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    West Marine Case Solution

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    ved2k2128
    West Marine acquired a competitor in 1997 which caused sales and inventory issues as the supply chain was not prepared. A new CEO implemented strategies focusing on leadership, strategy, culture, and processes. They emphasized supply chain improvements including collaborative planning with vendors. This led to improved forecasting, inventory levels, and on-time deliveries. Any acquisition of BoatU.S. would require extensive supply chain integration given the complexity, so lessons from prior CPFR implementation would need to be applied.

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    West Marine Case Solution

    Uploaded by

    ved2k2128
    2K views3 pages
    West Marine acquired a competitor in 1997 which caused sales and inventory issues as the supply chain was not prepared. A new CEO implemented strategies focusing on leadership, strategy, culture, and processes. They emphasized supply chain improvements including collaborative planning with vendors. This led to improved forecasting, inventory levels, and on-time deliveries. Any acquisition of BoatU.S. would require extensive supply chain integration given the complexity, so lessons from prior CPFR implementation would need to be applied.

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    West Marine acquired a competitor in 1997 which caused sales and inventory issues as the supply chain was not prepared. A new CEO implemented strategies focusing on leadership, strategy, culture, and processes. They emphasized supply chain improvements including collaborative planning with vendors. This led to improved forecasting, inventory levels, and on-time deliveries. Any acquisition of BoatU.S. would require extensive supply chain integration given the complexity, so lessons from prior CPFR implementation would need to be applied.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views3 pages

    West Marine Case Solution

    Uploaded by

    ved2k2128
    West Marine acquired a competitor in 1997 which caused sales and inventory issues as the supply chain was not prepared. A new CEO implemented strategies focusing on leadership, strategy, culture, and processes. They emphasized supply chain improvements including collaborative planning with vendors. This led to improved forecasting, inventory levels, and on-time deliveries. Any acquisition of BoatU.S. would require extensive supply chain integration given the complexity, so lessons from prior CPFR implementation would need to be applied.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    CASE SOLUTION

    West Marine: Driving growth through


    Shipshape Supply Chain Management

    Submitted by:
    VED PAL
    09BM8077
     
    STRATEGIES OF WEST MARINE AFTER MERGER WITH E&B

    In 1997, West Marine acquired an East Coast competitor, E&B Marine and
    the consequences were: sales fell by almost 8 % and peak-season out-of-stock
    levels rose more than 12% as compared to the previous year. The analysis
    regarding this gave the logic that infrastructure of West Marine was not strong
    enough to support an organisation almost doubled its size and thus, Supply Chain
    was badly hit.
    In late 1998, John Edmondson was brought to lead as the CEO of the
    company. To scribd the turnaround of the company he focussed on the following
    four areas: (1) Leadership, (2) Strategy, (3) People and Culture, and (4) Systems and
    Processes.
    • Leadership: All the areas where the business was falling, all the key players
    were changed by veterans from the industry. He went for more experienced
    people in his management team, people who has handled large and complex
    retail organization.

    • Startegy: Upon joining West Marine, each executive was given the general
    mandate to turn around his respective function. The strategic plan started
    with West Marine’s vision of being ‘the best boating products company
    everyday’. It then, outlined a series of specific financial goals (company wide
    performance indiactors), that include ROE, cash flow, comp sales, EPS,
    productive service levels, market share, customer satisfaction and associate
    satisfaction. Finally, it went for SWOT analysis for itself and grabbed the
    opportunities in coming years.

    • People and Culture: West Marine started a cultural change drive on the
    idea of providing “better than expected customer service”. The leadership
    team addressed all the problems head on and also, outside experts in
    cultural change were brought in to more appropriately direct the passion
    and energy of the organization. Significant effort was put in redefining roles,
    the silos mentality was totally abandoned and new transparent
    communication was established.

    • Systems and Processes: To address the problem, the new management


    team started attacking every process, reviewed tens of thousands of
    processes and reinvented all of our systems to figure out how the ongoing
    SG&A can be taken out of the business at the same time as the operations
    starts more effectively

    Supply Chain Collaborations: Particular emphasis was laid on changing the


    Supply Chain Management Practices at West Marine. It’s supply chain was more
    complex than the supply chains of most speciality retailers. The E&B acquisition
    further compounded supply chain challenges by adding more stores, new SKUs
    and different assortments. The supply chain improvements started with team
    putting halt to all store expansion to relieve some of the immediate pressure on the
    supply chain. Critical importance was placed on improving end-to-end supply
    chain visibility and effectiveness, driving down related costs and improving the level
    of supply chain collaboration within and outside west marine. The company then
    decided to go for Collaborative planning, forecasting and replenishment (CPFR).

    CPFR: IMPLEMENTATION AT WEST MARINE

    Collaborative Planning, Forecasting and Replenishment (CPFR) formally


    combined and capitalized on the intelligence of multiple trading partners in the
    planning and fulfilment of customer demand. It works on the development of a
    single, shared forecast that supported the joint plans of the trading partners in the
    supply chain and drove their mutual replenishment activities. Clear performance
    measures are defined to document operational performance expectations. Risk is
    monetized so that partners faced clear financial consequences when agreements
    are not met. Incentives were used to motivate collaborative, cooperative behaviour
    and to share the benefits. Much of the value of CPFR resulted from the exchange of
    more timely, complete and realistic forecast data, which led to higher forecasting
    accuracy. It also linked best practices of sales and marketing divisions.

    As a part of CPFR implementation, West Marine adopted conventional order


    management, with the retailer driving forecast, order planning and order
    generation. It implemented a successful, robust linkage between the point-of-sale
    and DC systems to maximize automation and mass-maintenance procedures which
    gave multi-echelon replenishment solutions. It implemented EDI using SPS
    commerce solution and asked suppliers to begin using EDI. After the
    implementation of CPFR, the stock rates at the stores came close to the goals of
    96% in every store, forecast accuracy climbed up to 85% and on-time shipments
    were also improved.

    STRATEGIES TO BE BE ADOPTED FOR PROPOSED TAKEOVER OF BOATU.S.

    West Marine should adopt the following strategies while going for the acquisition of
    BoatU.S.:

    • A vendor and SKU rationalization effort would be needed, when the company
    is going for merging the two into a single brand West Marine. But if itwants
    to go with Dual-Branding Strategy and decides to maintain the BoatU.S.
    brand, the company has to develop a more diverse product base and more
    unique assortments than ever before. It also needs to take care of the
    integration of the replenishment activitiesbeacause these are mostly manual
    processes in case of BoatU.S.

    • Overall complexity involved in the supply chain integration of both


    companies is high since both offered 50,000 SKUs via stores, internet and
    catalogs. This is one of the most critical factor as West Marine cannot afford
    to have a repeat of the Supply Chain breakdown, as happened in the case of
    previous merger of E&B Marine. Thus, the experince gained from the CPFR
    needs to be used and applied for the successful integration of two
    companies.

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