Read the case carefully and answer the following questions:Marks & Spencer was formed in $1894,$ when Russian immigrant Michael Marks formed a partnership with Tom Spencer. In the $1920$s the business went on to adopt the policy of buying direct from manufacturers, instead of through wholesalers. By the $1970$s the company had acquired a reputation for excellent service, quality, and value for money. M&S had provided generations of middle class shoppers with high quality clothing in classic styles and conservative colors. In addition to womans outerwear, the company held a significant share of the UK market for childrens clothing and mens wear. In $2000,$ M&Ss profits exceeded $1$billion for the first time in its history. Encouraged by unstoppable success, the companys top management team had happily decided on an expansion strategy.Marks & Spencer aims to become the worlds leading volume retailer with a global brand and global recognition... $($Marks & Spencer Annual Report, $2001).$ By June $2002$ M&Ss retail empire stretched to $651$ locations across $31$ countries. In North$-$west Europe M&S concentrated on buying stores around major centers of population. In Central Europe it relied on franchise agreements with local partners. Back in the UK$,$ the company was planning a $20\%$ increase in retail space. By the spring of $2002$ the company launched Marks & Spencer Direct., a clothing catalogue for adults andchildren. The mail order selection was designed to complement the retail offer in terms of product, style, image and price. Over the years, close relations with textile suppliers and manufacturers had enabled M&S to lead the way with innovative new products and fabrics resulting in the introduction of the non$-$iron shirt, machine washable silk sweaters and stain$-$resistant fabrics. M&S designed most of its clothes inhouse before putting the designs forward to preferred manufacturers along with extremely strict specifications regarding the finished product. M&S relied on its trusted suppliers to put forward their most recent innovations; often allowing M&S exclusive access to technological breakthroughs. The physical distribution of merchandise had been outsourced for years to specialist suppliers. Five transport service providers $-$ BOC, Lex Transfleet, Christian Salvesen, Exel Logistics and Tibbett & Britten were involved in transportation and distribution of goods within the UK and Ireland. Exel and T&B carried goods from suppliers to fourteen regional distribution centres $($RDC$).$ The other three companies were contracted to bring goods from the RDCs to the stores. The RDCs themselves were each managed by one or another of the five suppliers. In $2006,$ from the outside it seemed that things had never been better for M&S$,$ but insiders knew thatall was not well. Within M&S concern had been rising over the possible competitive threat posed byinternational retailers, such as the US$-$based Gap and Spains rapidly expanding high fashion chain Zara. In store, goods were still displayed in large quantities by product category, using huge racks each filled with a particular style and colour of jacket, skirt or trousers. M&Ss style contrasted badlywith that of its innovative rivals, who preferred to present goods in attractive boutique$-$style combinations, indicating to customers the way designers had intended the garments to be worn.Moreover, M&Ss own in$-$house data showed that although profits had risen throughout the $1990$s$,$ other key business indicators revealed a worrying trend. In November $2005,71\%$ of customers hadrated M&S positively for service and had $69\%$ felt that the goods offered value for money. By March $2006,$ the figures had fallen to $62\%$ and $57\%$ respectively. In the autumn of $2008$ British retailing was in sudden recession. The difficulties in the UK causedby currency fluctuations and the on$-$going collapse of some of the Far Eastern economies. Planned store openings in the Asia$-$Pacific region were cancelled. The New Year brought trading figures that $2$were much worse than everyone had suspected. Profits decreased by $50\%.$ Too much winter stock cost M&S $150$ million. Some critics pointed to overpricing and poor service as the reasons behind the falling sales, others claimed that customers were unhappy about a drop in quality of some products. Suppliers were first warned of the need to become more price competitive. Certainly this would involve switching a greater proportion of production overseas. Dewhirst, M&Ss oldest supplier relocated vast sections of its manufacturing operations to Sri Lanka, Indonesia and Morocco. It was testing a $72-$hour air bridge system that would allow the company to lift product from its major distribution centres to stores anywhere in the world within $3$ days. Morocco was used as the test$-$site. M&S went on to announce plans to shift the balance of its overseas transport from $60\%$ sea and $40\%$ air to a mainly air$-$based network.In Europe, M&S knew it had to find ways to cut costs to survive in Europe. Exel Logistics and T&B $-$ had formed a joint venture "Joint Retail Solutions Ltd$"($JRL$)$ specifically to service M&S$.$ JRLs $250$ vehicles would replace the fleets of all five of M&S distribution contractors. JRL would collect all boxed and hanging garments and non$-$food household items from suppliers, delivering them to distribution centres and then on to M&Ss stores in the UK and Ireland. The agreement would allow M&S to save costs. But despite cost cutting, profits were still not doing well. M&S had always operated on the basis of two clothing collections per year, using massive scale forward planning to place orders with a few suppliers approximately nine months ahead of the season. In contrast, rivals the Gap, Zara or H&M worked on quick turn system. Gap, for example, had $14$ seasons per year with stock changes every three weeks. M&S was at the time considering shifting upfrom two to four seasons for its main collections, and hoped to reduce lead times to around three months.

Questions:

$1.$ M&S adopted an early strategy in its supply chain that contributed to its early success in the $1920$s$.$ What is this strategy?

$2.\{$Supply Chain Surplus $=$ Customer Value Supply Chain Cost$\}$ According to this equation, what went wrong in M&S$\text{'}$s supply chain?

$3.$ "Five transport service providers $-$ BOC, Lex Transfleet, Christian Salvesen, Exel Logistics and Tibbett & Britten were involved in transportation and distribution of goods within the UK and Ireland." What do you think about outsourcing transportation and distribution to fivedifferent companies? What are the possible drawbacks or problems of such decision?