case study on Supply chain decisions
Transcript of case study on Supply chain decisions
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W.W. Grainger & McMaster-Carr are two US based MRO (Maintenance, Repair, and Operating) suppliers
Both firms offer several thousand products and stocks 100000 products.
products available online and in print catalogue.
No manufacturing
(only distribution/ retailer )
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W.W. Grainger
•Several retail stores throughout
US
•Customer can walk into the
store
•call in an order
•place an order through web
They either
• shipped to the customer
or
• picked by the customer at
store
•9DCs
-Replenish orders
-Fill customer orders
McMaster-Carr
•Concentrated on online
•Lack of retail stores
•Ships almost all orders
•DCs
-order filling
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Pre-structural
› Difference in customer needs
› Multi- supplier multi-client system
Uni-structural
› Importance of supply chain decisions in
success
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Multi-structural› Different modes of transport
› Reduction of transportation cost
› Timely delivery
Relational› Internal-external factor analysis
› Calculation of Re-order quantity (EOQ)
Out of box› GPS tracking system
› Computer modeling
› EDI
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W.W. Grainger
Different delivery modes
› Shipping to customer
› Picked by the customer at stores
More DCs to fulfill both the needs
Location :nearer to different retail shops
to reduce transportation cost
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McMaster-Carr
Focused on online orders
Shipment
Large capacity DCs less in number
› to ensure timely delivery
› To cost reduction
› Concentrated towards industrial areas
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W.W. Grainger
Feedback from retail stores helps to forecast the demand of various MRO items
Stock should fulfill both retail and online needs
Certainty in demand to some extend
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McMaster-Carr
Online ordering
flexible demand
Keep a buffer stock of all items
Ensuring timely delivery
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Importance of item (vital)
Availability of item
Demand of the item
Responsibility of suppliers
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Depending on the regional demand
Items having special priorities
Valuable items
Availability and durability
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Timely delivery
Minimum transportation cost
W.W. Grainger
Large number retail stores and DCs
If single DC cant meet the demand, they can go for another DC
Location of backup should be accessible from different points of demand
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McMaster-Carr
Limited DCs
Large inventory
Responsible suppliers
Need of forecast
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W.W. Grainger
Various locations will have different order
demands
For vital products lead time should kept
as minimum
Possess a safety shock to meet
emergency condition
forecasting
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McMaster-Carr
Less number of DC
Quick reordering
Buffer stock
Responsible suppliers
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Integrating both business together is advisable
There is a well established distribution channel already exists
This infrastructure and transportation facilities can be used for both .
It also allows clients to place an order in different ways
It simulates all types of customers
By applying modern techniques they can improve the efficiency of business
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Order fulfillment
Quick delivery
Trucks, railways ,cross docking
stock replenishment
Transportation cost reduction
Geographic obstacles
Alternative modes : ships, railways, road