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SupplyChainCaseStudy:theDefinitiveGuide

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SupplyChainCaseStudy:theDefinitiveGuide
Professionalsinsupplychainmanagementusevariousmethodsto
identifybestpracticestoimprovetheoperations.Analysisofcase
studyiscertainlyoneofthemostpopularmethodsforpeoplefrom
businessmanagementbackground.Inordertoacceleratethe
learning,thisarticlehasgathered30mostsoughtaftersupply
chaincasestudies,analyzed/categorizedthembyindustryandthefindingsarepresented.

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AerospaceIndustryischaracterizedbyhighmaterialcosts(about6580%).Manufacturing
systemsandregulatorycomplianceareconsideredtobeverycomplex,coupledwiththe
limitednumbersuppliersduetothehighbarrierstoentry.Moreover,theaircraft
manufacturershavetodowhateverittakestowintheorderlongbeforethe
commencementofproduction.
TherearetwothingsBoeingandAirbushaveincommon,utilizationofleanmanufacturing
systemandstrategicsourcingconcept.However,theoverallimplementationofstrategic
sourcingisabitdifferentbetweenthetwocompanies.

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BoeingandAirbusSupplyChainStrategy

Boeingwantstoencouragemoreflightfrequencyanddirectrouteusingasmallercapacity
aircraft.Thentheydecidetooutsourcemanythingssuchasthedesign,testingand
productionofkeycomponentstokeyindustrialpartnersandtrytoreducenumberof
componentsthatgotoassembly.Theultimategoalistofinishthefinalproductionprocess
within3days.
Airbustakesabitdifferentmarketingapproach.Theywanttoutilizehighcapacityairplane
tohelpairlinesdrivetheoperatingcostdown.Theydecidetoselectivelyoutsourcethe
productionofpartsandkeepthedesignandproductionofkeycomponentsinhouse.

SupplyChainoffashionindustryinvolvesatimebasedcompetition.Manycustomershave
theuniqueproductneedsbutacompetitionisveryfiercebecauseofthelowbarriersof
entry.Manynewplayerstrytoofferspecializedproductstocustomersallthetime.This
sectionfeaturesthesupplychaincasestudiesofH&M,Benetton,Zara,Adidas,Louis
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VuittonandMarks&Spencer(M&S).
2.1)H&Maimstobethepriceleaderinthefashionmarket.Inordertomaterializeitsvision,
H&Mtriestoeliminatethemiddlemeninvariousstagesofsupplychainandconsolidatethe
buyingvolumes.Productdesignisalsothecentralpartofitsstrategies.Theydon'ttryto
followthehighfashiondesignsbuttrytoadoptthestreettrendswhichareeasierto
produce.
Theydon'tinvestinproductionfacilityatallbecausetheyutilizeanetworkofnearly700
supplierslocatedinAsiaandEurope.Theyalsodon'townanystoresbecausetheychoose
torentthespace.Inordertocontrolitssupplychain,theyuseacentralwarehouseto
Germanytoreceiveandshipproductstolocaldistributioncentersindifferentcountries.
Attheendoftheday,theycanbringproductstomarketwithin23weeks.
2.2)Benetton,incontrast,choosestohaveafullcontrolofitsproductionbutallowits
licenseestooperatethestoressotheycanfocusonproductionandqualitycontrol.The
reasonisthattheywouldliketocreatetheworldwidebrandawareness.
Forfastmovingproducts,theyusetheproductionfacilitiesinEurope.Asiansupplierswill
performproductionforstandardizedproducts.
2.3)Zaraisveryfamousforitstimebasedstrategy.Inordertolaunchanewproductwithin
15days,Zarausesasmalllotproduction.Anewproductwillbetestedinpilotstores.If
productsalesisgood,alargerbatchwillbeordered.Otherwise,remainingproductswillbe
removedfromtheshelvesandsoldasmarkdowninotherstores.Thiscreatesthe
perceptionamongconsumersthatZara'sproductsareuniqueandyouhavetotakeitwhile
stocklasts.
VerticalintegrationcontributestothesuccessofZara,theyownthemajorityofits
productionfacilitiesandstores(thisisthereasonwhyQuickResponsecanbeeffectively
implemented).Itsautomateddistributioncentersarestrategicallylocatedbetweenthe
centerofpopulationssoproductsaredeliveredtostoresquickly.
ZaraalsoworkswithAirFrance,KLMCargoandEmiratesAirinorderthatthey
cancoordinatedirectlywiththeairlinestomaketheoutboundshipmentstoitsstoresand
bringbacksomerawmaterialsandsemifinishedmaterialswithreturnlegs.
2.4)Adidascopeswithchangingcustomers'demandbyadoptingMassCustomization
strategy.Thewholeideaistodevelop,marketanddelivertheproductvarietythatmost
customerswillfindwhattheywant.
Thefirststepstowardsmasscustomizationistostrategicallyoffertheproductchoices.Too
fewvariationswilldisappointacustomerbuttoomanyvariationswillsimplypostponea
buyingdecision.
Afterthat,Adidasasksthesamekeysupplierstoproducecustomcomponentsinorderto
achievetheeconomyofscale.
Inordertocompensatealongwaitingtime,Adidasusesairfreightorcourierservice.The
reasonwhytheycandothisisthatcustomizedproductsaresolddirectlytocustomersso
theyhavethehigherprofitmargintocompensatethehighertransportationcost.
2.5)LouisVuittonisoneofthelargestluxurybrandintheworld.Inthepast,theysupplied
productstodepartmentstores.Inordertocreatethebetterbuyingexperienceandcontrol
counterfeitingproducts,theyestablishtheirownstoresinhighendshoppingmalls.Having
ownstoresmeantheycanhavebetterunderstandingaboutbuyerbehaviorsotheycan
adaptmorerapidly.
2.6)Marks&Spencer(M&S)isoneofthebiggestfashionretailersfromUK.Otherthan
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fashionitems,theyalsosellfooditemsandhomeproducts.
TheprimaryfocusofM&Sisalwaysacostreduction.Forexample,theyaskeachsupplier
todevelopsamplesforallrangeoffashionitemssotheycandecidewhichitemstheywill
orderfromwhom.Thedelayinthedevelopmentofsamples,testing,sampleapprovaland
finaldecisionmakingcausesaverylongtimetomarket.Asaresult,they'reabletorespond
totherapidchangeinfashionindustry.However,theychangesomeofsourcingprocessas
below,
CloseitsproductionfacilitiesinUKandusesuppliersinAsiaorEasternEurope
Insteadofaskingsupplierstoproducetheitemsexclusivelyforthem,nowtheyallow
supplierstoproduceitemsforotherretailerstoo.Then,suppliersdon'thavetoprovidea
dedicatedproductionfacilitywhichresultsinnoinvestmentcost.Usingcommonraw
materialsalsohelptoreducecostdrastically
Assessthecapabilityofeachsupplierandreducenumberofsuppliers
Asklowcostproducerstomakestandarditemsandaskcapablesupplierstomake
innovativeproducts
ReducenumberofSKUsandpaymuchattentionto500bestsellingitems
Supplychainstrategyofthefashionretailingindustryissummarizedasbelow,

SupplyChainStrategyinFashionRetailingIndustry

FMCGindustryistypicallytheproductssoldtocustomersatalowcostandwillbe
completelyconsumedwithin1year.Thenatureofthisindustryistheshortproductlife
cycle,lowprofitmargin,highcompetitionanddemandfluctuation.Thissectionwillpresent
thecasestudiesofP&G,Unilever,CocaColaandL'Orealrespectively.
3.1)P&G:forecastingandnewproductintroductionhasalwaysbeentheissuesformany
FMCGcompanies,P&Gisnoexception.Tocopewiththis,P&Gconductsamerchandise
testingatthepilotstorestodeterminethecustomer'sresponsetonewproductbeforethe
launch.Theresultisthattheforecastaccuracyisimprovedbecauseademandplannerhas
anadditionalsourcedatatomakeabetterdecision.Moreover,productscanbeshippedto
storesintimethenlostsalesisminimal.
3.2)UnileveralsofeelsthatthecompetitioninFMCGindustryhassignificantlyincreased.
Theyhavetolaunchthenewproductsonregularbasisbuttheforecastingofnewproduct
isdifficult.Sotheycreateabetterclassificationofnewproducts(base,relaunch,repack,
new)usingaregressionmodeltoidentifypotentialforecasterrorsforeachtypeofnew
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product.
3.3)CocaColadoesn'treallyhavemanystockkeepingunitswhencomparedwithother
companiesinthesameindustry.However,productsgotoover2.4milliondeliverypoints
throughover430distributioncenters.Managingtransportationatthisscaleistheabsolute
challenge.
Inordertostreamlinethedelivery,CocaColaimplementedavehicleroutingsoftware.The
reasonisthatisthesoftwarevendorhasaverygoodrelationshipwithCocaCola'slegacy
ERPsoftwarevendor.Moreover,thevendorhasasolidconnectionwiththeuniversitywho
canhelptodevelopthealgorithmthatfitsinwiththebusiness'needs.Theresultisthat
transportationplannersateachdistributioncentercanusethenewtooltoreducetravelling
time/distanceondailybasis.
Toexpanditsglobalfootprint,CocaColacreatesaglobalsupplychainthrougha
franchisingmodel.Theyonlyproduceskeyrawmaterialssuchasbeveragebasesand
syrupsthentheserawmaterialswillbesoldto300bottlingpartnersthroughouttheworld.
Then,franchiseesineachareamakethefinalproductsbyaddingwater,sweetenersand
carbonate.Thenfinishedproductswillbesoldviatheretailingpartners.Fromitsinception
asalocalcompanyinAtlanta,CocaColahasnowbecomeoneofthebiggestmultinational
companiesintheworld,thankstothefranchisingmodel.
3.4)L'Orealisoneoftheworld'sbestcosmeticsbrandwith41factoriesacrossthe
countries.Tospeeduptherevenuegrowthinmajormarkets,theyacquireotherbrandsas
below,
MaybellineNewYorkforexpansionintheUS
YueSaiforexpansioninAsia
MininurseforexpansioninChina
TheyalsoestablishtheR&DfacilitiesinChicagoandShanghaisotheycanunderstandand
developproductsthatcustomerslove.

Leanmanufacturingconcepthasbeenimplementedwidelyintheautomotiveindustryso
thecasestudiesaboutleanmanufacturingisveryreadilyavailable.Duetotheincreasing
competitionintheautomobileindustry,carmanufacturershavetolaunchanewmodelto
themarketmorefrequently.ThissectionwillshowyouhowBMWmanagesalongterm
planning,howFordappliesleanconcepttothenewproductdevelopment,howHyundai
managestheproductionplanning/controlandhowVolkswagenGroupusemodulardesign
tocutcost.
4.1)BMWusesa12yearplanninghorizonanddividesitintoanannualperiod.Afterthat,
theywillmakeanannualsalesforecastforthewholeplanninghorizon.Afterthedemandis
obtained,theydividesalesinto8marketandthenselecttheappropriateproductionsites
foreachmarket,consideringoverallcapacityconstraintsandtotalcost.Asyoumaynotice,
thiskindofalongrangeplanninghastobedonestrategically.
4.2)Fordcallsitsproductdevelopmentsystemas"workstreams"whichincludethebody
development,enginedevelopment,prototypingandlaunchprocess.Thecrossfunctional
teamaretheexpertsandtheirrolesaretoidentifykeyprocesses,people,technology
necessaryforthedevelopmentofnewprototype.
Eachworkstreamteamisresponsibletodeveloptimelineofeachprocess.Detailedplan
isusuallypresentedonA3sizedpaper.Theyclearlyidentifyingcurrentissuestheyare
facingwithsupportingdata,drawingsandpictures.Onweeklybasis,theyorganizea
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biggroupmeetingofallworkstreamteamtodiscussthecoordinationissues.
4.3)Hyundaideploysacentralizedplanningsystemcoveringbothproductionandsales
activitiesacrossthefacilitiesandfunctionalareas.Theydevelopa6monthmaster
productionplanandaweeklyandadailyproductionscheduleforeachmonthinadvance.
Duringashorttermplanning(lessthanonemonth),theypaymuchattentiontothe
coordinationbetweenpurchasing,productionandsales.Providingalongtermplanning
datatoitssuppliershelptostabilizeproductionofitspartmakersalot.
4.4)VolkswagenGrouphasthegoaltooffersafebutattractivecarsconsistsofabroad
rangeofproductcategoriessuchas,
SportycarssuchasAudiandLamborghini
ValuecarssuchasVolkswagen,SkodaAuto,BentleyandBugatti
However,eachbranddesignsandoperatesindependently.Inordertoreduceoverallcosts,
VolkswagenoutsourcesmanycomponentsfromsuppliersinIndia.Later,theyadoptthe
"modular"conceptsuchas,
Transversecomponentforsmallcars
Longitudinalcomponentformediumsizedcars
Rearcomponentforrearenginecitycars
Thisenablesthemtodrivetheeconomyofscalemuchbetter.

Lifecycleoftechnologyproductsisgettingshorterandshortereveryday.UnlikeFMCG,the
launchofanewproductinthehitechindustryrequirestheinvestmentinresearchand
developmentquiteextensively.Then,apoorplanningwillresultinamassiveloss.This
sectionwillcoverJITandoutsourcingbyAppleInc,SupplyChainRiskManagementby
CiscoSystem,TechnologyRoadmapbyIntel,SupplyChainNetworkModelbyHP,Mass
CustomizationbyDell,QualityManagementbySamSungandglobalsupplychainstrategy
atWhirlpoolCorporationandHaier.
5.1)AppleInc:SteveJobsinvitedtheTimCooktohelptoimproveApple'sSupplyChainin
1998.JobstoldCookthathevisitedmanymanufacturingcompaniesinJapanandhe
wouldlikeCooktoimplementtheJITsystemforApple.JobsbelievedthatApple'supply
chainwastoocomplexthenbothofthemreducedthenumberofproductavailabilityand
created4productssegment,reducedonhandinventoryandmovedtheassembling
activitiestoAsiasotheycouldfocusondevelopingthebreathtakingproductsthatpeople
wantedtobuy.
5.2)CiscoSystemswouldliketobethebrandofcustomerchoicesotheyimplementavery
comprehensivesupplychainriskmanagementprogrambyapplyingbasicriskmitigation
strategies,establishingappropriatemetrics,monitoringpotentialsupplychaindisruptionson
24/7basisandactivateanincidentmanagementteamwhenthelevelofdisruptionis
significant.
5.3)Intel'snewproductdevelopmentisdonebytheprocesscalledTechnologyRoadmap.
Basically,it'sthesharedexpectationsamongIntel,itscustomersandsuppliersforthefuture
productlineup.
Thefirststeptopreparetheroadmapistoidentifytheexpectationsamongsemiconductor
companiesandsuppliers.Thentheyidentifykeytechnologicalrequirementsneededtofulfill
theexpectations.Thefinalstepistoproposetheplantoafinalmeetingtodiscussabout
thefeasibilityofproject.Someconcerningpartiessuchasdownstreamfirmsmaytrytoalter
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someaspectsoftheroadmap.TechnologyRoadmapallowsInteltoshareitsvisiontoits
ecosystemandtoutilizenewtechnologyfromitssuppliers.
5.4)HP'scasestudyisprettyunique.Theyfacewithabasicquestion,wheretoproduce,
localizeanddistributeproducts.Itssimplesupplychainnetworkmodelispresentedbelow,

Fromthisexample,only3possiblelocationsresultin5differentwaytodesignthesupply
chain.Inreality,HPhasmoreproductionfacilitiesthantheexampleabovesothereareso
manyscenariostoworkwith.HowshouldHPdecidewhichkindofasupplychainnetwork
configurationtheyshouldtaketoreducecostandincreaseservicetocustomer?The
answeristhattheyusethemultiecheloninventorymodeltosolvetheproblem.
5.5)Dellisoneoftheclassicsupplychaincasestudiesofalltime.Manyindustriestryto
imitateDell'ssuccess.ThekeyingredientsofDell'ssupplychainarethepartnershipwith
suppliers,partmodularity,vendormanagedinventoryprogram,demandmanagementand
masscustomization.Also,youcanfindthesimplifiedprocessmapofDell'sordertocash
processasbelow,

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Dell'sOrdertoCashProcess

5.6)SamSunghasproventobetheforcetobereckonedwithinthehitechindustry.The
secretbehinditssupplychainsuccessistheuseofSixSigmaapproach.Theystudiedhow
GeneralElectric(GE),DuPontandHoneywellimplementedsixsigma.Afterthat,theyhave
createdtheirownimplementationmethodologycalledDMAEV(define,measure,analyze,
enable,verify).TheyusethegloballevelKPItoensurethateachplayerinthesamesupply
chainismeasuredthesameway.Also,theyutilizeSCORModelasthestandardprocess.
Anyprocesschangeswillbereflectedthroughanadvanceplanningsystem(APS).
5.7)WhirlpoolCorporationforeseesthatappliancessuchaswashingmachinearethe
standardizedproducts.Soit'sessentialtoentertheglobalmarketsoproductionprocess
canbestandardizedandeconomyofscalecanbeachieved.Inordertoimplementthis
strategyWhirlpoolacquiresamajoritysharesinanIndiancompanyandcreate4joint
venturesinChina.ThiskindofinvestmentenablesWhirlpoolstounderstandthelocal
buyingbehaviorsthroughtheexperiencesoflocalJVpartnersmorerapidly.Moreover,they
don'thavetobuildabrandnewsupplychaineverywheretheygobecausetheycanutilize
theexistinginfrastructurethatJVpartnersalreadyhave.
5.8)HaierisoneoftheworldleadingappliancemanufacturersfromChina.Duetothelevel
ofcompetitioninhomemarket,theybelievetheyhavetoexpandtoforeignmarketto
increasetherevenue.TheirGoGlobalstrategyistofocusonthemostdifficultmarket,
namely,theUnitedStates,EuropeorJapan.Thereasonsarethat
Theywanttoforcethemselvestolearnmoreabouttechnologyinmoresophisticated
market
PeoplewhousedtoliveinthedevelopingcountrieswillrecognizeHaier'sbrand.When
theymovebackhome,theywillspreadthewordsinlocalmarket
ThentheydecidetobuildaproductionfacilityinSouthCarolinaandgainabigmarketshare
intheUnitedStates

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Thelastindustrycoveredhereisthegeneralmerchandiseretailingindustry.Thecritical
successfactorofthisindustryistounderstandthedriversofconsumerdemand.Fourcase
studieswillbepresented,namely,711,Tesco,Walmart,Amazon,Zappos,Carrefourand
Ikea.
6.1)7/11isanotherpopularcasestudyinsupplychainmanagement.Theintegrationof
informationtechnologybetweenstoresanditsdistributioncentersplaytheimportantrole.
Sincethesizeof7/11storeisprettysmall,it'scrucialthatastoremanagerknowswhatkind
ofproductsshouldbedisplayedonshelvestomaximizetherevenue.Thisisachieved
throughthemonitoringofsalesdataeverymorning.Salesdataenablesthecompanyto
createtherightproductmixandthenewproductsonregularbasis.
7/11alsousessomethingcalledcombineddeliverysystemakacrossdocking.The
productsarecategorizedbythetemperature(frozen,chilled,roomtemperatureandwarm
foods).Eachtruckroutestomultiplestoresduringoffpeaktimetoavoidthetraffic
congestionandreducetheproblemswithloading/unloadingatstores.
6.2)TescoisoneoftheprominentretailstoresinEurope.SinceUKisrelativelysmallwhen
comparedwiththeUnitedStates,centralizedcontrolofdistributionoperationsand
warehousemakesiteasiertomanage.Theyusethebiggertrucks(withspecial
compartmentsformultitemperatureproducts)andmakealessfrequentdeliverytoreduce
transportationcost.Definitely,theyuseacomputerizedsystemsandelectronicdata
interchangetoconnectthestoresandthecentralprocessingsystem.
6.3)WalMart's"EveryDayLowPrices"isthestrategymentionedinmanytextbooks.The
ideaistotrynottomakethepromotionsthatmakethedemandplungesandsurgesaka
bullwhipeffect.
WalMarthaslessthan100distributioncentersintotalandeachoneservesaparticular
market.TomakeadecisionaboutnewDClocation,Walmartuses2mainfactors,namely,
thedemandintheproposedDCareaandtheoutboundlogisticscostfromDCtostores.
Costofinboundlogisticsisnottakenintoaccount.
Thereare3typesofthereplenishmentprocessinWalMartsupplychainnetworkasbelow,

WalMartReplenishmentProcess

Incontrarytogeneralbelief,Walmartdoesn'tusecrossdockingthatoften.About20%of
ordersaredirecttostore(forexample,dogfoodproducts).Another80%ofordersare
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handledbybothwarehouseandcrossdocksystem.
WalMarthasoneofthelargestprivatefleetintheUnitedStates.Thedeliveryismade50%
bycommoncarriersand50%byprivatefleet.Privatefleetisusedtoperformthebackhauls
(picksupcargoesfromvendorstoreplenishDCs+sendsreturnedproductstovendors).
Shorthauls(lessthanoneworkingdaydrive)isalsodonebytheaprivatefleet.Forlong
hauls,thecommoncarrierswillbeused.
Thereare2maininformationsystemdeployedbyWalMart."RetailLink"isthe
communicationsystemdevelopedinhousetostoredata,sharedataandhelpwiththe
shipmentroutingassignments.
Anothersystemiscalled"Inforem"fortheautomationofareplenishmentprocess.Inforem
wasoriginallydevelopedbyIBMandhasbeenmodifiedextensivelybyWalMart.Inforem
usesvariousfactorssuchasPOSdata,currentstocklevelandsoontosuggesttheorder
quantitymanytimesaweek.
LevelofcollaborationbetweenWalMartandvendorsisdifferentfromonevendortothe
other.SomevendorscanparticipateinVMIprogrambutthelevelofinformationsharingis
alsodifferent.VMIprogramatWalMartisnot100%onconsignmentbasis.
6.4)Amazonhasaverygrandbusinessstrategyto"offercustomerslowprices,
convenience,andawideselectionofmerchandise".Duetothelackofactualstorefront,
thelocationsofwarehousefacilitiesarestrategicallyimportanttothecompany.Amazon
makesafacilitylocationsdecisionbasedonthedistancetodemandareasandtax
implications.
With170millionitemsofphysicalproductsinthevirtualstores,thebackendoforder
processingandfulfillmentisabitcomplicated.Anyway,asimplifiedversionoftheorderto
cashprocessareillustratedasbelow,

Amazon'sOrdertoCashProcess

Uponreceiptoftheorders,AmazonassigntheorderstoanappropriateDCwiththelowest
outboundlogisticscost.
InAmazon'swarehouse,thereare5typesofstorageareas.LibraryPrimeStorageisthe
areadedicatedforbook/magazine.CaseFlowPrimeStorageisfortheproductswitha
brokencaseandhighdemand.PalletPrimeStorageisfortheproductswithafullcaseand
highdemand.RandomStorageisforthesmalleritemswithamoderatedemandand
ReserveStoragewillbeusedforthelowdemand/irregularshapedproducts.

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Amazonusesanpropitiatorywarehousemanagementsystemtomaketheputaway
decisionandorderpickingdecision.
Aftertheordersarepickedandpacked,Amazonshipstheordersusingcommoncarriers
sotheycanobtaintheeconomyofscale.OrderswillarriveatUPSfacilitynearadelivery
pointandUPSwillperformthelastmiledeliverytocustomers.
AmazonisknowntouseSalesandOperationsPlanning(S&OP)tohandlethesales
forecast.Anyway,thismustbeS&OPprocessatproductfamily/categorylevel.
6.5)Zappos:tocompetewithotheronlineretailers,Zappospaysmuchattentiontotheway
theyprovidetheservicestocustomers.Insteadoffocusingonthecallcenterproductivity,
Zapposencouragesitsstafftospendtimesoverthephonewithcustomersaslongasthey
cansotheycanfullyunderstandthecustomer'srequirements.Theyalsoupgradethe
deliveryfrom3daysto1daydeliveryinordertoexceedcustomerexpectation.
6.6)CarrefourseestheexpansionopportunitiesinChinathentheyestablishthefirst
hypermarketinBeijing.ThemostinterestingpointaboutCarrefouristhelocationstrategy.
Insteadofusingmathematicalmodel,theyuseasimplesectionprocessasbelow,
Pickthelocationattheintersection(CarrefourinFrenchmeanscrossroad)sotheycan
ensurethattheycangethightrafficarea
Choosethelocationwithin8kilometerradiusfromthemajorbusride
Asktheindependentinvestigatorstocollectdataaboutpurchasingpotentialandbuying
behavioroflocalpeopleatpotentialstorelocations
6.7)Ikeaalsohavetheirownstoresfordifferentreasons.Theiruniquesellingpointsare
productswithgooddesignatlowerprices.Todrivecostdown,Ikeashiftssomeoftheir
activitiestocustomersorselfserviceoperatingmodel.Forexample,theymakeiteasierfor
customerstolocateproductsduringshopping,picktheproducts,checkout,bringing
productsbackhomeandinstallthefurniture.ThishelpsIkeatoreduceoperatingcostalot.

Allcasestudydemonstratesthatsupplychainmanagementistrulythestrategicinitiatives,
notmerelyacostcuttingtechnique.Leadingcompanieshaveaverystrongcustomerfocus
becausealmostallofinitiativesaresomethingtofilltheneedsofcustomers.
Relationshipmanagementistheunsungheroinsupplychainmanagement.It's
theprerequisitetothesuccessofeverysupplychain.Andattheendoftheday,itcomes
downtothequalityofsupplychainpeoplewhoanalyze,improveandcontrolsupplychain
operations.

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