Supply Chain Management (SCM)

Case Studies on managing supply chains (SCM). How companies have succeeded/failed with their supply chain planning, implementation and more.

Supply Chain Management Case Studies

Supply Chain CasesSupply Chain Management (SCM), in recent years, has received increased attention from both academicians and managers. Managing a supply chain implies the integrated management of a network of entities, that begins with the suppliers' suppliers and ends with the customers' customers, for the production of products and services to the end consumers. Supply chain case studies analyze how companies seek to achieve cost reductions or profit improvements and make the supply chain more competitive as whole.

These cases are intended to provide wide-ranging information, management education, background information and leadership on the most relevant topics in business. Illustration from published and other sources, a case study is carefully designed to offer a highly practical resource for readers with all levels of experience. To assure quality and accuracy each case study is carefully reviewed. A case study is a written or recorded, detailed analysis of some targeted management issues, for the purpose of noting success or failure to used as a benchmark for education, research, and/or planning.

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H&M’s Low-Cost, High-Fashion Supply Chain

Case Study Abstract

The focus of this case study is the supply chain of fast-fashion giant, H&M. H&M – the world’s third-largest retailer by sales – has grown into a profitable force in the global apparel market by offering clothing that is seen as both fashionable and reasonably priced. This case discusses the supply chain management practices of H&M and how it responds quickly to changing fashion trends by renewing its lines. H&M’s logistics, inventory management process, design collaborations, sales channels, online branding and best price strategy are briefly covered.

     

Table of Contents

  1. Introduction – Fast Fashion and Supply Chain Management
  2. Background Note
  3. H&M Quick Facts
  4. Elements of H&M’s Innovative Supply Chain
  5. Double Supply Chain

    6. H&M Supply Chain Management Case Study

  6. H&M’s Three Sales Channels
  7. Logistics
  8. Efficient Central Distribution Center
  9. H&M’s Best Price Strategy
  10. H&M’s rapid reaction supply chain – Flexible Purchasing and the ICT platform
  11. Branding online and the Virtual retail experience
  12. Design Collaborations
  13. ‘The shock of the new’ every day – Building a continuous consumer supply chain
  14. Exhibit I: H&M’s Growth (1974 – 2007)
  15. Exhibit II: H&M’s Global Expansion
  16. H&M Timeline
  17. H&M’s Financial Performance Summary (Revenue and Net Income)
  18. Exhibit VI: Comparison with major global specialty clothing retailers
  19. H&M: Sales Graph by country, 2007
  20. H&M: Store Locations, 2007
  21. H&M: Sales by Country, 2007
  22. Questions for Discussion
Case Study Keywords: Hennes and Mauritz, H&M, Supply Chain Management, SCM, Erling Persson, rapid-reaction, Madonna and Kylie Minogue, Rei Kawakubo, founder of the Comme des Garcons fashion chain, Zara, Gap, Apparel Retailing Case Study, Logistics and Distribution, IT enabled supply chain, supply chain integration, information sharing, inventory management, fast fashion, continuous consumer supply chain, best price strategy, major global specialty clothing retailers, Design Collaborations, sales channels

Case Questions for Discussion

  1. In the past, apparel pipelines in the fashion industry have infamously been long, complex and inflexible. How did H&M improve its buying cycle and responsiveness of its supply chain?
  2. “In modern retailing it is the supply chains that compete rather than companies.” Support this statement using examples from H&M’s supply chain and business model.
  3. Which of the following do you think is the driver of fast fashion that has a distinct impact on the supply chain – the Manufacturer, the Retailer or Consumer Demand?

Case Updates/Snippets

  • Reduced time to market – Photos of fashion shows are available online immediately after a show. This has enabled fast-fashion retailers like Topshop and H&M to cut the time span between catwalk and store. Designs of luxury brands can be interpreted to the general public quicker than before. Earlier, it took months for retailers to interpret designs by luxury labels for the general public. Many designers feel that this has led to shoppers desiring for frequent refreshing of stock.
  • Total Stores & Expansion: As of Aug. 31 2011, H&M had 2,325 stores. H&M plans to expand in China, the U.K., U.S. and Germany. (Update: Feb 24, 2012 – H&M has 2, 500 stores in 43 countries with revenues of around $19 billion. It has approx. 94,000 employees. H&M sources 75% of its products from Asia.
  • H&M Top Management: In 2009, at the age of 34, Karl-Johan Persson took over as CEO from father. His father became the Chairman of the company.

Wal-Mart’s Supply Chain Management Practices

Case Study Abstract

The focus of this case study is the supply chain of the world’s largest retailer, Wal-Mart. Wal-Mart in recent years has struggled with its supply chain. The big question is: Will Wal-Mart be able to revive the competitive advantage it had in the past with its efficient supply chain? This case discusses the supply chain management practices of Wal-Mart over the years. A brief of Wal-Mart’s past distribution, logistics and inventory management processes is covered. The use of innovative Information Technology (IT) practices to enable the supply chain is discussed and highlighted. The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered.

     

Table of Contents

  1. Introduction – Can Wal-Mart sustain its Supply Chain Advantage?
  2. Wal-Mart in US Retail Market
  3. Wal-Mart – Company Background
  4. Wal-Mart – Timeline

    5. Wal-Mart Supply Chain Management Case Study

  5. Wal-Mart: Quick Facts (Revenues, Total Employees and Stores, Competitors, Major Brands/Labels, Business/Growth Strategy)
  6. MANAGING THE SUPPLY CHAIN – THE WAL-MART WAY
  7. Pricing and Procurement Strategy
  8. Supply Chain Integration through Product/Process Knowledge Sharing
  9. Supply Chain Partnerships
  10. Distribution Strategy
  11. Logistics Management
  12. Cross Docking
  13. Inventory Management
  14. Store Formats
  15. Wal-Mart – International operating formats
  16. Related Reading
  17. Questions for discussion
  18. View sample pages of this case study
Case Study Keywords: Wal-Mart, Supply Chain Management, Retailing Strategy Case Study, Logistics and Distribution, IT enabled supply chain, Information Technology, Supply Chain Partnerships, supply chain integration, information sharing, inventory management, retail store formats, cross docking, pricing and procurement, Sam Walton, discount stores, walmart.com.

Case Questions for Discussion

  1. Wal-Mart’s focus on supply chain management is responsible for its leadership in the retail industry. Discuss the distribution and logistics practices adopted by Wal-Mart. How far has Wal-Mart’s supply chain contributed to its competitive advantage? Explain.
  2. Companies that have significant buyer power and are very focused on exerting price pressure on their suppliers rather than seeking increased profitability through business process innovations. Support this statement with examples/best practices from your own field.
  3. Wal-Mart has always used innovative information technology tools to supplement its supply chain. In a few words, explain how use of IT tools/enabled processes have benefited Wal-Mart. How has IT impacted you/your department?
  4. What steps can Wal-Mart take in order to revive/sustain its supply chain advantage?
  5. Wal-Mart invited its major suppliers to develop profitable supply chain partnerships. Discuss how good/bad is sharing knowledge/critical information with vendors/suppliers or even customers?
  6. “It’s not a sale; it’s a great price you can count on every day to make your dollar go further at Wal-Mart.”, as quoted in the article, “Pricing Philosophy,” posted on www.walmart.com. Comment.

Other Case Studies on Wal-Mart

Case Updates/Snippets

  • Wal-Mart’s new slogan – In September 2007, Wal-mart changed its slogan to “Save Money. Live Better.” Wal-Mart’s earlier slogan for 19 years was “Always Low Prices.”
  • Benefits of shopping at Wal-Mart – According to a study by research firm Global Insight, Wal-Mart saves American families $2,500 each year. This figure rose from $2,329 in 2004 by 7.3 percent.
  • Wal-Mart’s new slogan in 2011: Wal-Mart’s latest tagline is “Low Prices. Every Day. On Everything.”
  • Wal-Mart Online – Wal-Mart has 10,000 stores globally with annual revenues of more than $400 billion and 200 million weekly shoppers. According to Internet Retailer, it ranks six as in the largest Internet retailer list. Wal-Mart trails Amazon.com Inc, Staples Inc, Apple Inc, Dell Inc and Office Depot Inc. Wal-Mart does online business in United States, the UK, Canada and Brazil and does not reveal the percentage of online sales. Its digital technology unit called @WalmartLabs targets smartphones and social networking audience.

Dell’s Supply Chain Management Strategy

     

Case Study Contents

  1. Introduction
  2. Dell – Company Overview
  3. Dell Products and Services
  4. Dell – Key Facts – Key Employees, Top Competitors, Revenues, Manufacturing Facilities
  5. Dell Timeline
  6. Dell – Business Segment Information
  7. Dell’s Evolving Supply Chain Strategy
  8. Typical Working of Dell’s Supply Chain
  9. Five key strategies in Dell’s successful Direct Model
  10. A supply chain with old technology is of little value
  11. Restructuring at Dell
  12. New Distribution Channels – Direct Model and Retail Strategy
  13. Integrating the Supply Chain
  14. Related Reading
  15. View sample pages of this case study

Case Study Abstract

The focus of this case study is the supply chain management practices of Dell. Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage.

Can Dell regain its market leader position from HP?

In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Recall of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Industry analysts felt that, with Dell’s competitors also improving their supply chains and matching Dell’s direct model, the company had been losing its competitive edge. Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Though Dell spruced up its product design and range but Apple is clearly far ahead of it. Many experts feel that such new initiatives will only distract Dell from its supply chain operations.

This case study covers the following issues:

  • Examine and analyze Dell’s Direct model, its basic working, success and future challenges
  • Typical Working of Dell’s Supply Chain and future supply chain challenges
  • Highlights Dell’s evolving Supply Chain practices and strategy and steps being taken by it to recapture its lost market leader position
Case Study Keywords: Dell, Direct model, Supply Chain Management, Supply Chain Strategies, Build-to-order model, Inventory optimization, PC Manufacturing, Retail Distribution Channel, HP, Notebook computers, Desktop personal computers, Competitive Business Strategies, Sustaining competitive advantage, Michael Dell, Distribution Strategy, Supply Chain Case Study

Case Snippets/Update
US and Worldwide market share of top PC makers in Q1 2009
Dell’s market share in U.S. and Worldwide (in Q1 2009) compared to other top PC makers

  • In year 2010, PC sales are expected to rise 12.6 percent, according to research firm Gartner.