Guidelines Written Case Analysis (Post under Assignments): Each case analysis is to be no more than five pages in length. HOWEVER, PLEASE NOTE THAT IN ORDER TO DO A DECENT WRITE-UP, YOU SHOULD SHOOT FOR NO LESS THAN TWO PAGES. The case analysis should be single-spaced with 1\" margins all around, 12-point Times New Roman font, neat, and grammatically correct. It should be in paragraph format. Inclusion of supporting tables and figures is encouraged. These tables/figures can be in addition to your write-up. You are encouraged to find more than two viable, distinguishable alternatives. Be creative, but ground it solidly in logic and the material from class. Make sure your analysis has a good structure and smooth transitions from one section to the next (e.g. SWOT Core Issue/ sub-issues specific recommendations barriers). Don't mix issues and solutions all together, have a separate section for each maintaining a clear correspondence between issues and proposed solutions. Use available numbers to support your ideas when appropriate. State your assumptions if necessary. Make sure to differentiate your recommendations taking into account customer segmentation (e.g. ACME case), regional specificity or other important details. Case Presentation: The summarized presentation of the analysis should include the following: o A brief discussion of situation (using tools like SWOT Analysis) and the CORE problem in the case scenario. Please DO NOT simply restate a bunch of case facts in this section. This is your opportunity to highlight what you believe is the fundamental issue of the case. THINK DEEP!!! The problems discussed in the case scenario are often simply symptoms of some larger issue.....dig deep for the larger core problem! Sometimes it is useful to create a graphical hierarchy of issues, highlighting the underlying issues that are unique for each case. o Examples of symptoms of the CORE problem...how has this core issue shown its face. (Be brief here....again, please don't restate a bunch of case facts.....just a brief discussion of how the CORE problem has manifested itself). o You should then discuss (not just list, but discuss) at least TWO viable and distinguishable alternatives to address what you highlight as the core issue. MAKE SURE THAT THE ALTERNATIVES ADDRESS THE ISSUE YOU'VE IDENTIFIED. Also, please note, STATUS QUO IS NOT CONSIDERED AN ALTERNATIVE...something has to change. Please do not assume that the actions taken in the case description are RIGHT or are CONFINING...think creatively...go beyond the case description (use and Cite additional sources if needed). o Then, you should make a clear statement as to which of the two alternatives you choose, with brief justification. o Finally, discuss how the firm should implement the alternative you've selected. Be thorough. Yet, be mindful of your page limitations. What are some of the issues the firm may encounter when implementing? The summary of your analysis should be posted as a short PowerPoint presentation (up to 5 slides). ACME COMMUNICATIONS Because logistics management is a flow-oriented concept with the objective of integrating resources across a pipeline which extends from suppliers to final customers, it is desirable to have a means whereby costs and performance of that pipeline flow can be assessed. SWOT, Forecasting model, ATC, Department store, Mass Merchants. Creating a competitive advantage through logistics. Traditional approach of selling telecommunication subcomponents and equipment mainly through Amalgamated Telecom (ATC) which is a giant telecommunication monopoly. Changing conditions in the environment involving the sales of a line of consumer goods through large chain department stores and mass merchants. Department stores and purchases STRENGTHS - Quality established through reputation. Department store purchasing the full line and maintain established price structures. Mass merchants take only high volume consumer products, but move them in significant volumes. Mass markets also hold the key to growth as they attracted larger shares of consumer business. Department stores hold adequate safety stock and have cycle replenishment of 5 to 7 days. ATC uses standard order quantities and carries the entire like and are the least demanding segment of the industry which also mean they have the lowest service standard and are easy to keep happy, plus hold good amounts of safety stock. Back order performance was better than average, always being filled even if it took a few months. WEANESSES - ATC has stopped growing and Department stores only grow slowly. Mass Merchants is the most demanding in the industry, not coordinating with ACME with promotions, not holding any sort of safety stock, needing 24 to 48 hour order cycle replenishments. Issues of on-time delivery, order accuracy, and invoicing problems. Confusion on the reverse logistics of items that had to be returned resulting from shipping errors. Using a telephone or fax purchase order system received from sales representatives. OPPORTUNITIES - Engaging in more severe promotional campaigns. Selling straight to the customer. Lower the safety stock in ATC and raise the safety stock with mass merchants. Advance technology in the purchase order system that could possibly take out the need for sales representatives in the order process with easy to use ordering systems that sent receipts and conformations. Mass merchant competitors have not yet complied to the costly change in packaging systems that complied with the bar code requirements, leaving the door for ACME to continue to take a larger hold of its fastest growing industry. THREATS - New competitors' recognized as having equal quality products as a significantly lower price. Low priced imports began to saturate the consumer market. Smaller competitors offering more reliable inventory delivery times, partly due to the smaller amount of products offered. CORE ISSUE - Slipping reliability of orders: LOCAL, due to ACME's dispatching; NATIONAL, due to the performance of the carriers that ACME was using. - Large products lines caused the reliability of inventory to slip to around having 80% of items in demand to form stock on hand Customers express annoyances about ACME's ordering systems with frequent errors in recording/filling orders, and no confirmation of the orders being received. Mass merchants wanting packaging to include a non reflective bar coding system on the packages themselves, resulting in an extremely costly change if done so. SUB-ISSUES - Mass merchants operating on weekly order cycles based on actual sales resulting in 24 to 48 hour order cycle replenishment and no safety stock. - Customers would also not coordinate and sales promotions or forecasts with ACME logistics resulting in the promoted items being out of stock. On-time deliveries, order accuracy, and invoicing problems. Lack of conformation of orders; either being late or not being received at all Not knowing if the bar code packaging investment would justify the costs SPECIFIC RECONMENDATIONS BARRIERS BY THE NUMBERS ATC - Holds the highest gross margin with the information provided, they may be the slowest in growth, or even halted in it but they save on shipping costs per year due to their monthly ordering processes, carry the entirety of the line, and hold extra stock in warehouses allowing for the longest inventor restock time. Dept. Stores - Second highest gross Margin effected by mostly their by weekly inventory orders. ACME COMMUNICATIONS EQUIPMENT, INC. The director of logistics at ACME Communications was examining the results of a customer survey concerning the quality of logistics service. He had been asked by the VP of Strategic Development to make recommendations regarding how logistics capabilities may enable the firm to derive a competitive advantage. ACME was a producer of telecommunications equipment and subcomponents, ranging from telephone answering machines and related peripherals sold in consumer channels to highly complex make-to-order components sold to major OEM's. Their reputation as a quality supplier was well established. Business strategy at ACME had followed a traditional approach, selling telecommunications subcomponents and equipment mainly through Amalgamated Telecom (ATC), the giant ex-telecommunications monopoly. The telecommunications environment, however, had changed over the years. Within the last 20 years, ACME had established a line of consumer goods sold through large chain department stores and mass merchants. Department stores purchased the full consumer product line and maintained established price structures. Mass merchants took only high-volume consumer product lines but moved these in significant volumes. They asked for substantial discounts on cumulative quantity purchases. The volume of business with ATC had held steady, while that of the department stores had grown slightly. Mass merchants held the key to growth as they were getting a larger share of consumer business. The competition had also changed. Some new competitors were recognized as having equal quality products at a significantly lower price. ACME had responded, not by matching prices but by engaging in promotional campaigns. There also had been a flood of low-priced imports that were beginning to saturate the consumer market. ACME dealt directly with the retail buyers for department stores and mass merchants. Buyers, particularly for the mass merchants, were extremely conscious of logistics service. Mass merchants operated on weekly order cycles and managed inventory by responding to actual sales rather than maintaining excessive inventory safety stock targets. As a result, they expected very short order cycle replenishment times - often 24 to 48 hours. To further complicate the situation, the customers arranged their own special promotions and seldom communicated the schedules to ACME's logistics department. This often resulted in out of stock situations for the promoted items. They also sought direct ordering from their computers to ACME's computers. The department stores were on a two-week order cycle and maintained adequate safety stock levels in their own distribution centers as backup to their stores. Thus, order cycle replenishment time expectations were longer, ranging from 5 to 7 days. ATC was the least aggressive member of the industry. It placed orders using standard order quantities on monthly order cycles. ATC's service expectations were the least demanding since they held large amounts of safety stock to cover variances in their demand and in supplier lead times. Service standards related to order fill and cycle time for ATC orders were relatively low compared to other customer segments. ACME valued ATC as a customer because it presented the full product line, which the other customers did not do. ACME had commissioned the logistics service survey as a means of understanding the strategic opportunities resulting from improved logistics service quality. Service complaints usually came through the sales force and referred to a variety of logistics problems including ontime delivery, order accuracy, and invoicing problems. The customer service survey was conducted through interviews with select department store and mass merchant buyers. In addition to general comments, questions were asked seeking comparative ratings of ACME versus major competitors on specific aspects of logistics service. The survey covered several specific aspects of logistics service: delivery time; inventory This case study is adapted from Carlton Electronics, written by Professor Martin Christopher of the Cranfield School of Management, U.K., and Professor Philip Schary, Oregon State University. reliability (fill rate); order status communication and ordering procedures; advertising and promotion; and packaging and labeling. The results of the survey follow. Delivery Time. The largest suppliers were about equal in terms of delivery performance. However, as a group they were not equal to the performance of smaller competitors. ACME's average times were considered to be acceptable, but their performance had slipped in terms of reliability. Customers could not be sure when their orders would arrive. On a local basis, this was caused by ACME's local delivery dispatching. At a national level, it was due to the performance of the carriers that ACME was using. Inventory Reliability. ACME was again comparable in inventory reliability performance to its major competitors, fulfilling about 80 percent of item demands form stock on hand. Smaller competitors, with their restricted product lines, tended to do better. ACME's back-order performance was better than average. Customers recognized that back-orders from ACME would always be filled, even if it took a couple of months. When orders were picked there would be occasional errors, which meant that items once shipped had to be returned. This seemed to lead to considerable confusion on ACME's part. Orders. Customers expressed considerable annoyance about ACME's order system. There were frequent errors in recording/filling orders, and there was no confirmation when the order was received. Orders were normally keyed in to the ordering system from purchase orders that were telephoned or faxed in from customers or from sales representatives. Customers expected confirmation of order receipt and compliance, which often took ACME several days to complete, if it was completed at all. In the case of mass merchants, the confirmation was often received after receipt of the actual order itself. Packaging and Labeling. Packaging was an important area but involved conflict. ACME's policy had always been to pack well. Packages were always well labeled. However, the mass merchant buyers had begun to use laser bar code scanners and wanted suppliers to adapt their packages to the new system of item identification, requiring preprinted bar codes on a nonreflective surface. This was extremely costly, and most competitors had yet to achieve the capability. ACME was currently complying, but was unsure if the cost was justified. The following table summarizes some key sales and cost figures for the 3 major market segments. Cost and Activity Summary Sales ($ x 1000) COGS ($ x 1000) Annual Orders (x1000) Total Logistics Cost/Order ATC 500,000 200,000 1,000 $111 Dept. Stores 300,000 120,000 2,500 $150 Mass Merchant Total 200,000 1,000,000 80,000 400,000 100 3,600 $310 This case study is adapted from Carlton Electronics, written by Professor Martin Christopher of the Cranfield School of Management, U.K., and Professor Philip Schary, Oregon State University. Assignment ACME hires you as consultant to analyze their supply chain operation and make general recommendations for improvement Write a maximum 3 page paper: o Describe their biggest issues o What are recommendations to address the issues o What barriers will they face in implementing the recommendation This case study is adapted from Carlton Electronics, written by Professor Martin Christopher of the Cranfield School of Management, U.K., and Professor Philip Schary, Oregon State University