• April 26th, 2016

Creating a European Logistic Strategy

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Objective
The purpose of this assignment is to demonstrate your knowledge of the topics covered throughout this course as well as to illustrate how the topics can be applied using examples of best practices in logistics & SC operations.

Case Study: Creating a European Logistic Strategy
The ABC Company is a long-established company with a corporate brand name that is recognized world-wide. Its declared mission is to achieve leadership in the following categories: Men’s and women’s grooming products, deodorants antiperspirants, writing instruments, dental care and small electrical appliances. The corporate strategy is to run the business on a global basis maximizing the power of its well-established brands. To quote the Chairman of the company: “We sell the same products world-wide … we treat all markets the same… when people shop they do not think very differently from Americans.” Even though there was still recognition of local requirements and differences in demand, the intention was to build a global business around a common approach with respect to the development and marketing of company products around the world.
You have been appointed to the position of supply chain manager for ABC Company. How would you go about developing a supply chain strategy for this company?
When you joined the company you found that despite the company’s commitment to a global marketing strategy there was a lack of integration of its logistics management, particularly across Europe. Responsibility for logistics was very fragmented with localized manufacture and distribution management. A European HQ had been established in London, but decisions on everything from inventory levels to purchasing decision were made locally (Figure 1). There were 13 warehouses across all Europe carrying virtually identical stock, except packaging varied locally.
Even allowing for this entire inventory, service level to retail customers was low. Order fill averaged only 78%, and the order cycle time varied from five days to more than 20 days. Service performance was increasingly important as European retailers continued to grow their purchasing power and to place ever greater demands for service on their suppliers. Many of the markets in which ABC competed were highly volatile with high levels of promotional activity requiring special promotional packs or over-wraps.

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