5S :.t'!s (.. 'Agil.ity-The 0rigins,the Vision,andthe www.emri.in Reatityi V. wwwavaya. In Andersjn H.E.,E.Niemi,Hirvonen com/gcm/masterusa/enus/corporate/ pressroo of the InternationalConferm/pressre I eds), Proceedings [eases/2008/prenceon AgiLity-ICAM,1taniemi,Finland,JuLy 08061.3.htm&Wrapper=Print, accessed on 2 pp. 2005,Helsenki University of Technotogy, January 2009 I3_Z I

CASESTUDY:HOMEFURNITURE SUPPLY CHAIN Wearelookingat the supptychainof homefurniture deliverycost is atwaysborneby the customer marketed by Del"ight HomeDepot(DHD)andspecifi- whereindeliveryservices are organized through catly,simptemicatoppeddiningtablesand chairs stores.Whiteanalysing economics of manufacturing sotdat leadingprivatestores.Typicatl.y, timberis and sellingpopulardiningtabteand set of four procured from[oca[woodforestswhichmaybe at a chairs,the fotlowinqdatawerecotlected. distance of 700kmon anaverage froman urbancenComponent ln Rs tre likeChennai. Thewoodgetsprocessed andshaped MateriaI cost 4,000 in the manufacturing anddealers station.DHDstores Transportation at variousstaqes 800 woutdbe seltingmasscustomized tablesandsetsof chairs.whichwouldbe basedon standard Conversion or whatis cost 1,600 referred to as poputardemand.And then the firm Marketino cost 800 wouldhavea catatogue to suit of muttiptevariants 0verheads 800 customer choices: thesewouldbe customizable to Costof product 8.000 eachcustomer's oreferences andtastesanddetivered Margin 2,000 to promise. Thevariantsare criticalfor DHDto atMarketprice 10,000 tractcustomers industry. andgrowin the fragmented Atsoa customerprefersto buy from suchprivate DHDworksfor targetcostandptaysaroundmargins brands insteadof gettinga diningtableset madeto to givepriceattractiveness in this poputarversion order.ThiscouLd andde- as the productvolumeis criticat.Any deviation be prohibitivety expensive, mandsenormous effortin poolingand organizingfromtargetcostsin anyof the headswouldleadthe res0urces. economics astray.Forexampte, if a customer whois Tourderstand in responsiveness and far awayfromstoreor distribution thedifferences centrewantsto efficiency more,onemayprobethe making of home buya poputar version,DHDwoutdfind it difficuttto furniture-the productcategoryherebeingdining servethe customer as the outboundtransoortation tabtesets.Generatty, the popularversionwith stan- costwouldgo up, whichwoutdcut on priceadvandard micatop wouldbe shippedto distribution tage. Hence,the marketfor sucha productexists centresandthen to stores.Thefocusof the nodal withinfairtyrigid physicaI boundaries, as not onty organization, nametyDHD,wouldbeto achieve effi- transportation but atsoDost-sate serviceoverheads ciencyin cost so that thereis pricecompetitive- get affectedby distance, evenif it is for onetime. ness.At[ its activitiesfrom purchaseof timber, Hence,sucha supptychainis drivenby costeffiinboundtransportation, yard management of tim- ciencyratherthanresponsiveness. berstock,purchase of atl process materiats, includ- 0n the otherhand,onemay[ookat the responsive ing chemicats, to finishingmicasheets,processingsuppty chainin the DHDmarket for diningsets.This tjmberinto diningtablesandchairs,to outbound, productcategorywouldatsoinctudeitemsin a to distribution centresandstores,anddeliveryare catatogue. Ideatty,customers lookat thesepromoat[costfocused. Therewouldbectearly definednoti- tion materia[s andarriveat a demand. Theproduct ciesand procedures move- is eitherassembted for sourcingmateriat, at distributioncentresor finm e n t e n g a g e m e natn, d c o n v e r s i ocno s t s . 0 f t e n ishedin specialbatchesat conversion unitsand

SupplyChainStructure 57

/corporate/ essedon 2

detivered to customers. Thus,it differsfrom the cost-efficient supptychainof the popularversion. Thefotlowingdataas of August2008givesan understanding of the market:


the customer nizedthrough manufacturing nd set of four cted.

In fts

Materiatcost 4,000 Designoffering 2,400 Transportation at variousstaqes 1.,200 Conversion cost 1,600 Marketing cost 1,600 Overheads 1.,200 Costof product 1.2,000 Margin 4,000 Marketprice 16 , 0 0 0 It maybe observed that costsare higherexceptfor material andconversion. Thereis a newheadof cost called'designoffering'whichincl.udes the creativity of designs andthe makingof promotions pieces andmateriat. Theresponsiveness of supptychainof suchpiecesis limitedto definedcreativity,hence DHDcancreatea pricebandwhichworksout for the customer. Alsosincethis kind of productcategory canbe easilyengineered and adoptedby competi-

aroundmargins poputar version Any deviation ;woutdleadthe ustomerwhois :entrewantsto rd it difficuttto I transportation on priceadvanproductexists ies,as not only rviceoverheads is for onetime. rn by cost effi: the responsive liningsets.This rde itemsin a lt thesepromond.Theproduct centresor finrsionunits and

tion, evensuchmarkets arefragmented. Onemain advantage in competitionhereis that DHDgives customers a choiceandtherearea groupof customerswhowouldbe wil.ting to exercise suchoptions. In a standardized marketlike this wherethereare nationaland international brandsseling variants, privatebrandstike DHDcanbe competitive onLyif they combineefficiency and responsiveness in the suppLy chain.It maybe observed that the poputar category wherethe margins arelesscompared to the customized productsegmentwi[[ havelargershare of volumeof business. In suchsituations. the abiLity of DHDto be creative product in the customized segmentand improveon marginwouldbe key to success. Untess DHDprovides reasonabte variants for customer choice,andat the sametime, pricevariantsareaffordable, the strategywouldnot work.In sucha market,it is the productioneconomics of privatebrands,inctudingthe locationof conversion, distributioncentreand storefaciLities, and marketing capabitity in convincing customers of variantsthat areimportant.Thereis scopefor DHD to apptycostprinciplessuchas activity-based costing in orderto improvebusiness efficiencies.

Questions 1. Whatarethe keycostcomponents whichdiffer 3. Identify a private brand food restaurant in bothsupptychainsof DHD? businesswith the scope of efficient and 2. 'DHDsuccess is basedon the abilityto compete responsive supptychainandexplainits suppty on supptychains.'Elucidate. chainconfiguration.

case study: home furniture supply chain -

chain configuration. Component. In fts. Materiat cost. 4,000. Design offering. 2,400. Transportation at various staqes 1.,200. Conversion cost. 1,600. Marketing ...

2MB Sizes 1 Downloads 128 Views

Recommend Documents

case study: home furniture supply chain -
p ressroo m/pressre [ases/2008/pr-. 08061.3.htm&Wrapper=Print, ... marketing capabitity in convincing customers of variants that are important. There is scope ...

Intel ISG Nebraska Furniture Mart Case Study - Media15
Enhance customer service. Offer an ... The tablets run a customized mobile app on the ... Nebraska Furniture Mart strives to improve customer service, increase ...

Intel ISG Nebraska Furniture Mart Case Study - Media15
In business since 1937, Nebraska Furniture Mart has remained successful over the decades not ... The tablets run a customized mobile app on the. Windows* ...

Lychee Supply Chain, Bacgiang case, Vietnam
FAO: Food and Agriculture Organization. ADB: Agriculture Development ...... former one (without application of SO2 fumigation), and of course it must be under legislation and consumer's concern. ..... extension services for growers, Department of Tec

... also resulted in their inability to scale their. e-commerce channel. 2. Page 2 of 15. Page 3 of 15. Planning-in-a-box-Case-Study-Distributed-Supply-Chain.pdf.

Cannabis Supply Chain Traceability - GitHub
Companies or organizations using this document are advised to seek professional ...... Cannabis Supply Chain Traceability. Open Cannabis System of. 10. 27 ...

Supply chain management.pdf
5. What is Supply Strategy ? Distinguish between push and pull supply chain. process. 6. Explain the factors influencing distribution network design. Page 1 of 4 ...

case study
When Samsung Turkey launched the Galaxy S4 cell phone in early 2013, its marketing team ... wanted to use the company's existing video assets to build out a.

Supply Chain Manager - Mbeya Cement.pdf
Feb 24, 2012 - Mbeya Cement Company Limited is a subsidiary of the Lafarge Group, a world ... Design, optimize, implement and drive Inventory Reduction plans. ... their applications to the Human Resources Manager, Mbeya Cement ...

Supply Chain Management
... Research and professor emeritus of supply chain and information systems at .... updated material on the latest technology, transportation regulations, pricing,.

At Home Study Guide At Home Study Guide
At Home Study Guide. For the week of January 1, 2017. “Walk by Faith” • 2 Corinthians 5:1-10. Quick Review. Do you ever wonder what happens to a person ...

At Home Study Guide
Jun 4, 2017 - Find a golf ball and hold it in your hand. As you reflect the size of the earth, Compared it to the enormity of our galaxy. Be reminded of.

At Home Study Guide
Mar 6, 2016 - For more information about Growth Groups, the At Home Study Guide, and a podcast of sermons with study guide, visit www.bethelfc.com. It is easy to say we ought to, “love one another,” but not always so easy to do. You cannot believ

At Home Study Guide
Jun 5, 2016 - Hope for the Broken Hearted. Psalms: Teach us to Pray. Psalm 42-43. Dr. Ken Hanna. Hope for the Broken Hearted. For more information about Growth Groups, the At Home Study Guide, and a podcast of sermons with study guide, visit www.beth

At Home Study Guide
At Home Study Guide. For the week of January 1, 2017. “Walk by Faith” • 2 Corinthians 5:1-10. Quick Review. Do you ever wonder what happens to a person ...