST is very transformational in bringing business and technology architectures together,” says Raman Prabhakaran, manager, Cisco IT. “For the transformation, we needed to understand business processes, such as delivery and shipping, and how they transfer to the supply chain. We need to provide data to business stakeholders and discuss operational challenges. BOST helps us get there faster.”

Laying the Groundwork: Global Process Design

For each major area of the end-to-end supply chain (from demand and supply planning to scheduling, managing order backlogs, communicating with partners, and delivering products to customers), the LSS Program team assessed Oracle R12 OOTB functionality against existing outsourced manufacturing and logistics processes. The team focused on:

●    What is currently being done: What are the business requirements? Must haves? Unique operational aspects?

●    What Oracle R12 OOTB functionality is available: What would the end process look like? Could it be used to run the business without customization?

●    Where the business needs to go: What are the next-generation capabilities required for Cisco to be successful?

After three months, the team had crafted a set of business processes that described, at a high level, the scope of the program, how the transformation would look, and the changes that would be required to run the business using at least 80 percent Oracle R12 OOTB functionality.

Following the end-to-end process mapping, the team identified about 60 essential design decision scenarios. For example, at what point in the process flow should a purchase order (PO) be created in Oracle? After all the answers were logged, the team reduced the design decisions to 12 that were considered foundational.

“Going through the questions and answers not only informed the design, but gave us direction on how the process would look and what needed to be transformed,” says Joe McMorrow, director, Supply Chain Transformation, Global Business Operations at Cisco. “We also matched business requirements to potential IT activity.”

Using information culled in the design phase, program leads produced a visual called the “circle of light.” It represented the entire supply chain process, starting with forecasting. Stars marked milestones in the process, and callouts along the circle corresponded to the 12 foundational design decisions.

“The circle of light represented what the transformation would look like and identified areas that had change impacts to the business,” says McMorrow. “We used this one-page visual to help socialize the program with senior management. It gave them an opportunity to digest, in a quick way, what it would mean to transform from Oracle 11i in-house manufacturing to R12 OOTB functionality and outsourced manufacturing.”

Decommissioning the San Jose Data Center

Housing critical supply chain systems and ERP in the San Jose data center put Cisco at risk. The site has no backup and is located near an earthquake fault. Cisco IT transitioned all ERP and non-ERP supply chain processes and systems from the San Jose production data center to the Richardson, Texas, data center. In January 2014, Oracle 11i in the Cisco San Jose data center was fully decommissioned. The move to the Richardson data center, one in a pair of active-active data centers, closes a critical gap in business resiliency that existed in San Jose. The paired data centers run critical applications in both places simultaneously. In case of a disaster at one site, the other can protect the uptime and availability of data.

In the Richardson data center, Oracle R12 operates entirely on the Cisco UCS platform. Cisco UCS combines computing, networking, storage access, and virtualization in a single system. The move to Oracle R12 on Cisco UCS, along with integrating business-to-business and BTS models on the same SCM system, has greatly reduced infrastructure and process complexiity. Onboarding new manufacturing partners and nodes is faster, 6 months versus 18 months, and engineering change order (ECO) communication is more efficient.

As part of the Richardson data center cutover, the release team tested 10 regression scenarios that included backlog management and all key downstream steps in the order fulfillment process. No issues arose during the business verification testing. More than 14,000 ship sets moved through the system in the first week and a half without any major incidents. Cisco IT has turned its focus on delivering and validating R12 reports required for fiscal quarter-end reporting and U.S. Sarbanes-Oxley Act (SOX) records storage compliance.

Enabling New Business Capabilities

During the transformation, the supply chain ERP underwent significant consolidation (Table 1). Cisco IT also simplified and consolidated hundreds of reports, and transformed or lifted and shifted more than 300 business capabilities and applications.

Table 1.        Cisco Supply Chain ERP: Before and After Transformation

Working with business stakeholders, Cisco IT re-engineered and automated several processes and new capabilities throughout the supply chain. All the IT-enabled capabilities aligned with identified business requirements (Table 2). These efforts, coupled with the consolidation to a single global ERP instance, have yielded a host of supply chain process improvements, including:

Order fulfillment:

●    Reduced response time latency of request and order statusing

●    Automated prioritization of designated customers during supply constraints

●    Reduced order fulfillment time from 11 days to 3 days using the BTS model

●    POs processed in minutes instead of hours

●    Faster change management (due to eliminating multiiple systems)

Scheduling and returns:

●    Customer-segmented supply used for scheduling customer orders

●    Near real-time communication of backlog with configuration details

●    Parallel fulfillment of low-margin products through BTS supply chain

●    Improved returns handling with Return to A Stock capability

Table 2.        IT-Enabled Capabilities Align with Business Requirements

Structuring the Supply Chain LSS Program

The Supply Chain LSS Program team is composed of Cisco IT and business stakeholders and subject-matter experts throughout the supply chain organization. Table 3 shows the program team structure and responsibilities.

Governance and assigned roles provide focused oversight. The executive steering committee sets the strategic direction, reviews and approves the portfolio roadmap, and manages resources. The operating committee maintains the consolidated roadmap, escalates funding recommendations, and develops operational scenarios. For example, to ensure thorough evaluation of derived business value from the business unit and executive perspectives, key design decisions (the level of R12 customization required, associated risks, etc.) were created and vetted by both the LSS Program team and operating committee members at the executive level. The program management office maintains planned-versus-actual results, governs projects, and resolves issues.

Table 3.        Supply Chain LSS Program Team Structure and Responsibilities

Training Stakeholders

The training team uses several communication methods to prepare the organization for each set of releases and their corresponding functionality. Different training methods are used based on the audience and purpose:

●    Instructor-led training for reaching a wide audience; used for communicating complex process changes.

●    Web-based training for large, regionally dispersed groups; used for content not likely to change and situations with additional development time.

●    Handy, short reference guides used for describing low-impact, system-specific changes. Guides were available online in a centralized location.

●    Video-on-demand recordings of instructor-led sessions or SME training; good for users who could not attend live sessions and training refreshes.

Predominantly using 95 percent Oracle R12 OOTB functionality, Cisco simplified and consolidated supply chain business processes and the ERP system, and created a standardized, automated, end-to-end workflow. Today, 85 percent of the US$43 billion Cisco revenue is captured on the new platform.

Chief among the business benefits resulting from the supply chain transformation:

●    Time to add a new node (factory) shrunk from 18 months to 6 months.

●    30 to 50 percent reduction in time to market

●    Up to 73 percent reduction in order cycle times

●    Approximately 25 percent reduction in manual product touches

●    Increased profitability from 12 percent target reduction in cost-to-serve ratio

●    30 to 50 percent reduction in support costs

What’s more, the transformation has enabled:

●    Nimble expansion into new and emerging markets: Rapidly set up legal entities in emerging markets; end-to-end business capabilities and processes; common global capabilities for country-specific needs; local regulations and practices compliance.

●    Shorter time to market for new products and offers: flexibility in offer structures, commerce model, sourcing and delivery options; ability to handle whole offers.

●    Rapid acquisition integration: Flexibility to leverage BTS or CTO production models.

●    Business-to-business model with Cisco manufacturing partners: Eliminates redundant transactions; simplifies fulfillment processes and infrastructure.

●    Freight savings: Flexibility to ship direct from a manufacturing site or from a manufacturer direct to customer’s distribution center.

●    Intelligent scheduling: Ability to see the material availability at a detailed assembly level across the whole supply network.

●    Improved customer and partner experience: For customers - visibility of status throughout the order cycles; better lead times due to node reductions; shorter time to delivery; better synchronization of demand and supply; order and invoice accuracy. For partners - smooth integration through Cisco Commerce Workspace (CCW) and supply chain connectivity; improved collaboration; product lifecycle management (PLM) services with flexible deployment options.

Lessons Learned

Cisco offers the following best practices for organizations embarking on a supply chain transformation.

●    Secure executive focus and commitment up front.

●    Socialize business benefits, change impacts, and risks with senior management clearly and early.

●     Engage executives for timely mitigation of program issues and risks.

●    Seek cross-organizational sponsorshop to help overcome roadmap hurdles and customer concerns.

●    Ensure business and IT alignment across all program tracks. Encourage well-informed, timely decisions and resolutions made together.

●    Reduce employee burnout by establishing a dedicated program team. Leverage subject-matter experts from functional groups as needed.

●    Manage stakeholder engagement at a functional level.

●    Nurture a strong partnership with suppliers and manufacturing and logistics partners.

●    Encourage well-informed, timely decisions and resolutions.

●    Ensure you have support of senior management, internal project teams and leads, implementation partners, and vendors. Keep the lines of communication open.

●    Use collaboration technology, such as synchronous and asynchronous video, with supply chain partners for quicker, more cost-effective decision-making.

The last node in Cisco’s supply chain went live in the fourth calendar quarter of 2013. Cisco IT and the LSS Program team are focused on the following:

●    Stabilizing the R12 platform and all the new capabilities that have been implemented.

●    Optimizing the platform for any additional functionality and capabilities, or enhancements to existing ones.

●    Transforming other LSS processes related to the supply chain. The IT foundation between order management and the supply chain is under way, which will facilitate the buildout of fully automated entities in emerging countries.

For More Information

To read additional Cisco IT case studies on a variety of business solutions, visit Cisco on Cisco: Inside Cisco IT

This publication describes how Cisco has benefited from the deployment of its own products. Many factors may have contributed to the results and benefits described; Cisco does not guarantee comparable results elsewhere.

CISCO PROVIDES THIS PUBLICATION AS IS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

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Marquette University

Raynor Library

• marquette.edu //
• Contacts //

• Research Guides
• Subject Guides
• Supply Chain Management
• Case studies

Supply Chain Management: Case studies

• Article Search
• Book Search
• Suppliers & customers

Why case studies?

Case studies from harvard, scholarly journal articles, other journals as sources for case studies.

• Encyclopedias ...

Case studies can provide:

• Profiles of real, individual companies, including information about their work processes, relationships
• Profiles of industries, including information about the structure of the industry, and the relationships within the supply chain
• Numbers and data

Please note that this is not a guarantee!  But case studies sometimes do provide all of the above ...

Harvard Business School Press vs. Harvard Business Review

• Two sources:  published as articles in the journal Harvard Business Review ; or published as individual publications by the Harvard Business School Press

We do NOT subscribe to the Harvard Business School Press case studies.  (That would be really expensive ...)  However, please be aware that these case studies are actually quite cheap to buy individually; they go for about $7 each when you buy them directly from Harvard.  Below is a link to their site.

That said, there are some case studies within the journal Harvard Business Review (HBR).  These are not the Harvard Business School case studies (the ones used in the Harvard Business School classes); these tend to be shorter, less detailed and less in-depth, and are usually about fictitious companies.  Also below is a link to the full-text of the HBR.

• Harvard Business School Press - Cases
• Harvard Business Review Full-text for 1922 - present. Look for the link "Search within this publication" on the left, above Publication Details. Then search either for " company name and case studies", or " supply chain practice and case studies".

How to read case studies: 

Harvard has some recommendations for this.  Below is a short video introduction and a book about it.

About the ebook:

Read it ONLINE or download individual chapters, that is my recommendation!  Downloading the complete ebook is only necessary if you need to read it OFFLINE; be aware that there are several requirements for downloading an ebook .  

• Video Introduction to The Case Study Handbook

For these databases, try the following types of searches:

• company name and case studies
• work process and case studies
• supply chain issue / practice and case studies

In each of the databases, what happens after you get to a list of results will vary ... if you need help, please ask?!

• SAGE Journals Online from Sage This link opens in a new window Searches full text articles of SAGE journals (approximately 900 titles). Emphasis on the health and social sciences. 1982 - present.
• Journal of Business Case Studies (Online) Online coverage 2011 - 2019 (v. 7, no. 6 - v. 15, no. 2). 2009 - 2011 content also available here . Exact coverage: Nov/Dec 2009 (v. 5, no. 6) - Sep/Oct 2011 (v. 7, no. 5)
• Journal of Business Cases and Applications 2007 - present, an open access journal. Published by the Academic and Business Research Institute.
• Journal of Cases on Information Technology Online full-text only for 2003-2009 . But there is indexing for later time periods, making Interlibrary Loan (ILL) a possibility. Click here for more info about ILL .
• Journal of the Operational Research Society For this journal we have three different sources for online full-text, covering different time periods. Therefore, the link above goes to the Marqcat record, which will lead you to all three sources.
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Supply Chain Management Free Case Studies

Share these free Supply Chain Management case studies with your class 

Engage your students with real-world case studies that provide insights into supply chain practices, challenges, and opportunities. Share each case study with your students by simply copying and pasting the activity page URL into your learning management system (LMS).

Case 1: Rising Health Care Costs And The Role Of Outsourcing And Offshoring In The U.S. Health Care Sector

In this case study, your students will identify factors that are driving the health care costs higher in the United States than in peer countries. They will also discuss advantages and disadvantages of emerging trends in supply chain management such as adopting outsourcing in health care. After reading the case, they are encouraged to create an argument in favor of or against the view that health care offshoring is a threat to the U.S. health care industry.  See case study . 

• Case 2: McDonald’s Reinvents Itself Again

In this case study, your students will identify factors that are affecting demand management in the fast food industry and evaluate the reinvention strategy that McDonald’s has used to keep their fingers firmly on the pulse of their international customer base. Students will also be asked to advice McDonald’s with regards to future trends and the changes it should consider. After reading the case, they are encouraged to research areas in which the company plans to reinvent itself in the coming years, particularly in light of the appointment of its new CEO and the COVID-19 pandemic. See case study

Learn more about our offerings for your Supply Chain Management course:

Supply Chain Management

• Case 1: Rising Health Care Costs
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Supply chain management

• Business management
• Operations and supply chain management
• Operations strategy

Turning the Supply Chain into a Revenue Chain

• Gerard P. Cachon
• Martin A. Lariviere
• From the March 2001 Issue

Go Downstream: The New Profit Imperative in Manufacturing

• Richard Wise
• Peter Baumgartner
• From the September–October 1999 Issue

Breaking the Trade-Off Between Efficiency and Service

• Frances X. Frei
• From the November 2006 Issue

McDonald's and the Challenges of a Modern Supply Chain

• February 04, 2015

From Superstorms to Factory Fires: Managing Unpredictable Supply-Chain Disruptions

• David Simchi-Levi
• William Schmidt
• From the January–February 2014 Issue

Achilles' Heel of Supply Chain Management

• Ananth Raman
• Nicole DeHoratius
• From the May 2001 Issue

Don't Let Your Supply Chain Control Your Business

• Thomas Y. Choi
• From the December 2011 Issue

The Employer-Led Health Care Revolution

• Patricia A. McDonald
• Robert S. Mecklenburg M.D.
• Lindsay A. Martin
• From the July–August 2015 Issue

How to Build a Transparent Relationship with Your Suppliers

• September 24, 2021

Find the Weak Link in Your Supply Chain

• June 09, 2015

Building Resilient Supply Chains Won’t Be Easy

• Edith Simchi-Levi
• June 23, 2020

It’s Up To Manufacturers to Keep Their Suppliers Afloat

• Bindiya Vakil
• April 14, 2020

Coronavirus Is a Wake-Up Call for Supply Chain Management

• Dale Rogers
• March 27, 2020

Just in Time for the Holidays (HBR Case Study and Commentary)

• Eric McNulty
• M. Eric Johnson
• Horst Brandstatter
• Warren H. Hausman
• From the December 2005 Issue

Firing Up the Front Line

• Jon R. Katzenbach
• Jason A. Santamaria
• From the May–June 1999 Issue

The New Tools of Trade

• Regina M. Abrami
• Leonard Bierman
• From the May 2005 Issue

How Should We Diversify Our Supply Chain? (HBR Case Study and Commentary)

• Krishna G. Palepu
• Gabriele Natale
• Mahesh Palashikar
• From the November–December 2023 Issue

Resilience in a Hotter World

• Andrew Winston
• From the April 2014 Issue

Suppliers—Manage Your Customers

• From the November–December 1989 Issue

The Next Supply-Chain Challenge Isn't a Shortage - It's Inventory Glut

• PS Subramaniam
• September 29, 2023

AI Has a Revolutionary Ability to Parse Details. What Does That Mean for Business?

• David Weinberger
• Michele Zanini
• July 29, 2024

Disclosing Downstream Emissions

• Robert S. Kaplan
• Karthik Ramanna
• From the July–August 2024 Issue

How Machine Learning Will Transform Supply Chain Management

• Morris A. Cohen
• Rohan Deshpande
• Vinayak Deshpande
• From the March–April 2024 Issue

Building a Supplier Diversity Program? Learn from the U.S. Government.

• Chris Parker
• Dwaipayan Roy
• February 09, 2024

2023: A Strange, Tumultuous Year in Sustainability

• December 28, 2023

How Global Companies Use AI to Prevent Supply Chain Disruptions

• Remko Van Hoek
• Mary Lacity
• November 21, 2023

Case Study: How Should We Diversify Our Supply Chain?

How Kenvue De-Risked Its Supply Chain

• Michael Altman
• Atalay Atasu
• Evren Özkaya
• October 18, 2023

The Next Supply-Chain Challenge Isn’t a Shortage — It’s Inventory Glut

Using Technology to Improve Supply-Chain Resilience

• Jonathan Colehower
• September 25, 2023

How Tony’s Chocolonely Created a Purpose-Driven (and Profitable) Supply Chain

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A Comprehensive Review of Supply Chain Management Case Studies with Solutions

Discover the latest supply chain management case studies with solutions in this comprehensive review.

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In today's fast-paced business world, supply chain management has become an essential element for success. It refers to the coordination and management of activities involved in the production and delivery of goods or services, from the initial suppliers to the end customers. Effective supply chain management helps organizations to reduce costs, improve efficiency, and enhance customer satisfaction. In this article, we will take a comprehensive look at supply chain management case studies and solutions that can help organizations to optimize their supply chain operations.

Understanding the Importance of Supply Chain Management

Supply chain management is important for a variety of reasons. Firstly, it helps organizations to establish a seamless flow of goods and services, which in turn, improves customer satisfaction. Secondly, it enables companies to optimize their inventory levels, which increases efficiency and lowers costs. Finally, supply chain management provides a framework for collaboration between suppliers, manufacturers, and retailers, which can lead to improved product quality and innovation.

In addition to these benefits, effective supply chain management can also help organizations to mitigate risks and respond quickly to disruptions. By having a well-designed and well-managed supply chain, companies can better anticipate and prepare for potential disruptions, such as natural disasters or supplier bankruptcies. This can help to minimize the impact of these events on the organization and its customers. Furthermore, a strong supply chain can enable companies to quickly adapt to changes in demand or market conditions, allowing them to stay competitive and meet customer needs.

Benefits of Effective Supply Chain Management Systems

Effective supply chain management systems provide numerous benefits for organizations. They help to reduce costs by improving inventory management, optimizing transportation and logistics, and reducing waste and redundancies. They also enhance efficiency by streamlining processes and improving communication and collaboration between suppliers and customers. Furthermore, effective supply chain management systems lead to improved customer satisfaction by ensuring that products are available when and where they are needed.

In addition to the above benefits, effective supply chain management systems also help organizations to mitigate risks. By having a well-managed supply chain, organizations can identify potential risks and take proactive measures to prevent disruptions. This can include having backup suppliers, implementing contingency plans, and monitoring supply chain performance regularly.

Another benefit of effective supply chain management systems is that they can help organizations to stay competitive in the market. By having a streamlined and efficient supply chain, organizations can offer better prices, faster delivery times, and higher quality products than their competitors. This can lead to increased market share and improved profitability.

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Importance of Case Studies in Supply Chain Management

Case studies are critical in supply chain management as they provide real-life examples of how companies have optimized their supply chain operations. They enable organizations to learn from the successes and failures of others and apply those lessons to their own supply chain operations. Case studies also provide a comprehensive overview of the challenges faced by companies in supply chain management and how they have overcome them.

Furthermore, case studies can also help organizations identify potential risks and opportunities in their supply chain. By analyzing the strategies and tactics used by other companies, organizations can gain insights into how to improve their own supply chain processes and mitigate potential risks. Additionally, case studies can be used as a tool for benchmarking, allowing organizations to compare their own performance against industry standards and best practices.

Real-life Examples of Successful Supply Chain Management

One example of successful supply chain management is Walmart, which has implemented a highly efficient supply chain system. Walmart has a sophisticated inventory management system, which helps to optimize inventory levels and reduce waste. The company also uses a network of distribution centers to ensure that products are available in stores when they are needed. Furthermore, Walmart has implemented a collaborative approach with its suppliers, which has led to improved product quality and innovation.

Another example of successful supply chain management is Apple Inc. Apple has a complex supply chain system that involves multiple suppliers and manufacturers across the globe. However, the company has managed to streamline its supply chain operations to ensure that products are delivered to customers on time and at a reasonable cost. Apple also works closely with its suppliers to ensure that they meet the company's strict quality standards.

Amazon is also known for its successful supply chain management. The company has a vast network of warehouses and distribution centers, which allows it to deliver products to customers quickly and efficiently. Amazon also uses advanced technology, such as robotics and artificial intelligence, to optimize its supply chain operations. Additionally, the company has implemented a customer-centric approach to its supply chain management, which means that it focuses on delivering a seamless and personalized experience to its customers.

Case Study 1: Streamlining the Supply Chain Process for Improved Efficiency

A company in the automotive industry implemented a supply chain management system to streamline its supply chain process. The system involved the use of centralized planning and scheduling tools to improve communication and collaboration between suppliers and key stakeholders. As a result, the company was able to reduce inventory levels, improve production efficiency, and enhance customer satisfaction.

Furthermore, the supply chain management system also allowed the company to identify and address bottlenecks in the supply chain process. By analyzing data from the system, the company was able to identify areas where delays were occurring and take corrective action to prevent them from happening in the future. This not only improved efficiency but also reduced costs associated with delays and disruptions in the supply chain.

Case Study 2: Implementing a Lean Inventory System to Reduce Costs

A manufacturer of consumer goods implemented a lean inventory system to reduce costs. The system involved eliminating excess inventory and reducing lead times, which resulted in significant cost savings. The company also implemented a just-in-time (JIT) delivery system, which helped to reduce waste and improve efficiency.

As a result of the lean inventory system, the manufacturer was able to improve their customer service levels by reducing the time it took to fulfill orders. The JIT delivery system allowed the company to receive materials and supplies just in time for production, reducing the need for storage space and minimizing the risk of overstocking. Additionally, the company was able to identify and eliminate inefficiencies in their supply chain, resulting in further cost savings and improved overall performance.

Case Study 3: Enhancing Collaboration between Suppliers for Improved Product Quality

A manufacturer of electronic components implemented a collaborative approach with its suppliers to enhance product quality. The company worked closely with its suppliers to identify and address quality issues, and also provided training and support to its suppliers. As a result, the company was able to improve product quality and reduce the number of defects.

Furthermore, the collaborative approach also led to a reduction in production costs. By working together with its suppliers, the company was able to identify areas where costs could be reduced without compromising on quality. This resulted in a more efficient supply chain and ultimately, cost savings for the company.

Solutions to Common Challenges in Supply Chain Management

Common challenges in supply chain management include inventory management, transportation and logistics, communication and collaboration, and risk management. To overcome these challenges, organizations can implement solutions such as advanced inventory management systems, transportation and logistics planning tools, collaboration platforms, and risk assessment and mitigation strategies.

Another important solution to address challenges in supply chain management is the use of data analytics. By analyzing data from various sources such as suppliers, customers, and internal operations, organizations can gain insights into their supply chain performance and identify areas for improvement. This can help in optimizing inventory levels, reducing transportation costs, improving communication and collaboration, and mitigating risks. Additionally, the use of automation and artificial intelligence can further enhance supply chain efficiency and effectiveness.

Key Factors to Consider when Designing a Supply Chain Management System

When designing a supply chain management system, organizations should consider factors such as customer demand, inventory levels, transportation and logistics, communication and collaboration, and risk management. They should also consider the costs and benefits of the system, and ensure that it aligns with their overall business strategy.

Another important factor to consider when designing a supply chain management system is sustainability. Organizations should aim to create a system that is environmentally friendly and socially responsible. This can include using eco-friendly packaging materials, reducing waste, and ensuring fair labor practices throughout the supply chain. By prioritizing sustainability, organizations can not only reduce their environmental impact but also improve their reputation and appeal to socially conscious consumers.

Best Practices for Successful Supply Chain Management Implementation

Some best practices for successful supply chain management implementation include conducting a thorough analysis of the organization's needs and requirements, selecting the appropriate technology and tools, and investing in training and support for employees. It is also important to establish clear goals and metrics for measuring success and regularly monitor and evaluate the system to ensure it is working effectively.

Another important best practice is to establish strong relationships with suppliers and partners. This can involve regular communication, collaboration on joint initiatives, and sharing of data and information. By working closely with suppliers and partners, organizations can improve efficiency, reduce costs, and enhance overall supply chain performance.

Finally, it is essential to remain flexible and adaptable in the face of changing market conditions and customer demands. This may involve regularly reviewing and updating supply chain processes and technologies, as well as being open to new ideas and approaches. By staying agile and responsive, organizations can better position themselves for success in today's rapidly evolving business landscape.

Emerging Trends in Supply Chain Management

Some emerging trends in supply chain management include the use of artificial intelligence (AI) and machine learning (ML) to optimize operations, the adoption of blockchain technology to improve transparency and traceability, and the proliferation of e-commerce and omni-channel retailing.

The Role of Technology in Modern Supply Chain Management

Technology plays a vital role in modern supply chain management. It enables organizations to collect and analyze vast amounts of data, which can be used to optimize operations and improve decision-making. Technology also facilitates communication and collaboration between suppliers, manufacturers, and retailers, and enables real-time tracking of goods and services.

The Future of Supply Chain Management – What to Expect and How to Prepare

The future of supply chain management is likely to be characterized by increased automation, the adoption of AI and ML, and greater collaboration and transparency between suppliers, manufacturers, and retailers. Organizations should be prepared to invest in new technologies and tools, and adapt their supply chain management systems to take advantage of emerging trends and opportunities.

Conclusion – The Value of Effective Supply Chain Management Solutions

Effective supply chain management is essential for organizations to achieve success in today's competitive business environment. It enables companies to reduce costs, enhance efficiency, and improve customer satisfaction. By implementing the solutions and case studies discussed in this article, organizations can optimize their supply chain operations and achieve sustainable growth and prosperity.

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An Integrated Supply Chain Management System: A Case Study in Healthcare Sector

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This research has designed and developed an integrated supply chain management (SCM) system for optimizing inventory control and reducing material handling costs of pharmaceutical products in healthcare sector. The supply chain in this work is composed of pharmaceutical companies, a wholesaler, and hospitals. At first, we have analyzed hospital’s business processes and reviewed system requirements for the efficient supply chain management. VMI (Vendor-Managed Inventory), which is one of important applications of SCM, has been adopted and implemented to improve material handling efficiency. Online procurement system is also developed for the departments that consume drugs and place orders. Besides, real time information sharing functionalities are provided for optimizing inventory control of pharmaceuticals. The developed SCM system enables hospitals to improve the procurement processes and inventory control of pharmaceutical products, which results in decreasing total inventory more than 30%. By sharing information with hospitals, the wholesaler can gather more timely and exact data about inventory status and drug usage volumes of hospitals, so it can forecast the demand more accurately, which enables needed products to be supplied timely and cost-effectively. With the SCM system, total supply chain cost of pharmaceutical products has been decreased significantly.

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Kim, D. (2005). An Integrated Supply Chain Management System: A Case Study in Healthcare Sector. In: Bauknecht, K., Pröll, B., Werthner, H. (eds) E-Commerce and Web Technologies. EC-Web 2005. Lecture Notes in Computer Science, vol 3590. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11545163_22

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Information systems in supply chain management: A comparative case study of three organisations

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Research output : Contribution to journal › Article › peer-review

Supply Chain Management (SCM) is recognised as a core competitive strategy for businesses in almost every industry. A strong supply chain provides products and services to consumers faster, cheaper, and better. The paper discusses SCM and information systems in the supply chain. Case studies of Wal-Mart, Amazon.Com and United Parcel Services (UPS) and their use of information systems in the supply chain are presented. Wal-Mart and Amazon have established critical and timely strategies in their supply chains through huge investments in Information Technology (IT). While Wal-Mart and Amazon are offering their products to consumers, UPS offers logistics solutions to clients. These companies use a variety of information technologies which include satellite systems, barcodes, web-based Electronic Data Interchange (EDI), Radio Frequency Identification (RFID), data warehousing, and e-commerce in their supply chain. The supply chain and use of these technologies in SCM are reviewed and compared for these three organisations.

All Science Journal Classification (ASJC) codes

• Management Information Systems
• Information Systems and Management
• Management of Technology and Innovation

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• 10.1504/IJBIS.2006.008955

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• Supply chain management Engineering & Materials Science 100%
• Comparative Case Study Business & Economics 97%
• Supply chains Engineering & Materials Science 78%
• Information systems Engineering & Materials Science 65%
• Supply Chain Management Business & Economics 63%
• Information Systems Business & Economics 56%
• Wal-Mart Business & Economics 51%
• Supply Chain Business & Economics 47%

T1 - Information systems in supply chain management

T2 - A comparative case study of three organisations

AU - Subramanian, Girish H.

AU - Iyigungor, Abdullah C.

N2 - Supply Chain Management (SCM) is recognised as a core competitive strategy for businesses in almost every industry. A strong supply chain provides products and services to consumers faster, cheaper, and better. The paper discusses SCM and information systems in the supply chain. Case studies of Wal-Mart, Amazon.Com and United Parcel Services (UPS) and their use of information systems in the supply chain are presented. Wal-Mart and Amazon have established critical and timely strategies in their supply chains through huge investments in Information Technology (IT). While Wal-Mart and Amazon are offering their products to consumers, UPS offers logistics solutions to clients. These companies use a variety of information technologies which include satellite systems, barcodes, web-based Electronic Data Interchange (EDI), Radio Frequency Identification (RFID), data warehousing, and e-commerce in their supply chain. The supply chain and use of these technologies in SCM are reviewed and compared for these three organisations.

AB - Supply Chain Management (SCM) is recognised as a core competitive strategy for businesses in almost every industry. A strong supply chain provides products and services to consumers faster, cheaper, and better. The paper discusses SCM and information systems in the supply chain. Case studies of Wal-Mart, Amazon.Com and United Parcel Services (UPS) and their use of information systems in the supply chain are presented. Wal-Mart and Amazon have established critical and timely strategies in their supply chains through huge investments in Information Technology (IT). While Wal-Mart and Amazon are offering their products to consumers, UPS offers logistics solutions to clients. These companies use a variety of information technologies which include satellite systems, barcodes, web-based Electronic Data Interchange (EDI), Radio Frequency Identification (RFID), data warehousing, and e-commerce in their supply chain. The supply chain and use of these technologies in SCM are reviewed and compared for these three organisations.

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DO - 10.1504/IJBIS.2006.008955

M3 - Article

AN - SCOPUS:33645014610

SN - 1746-0972

JO - International Journal of Business Information Systems

JF - International Journal of Business Information Systems

Case Study on JUSDA's Implementation of Smart Logistic Systems

JUSDA , a leader in supply chain management, prioritizes collaboration for cost reduction and efficiency improvement. Emphasizing seamless operations globally, JUSDA sets new industry standards with innovative services. The integration of cutting-edge technology into supply chain management is revolutionizing business operations. Through the JusLink Smart Supply Chain platform, JUSDA leverages IoT, cloud computing, and big data analytics to enhance connectivity and information sharing. By optimizing resource allocation and production processes, JUSDA's smart transportation solutions drive efficiency across industries.

JUSDA's Smart Logistic Overview

Smart Logistic Systems

Smart Logistic systems are at the core of JUSDA's innovative approach to supply chain management. By leveraging JusLink Smart Supply Chain platform, JUSDA integrates IoT, cloud computing, and big data analytics to ensure seamless connectivity and information sharing across the entire supply chain ecosystem. This system supports collaboration among suppliers, manufacturers, service providers, and customers for efficient resource utilization and precise business decision analysis.

Definition and Importance

The JusLink Smart Supply Chain platform is a game-changer in the industry. It harnesses AI, ML, and analytics to provide data-driven intelligence, automation, and optimization for cost-effective operations. This approach addresses the instant delivery demands of modern-day customers while enhancing overall operational efficiency .

JUSDA's Approach

JUSDA's smart transportation strategy focuses on comprehensive support for internal and external customer information systems through the JusLink Smart Supply Chain platform. By facilitating collaboration among stakeholders in the supply chain, including suppliers, manufacturers, service providers, and customers, JUSDA ensures valuable information exchange for efficient decision-making processes.

JusLink Digital System

The JusLink Smart Supply Chain platform is designed to revolutionize supply chain operations by providing cutting-edge features that enhance connectivity and streamline processes.

Features of JusLink

Seamless Connectivity: The platform enables real-time communication between all parties involved in the supply chain.

Data Analytics: Leveraging big data analytics allows for precise decision-making based on accurate insights.

Automation: The system automates repetitive tasks to improve operational efficiency.

Benefits for Customers

Enhanced Visibility: Customers gain transparency into their supply chain processes.

Cost Efficiency: Optimized operations lead to cost savings throughout the supply chain.

Improved Decision-Making: Access to real-time data enables informed business decisions.

Implementation Strategies

Technology integration, use of ai and iot.

Incorporating AI and IoT technologies into JUSDA's smart transportation systems revolutionizes operational efficiency. By utilizing artificial intelligence, the system can analyze vast amounts of data in real-time, optimizing routes and schedules for seamless transport operations. The Internet of Things enhances connectivity by enabling vehicles to communicate with each other and with infrastructure, ensuring a smooth flow of traffic.

Data Analytics

Data analytics plays a pivotal role in JUSDA's implementation of smart transportation. Through advanced analytics tools, JUSDA can extract valuable insights from the data collected by sensors and devices throughout the transportation network. These insights drive informed decision-making processes, leading to improved resource allocation and enhanced customer service.

Operational Changes

Multimodal transport.

JUSDA's adoption of multimodal transport solutions diversifies its service offerings, providing customers with flexible and efficient transportation options. By combining different modes of transport such as road, rail, air, and sea, JUSDA optimizes logistics operations to meet varying customer needs. This integrated approach ensures timely deliveries while reducing overall costs.

Road Transportation Network

Enhancing its road transportation network is a strategic move by JUSDA to improve last-mile delivery services. By expanding its fleet and optimizing routes, JUSDA increases the reliability and efficiency of its ground transportation operations. This expansion not only benefits customers by ensuring on-time deliveries but also contributes to reducing carbon emissions through optimized route planning.

Benefits and Future Prospects

Efficiency and Cost Reduction

Enhancing operational efficiency is a key advantage of JUSDA's smart transportation systems. By optimizing routes, schedules, and resource allocation, JUSDA ensures that goods are delivered promptly and cost-effectively. This operational streamlining not only reduces delays but also minimizes unnecessary expenses, ultimately leading to significant cost savings for the company.

Operational Efficiency

Operational efficiency is at the core of JUSDA's smart transportation initiatives. By leveraging real-time data analytics and AI technologies, JUSDA can proactively address potential issues in transport operations. This proactive approach allows for quick adjustments to routes or schedules, ensuring that deliveries are made efficiently and on time. The seamless coordination among different stakeholders in the supply chain further enhances operational efficiency.

Cost Savings

Cost savings are a direct result of JUSDA's commitment to optimizing its smart transportation systems. Through efficient route planning, reduced fuel consumption, and streamlined processes, JUSDA can significantly lower its overall operational costs. These savings not only benefit the company but also contribute to providing more competitive pricing for customers, fostering long-term partnerships based on reliability and affordability.

Environmental Impact

JUSDA's implementation of smart transportation systems goes beyond efficiency gains; it also prioritizes sustainable practices to reduce environmental impact. By minimizing emissions through optimized routes and eco-friendly transport solutions, JUSDA actively contributes to a greener future for the transportation industry.

Reduced Emissions

Reducing carbon emissions is a crucial aspect of JUSDA's sustainability efforts. Through smart route planning and the use of environmentally friendly vehicles, JUSDA aims to minimize its carbon footprint while maintaining high service standards. This commitment to reducing emissions aligns with global environmental goals and positions JUSDA as a responsible corporate citizen.

Sustainable Practices

Embracing sustainable practices is ingrained in every aspect of JUSDA's smart transportation approach. From energy-efficient logistics operations to eco-conscious supply chain management, JUSDA prioritizes sustainability without compromising on service quality. By adopting green technologies and promoting environmentally friendly initiatives, JUSDA sets a precedent for sustainable practices in the industry.

JUSDA's innovative approach to smart transportation is transforming the industry landscape.

Industry stakeholders are witnessing a paradigm shift towards efficient and sustainable logistics solutions.

Future developments should focus on enhancing connectivity and embracing emerging technologies for continued growth.

Innovative Growth: JUSDA's Impactful Sustainability Strategies

Streamlined Eco-Friendly: JUSDA's Logistics Expansion Revealed

JUSDA's Path to Success: Data-Driven Achievements in 2024

Cutting-Edge Logistics: JUSDA's Tech for Superior Efficiency

Redefining Efficiency: Native Smart Transport Solutions

A JUSDA representative will contact you. Please contact us if you have any other queries.

© 2024 JUSDA Supply Chain Management International Co.,Ltd. All rights reserved.

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3 questions food and beverage manufacturers should ask automation suppliers

By automating key supply chain processes, food and beverage manufacturers can delay or eliminate the need to open new facilities and reduce their exposure to labor uncertainty, helping future proof the food and beverage supply chain while potentially reducing operating costs. 

Automated storage and retrieval systems (ASRS), for example, enable manufacturers to significantly increase storage density and throughput for inbound packaging materials and outbound pallets, which is particularly valuable as real estate and warehouse development costs continue to escalate. Automated or semi-automated palletizing systems provide similar benefits—reducing the space and labor required to create mixed-SKU pallets—to help manufacturers adapt to changing order profiles. 

So, the business case for automation has never been stronger and the challenge shifts to choosing among the multitude of automation suppliers to ensure you get a solution that meets current needs while delivering high value over a long life. Here are three questions to help separate the contenders from the pretenders.

1. "What’s your track record in our industry?"

Automation has a long history in the food and beverage supply chain so it’s not unreasonable to expect an automation provider to have a track record in the industry that stretches back several decades. Swisslog, for example, has automation systems  that have been in continuous operation for more than 30 years at multiple food and beverage manufacturing sites. That experience does more than demonstrate equipment quality and reliability. It ensures a supplier is well-grounded in the industry and understands requirements and how they have changed over time. It also serves as the foundation for building deep organizational expertise. From solution design through lifecycle support, a supplier’s industry experience adds value to every phase of a manufacturer’s automation journey.  The impact can be especially noticeable in installation and commissioning where experience can make the difference between going live on time and on budget and missed deadlines and expensive delays. Customer references are essential to the vendor selection process, but it can also be worth the time to look beyond the references provided to get a sense of a company’s depth of experience and reputation in the industry .

2. "How well does your automation software support process efficiency, inventory management, and traceability?"

The software that controls automation is at least as important to the success of a project as the automation technology itself and that importance should be reflected in the supplier selection process.  Key software requirements for food and beverage manufacturers tend to center on inventory management, traceability and process efficiency . Can the automation software manage inventory based on batch, expiry date, best-by date or any other factors important to your customers? Can it support detailed tracking of movements within the warehouse, both in terms of stock changes and physical location, to ensure traceability? How does it enable efficiency across manual and automated processes, and does it allow you to access and control all aspects of the operation from a single interface ?   A mature, modular software platform that includes WMS, WES and ACS functionality, such as the Swisslog SynQ platform , will have all of these capabilities included in the standard offering.   Beyond functionality, take the time to learn how software is developed and managed as these “behind-the-scenes” processes can have a direct impact on operations. Software is continually evolving so be sure your provider has a multi-year product roadmap, integrates security into design and implementation processes, and has a well-defined plan for technical upgrades. Also, find out if the same platform is used in all regions. A global platform enables software standardization across locations and also allows the provider to focus resources on advancing and supporting one platform rather than allocating resources and expertise across multiple systems.

3. "How are solutions supported across their lifecycle?"

Every automation system requires regular maintenance and ongoing software support. But it’s easy to overlook the importance of these capabilities until a site is down for days while you’re waiting for a technician to travel in from another region or hours because of slow response from software support specialists. At minimum, food and beverage manufacturers should ensure that local hardware support is available and compare average response times and first-time resolution rates for the suppliers they are considering working with. The other factor that should be considered in lifecycle planning is how automation deployed today will adapt to future product and market changes , which may be unknown at the time the system is installed. Can the system be scaled to provide more storage or higher throughputs; can it be easily integrated with complementary automation systems, such as those used in automated or semi-automated mixed-SKU palletizing; and does the supplier have standardized modernization programs that can extend solution life as technology advances? With today’s automation technologies, solutions can be designed to meet current requirements cost effectively while maintaining the flexibility to continue to deliver value as supply chain requirements change.

Automation that works for food and beverage manufacturers

Swisslog has decades of experience providing automation solutions for the food and beverage industry with hundreds of solutions in operation. Our mature and proven portfolio of technologies is designed to meet the needs of food and beverage manufacturers through standardized solutions that simplify operation, management and maintenance. And our modular hardware and software enables configurability, scalability and operating flexibility, backed by industry-leading lifecycle support.

To learn more, visit our website  or contact us .

Sales Consultant, Swisslog ANZ

Warehouse operators in Canada are being squeezed from multiple directions. With vacancy rates low in key markets & real estate costs rising, many are facing higher costs for warehouse development.

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A bi-objective model for the multi-period inventory-based reverse logistics network: a case study from an automobile component distribution network.

1. Introduction

• To optimize the transportation system in the ISACO company.
• To cut down transportation costs.
• To increase customer satisfaction by increasing the supply of customer demands.
• To allow the customers to return unused parts (which are not used by customers due to seasonal variations or environmental changes and market fluctuations.
• To collect and dispose or recycle the stock parts.

2. Literature Review

2.1. a review of the literature on distribution systems in supply chain management, 2.2. a review of the literature on green logistics in supply chain management, 3. materials and methods.

• Very high transportation costs induced by long round-trip distances.
• High costs imposed on the company as a result of vehicle breakdown.
• Frequent troubles related to timely goods delivery (e.g., the cities located far from Tehran, the chances are high that the goods do not reach on time).
• To benefit from the full capacity of cars, it is required that the amount of the ordered goods reach a certain quantity and then the goods be delivered to the representatives, which leads to dissatisfaction among the representatives and losing the competitive market.
• The lack of order and prioritization in the current system.
• Not considering different scenarios in decision making.
• Not being able to return unused or low-use parts by the representatives.
• The lack of an integrated system for receiving scrap parts.
• Not able to implement strategic planning.
• Some of the expected merits of the new system are the following:
• Reducing the costs resulting from redundant transportation.
• Increasing the representatives’ satisfaction level due to goods’ timely delivery and increasing the power to supply the demanded goods and the possibility of returning low-use parts to the representative.
• Systematizing transportation system which curbs other nuisances.
• Increasing the flexibility of the system.
• Decreasing the risks such as the sensitive parts becoming faulty during long transportation or the possibility of vehicle breakdowns that impose losses on the company.
• Building regional warehouses and reducing the heavy costs of the central warehouse.
• Controlling the system better and the potential to constantly improve.

5. Discussion and Conclusions

• Employing a multi-period model along with the power of inventory management so that it leads to reduced costs and increased revenue.
• With respect to the variety of available products, the number of product groups should be increased and included in the proposed model.
• Reducing the time of ordering periods to better use the multi-period model, supplying faster and more up-to-date customer demands in the year, and removing the barriers of the inventory cost increase through modeling and making decisions at the tactical and operational level.
• Raising the number of customers and applying the proposed model to the actual number of customers. It is worth mentioning that in this model, they were integrated into the provincial centers to facilitate the modeling of customer demand.
• Constructing regional warehouses in the locations suggested by the model outputs considering the construction cost and setting up and storing the goods in these warehouses.
• Launching the central warehouse number 2 when its effectiveness gets approved in all the models to properly benefit from it.
• Regularly controlling the proposed performance evaluation indices considering the possibility of changing the supply or demand pattern and making suitable decisions accordingly.
• Investigating the demand pattern in various time periods and the possibility of presenting a supplementary model for the probability mode of demand.
• Investigating the profit from waste recycling.
• Investigating the benefits of the brand’s mental image in terms of compliance with environmental issues.
• Considering production issues in the supply chain and distribution system.
• Including the demand of the different classes of customers in the distribution system and locating facilities; accordingly, in other words, assessing the effect of marketing decisions on the strategic macro-decisions of facility location.
• Considering other location benchmarks.
• Determining the order supply deadline for all sorts of goods orders and programming to supply them within the deadline and its effect on facility location problems.
• Considering other objective functions like social aspects, employment rates, and environmental impacts according to the priorities of managers and decision-makers.

Author Contributions

Data availability statement, conflicts of interest.

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Khalilzadeh, M.; Antucheviciene, J.; Božanić, D. A Bi-Objective Model for the Multi-Period Inventory-Based Reverse Logistics Network: A Case Study from an Automobile Component Distribution Network. Systems 2024 , 12 , 299. https://doi.org/10.3390/systems12080299

Khalilzadeh M, Antucheviciene J, Božanić D. A Bi-Objective Model for the Multi-Period Inventory-Based Reverse Logistics Network: A Case Study from an Automobile Component Distribution Network. Systems . 2024; 12(8):299. https://doi.org/10.3390/systems12080299

Khalilzadeh, Mohammad, Jurgita Antucheviciene, and Darko Božanić. 2024. "A Bi-Objective Model for the Multi-Period Inventory-Based Reverse Logistics Network: A Case Study from an Automobile Component Distribution Network" Systems 12, no. 8: 299. https://doi.org/10.3390/systems12080299

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