Description
Disasters in Supply Chain
Management Development Institute - Gurgaon
Supply Chain Management
11 Greatest Supply Chain Disasters
ID Name
Case 03
SCM Case Presentation
1
09P12 4
Abhishek Vyas Amitrajit Sett Ankit Gupta Jagesh Purohit
2
09P12 5
09P12 7 09P14 2 09P17 3 9
3
Presentation Date: 8-July-2010
4
5 Siddharth Post-Graduate Programme in Management Parmar
(PGPM: 2009-11) Section: A/B
6
Term: IV (17 Jun – 11 Sep, 2010) 09P17
Vishal Gupta
Design Collaboration
•Foxmeyer •Adidas •Denver Airport
Demand Management
•WebVan •Cisco •Apple
System Integration and Implementation
•Nike
Strategic Planning
•Aris Isotoner •GM
•Hershey
•Toys R Us.com
11 Greatest Supply Chain Disasters
Adidas
Supplier Commitment
Order Management System & WMS integration issues
Foxmeyer & Denver airport
Communication Gap
Tremendous operational problems faced
Impact Assessment Analysis
•Foxmeyer: Huge sales losses. Files for bankruptcy and bought by McKesson
•Adidas: Incurs huge market share losses due to under shipping of orders •Denver Airport: Systems only minimally used and eventually shut down in 2005
Recommendations •Invest in wisely selecting a WMS vendor •Go for phased automation
•Do sufficient load testing before going live
•Involve major stakeholders at the design stage
11 Greatest Supply Chain Disasters
WebVan
Irreversible Investments and erroneous order forecasting
Resource underutilization
Cisco & Apple
Erroneous Order forecasting
Stock pile-up & Stock out
Impact Assessment Analysis • WebVan: Company goes to bankruptcy within months • Cisco: $ 2.2 billion write-down of inventory, highest in history and stock drop by 50%. • Apple: Loses PC Market Share
Recommendations
• Go for better forecasting methods
11 Greatest Supply Chain Disasters
Nike & Hershey
Premature switching, Big Bang approach to implementation
ERP systems integration issues
Impact Assessment Analysis
• Nike: $ 100 million revenue shortfall and 20% stock
drop
• Hershey: $ 150 million revenue loss, 19% profit
drop and stock dropped from 57 to 38
Recommendations • Implement in phases • Invest more time in understanding the processes • Standardization of system components for better communication
11 Greatest Supply Chain Disasters
Aris Isotoner
Faulty supplier selection
Loss of quality & prices shoot up
GM
Whimsical leadership
Huge NPAs in robots
Toys R Us.com
Over commitment in terms of customer orders
Order fulfillment failure
Impact Assessment Analysis
•Aris Isotoner: Sales are cut 50%, eventually sold to Totes
•GM: CEO fired, competitors gain market share •Toys R Us.com: Negative PR, outsources fulfillment to Amazon.com
Questions to ponder • How much of human component to be replaced by technology?
• How much of trade-off is acceptable between quality and profits?
Any Questions?
doc_355756108.pptx
Disasters in Supply Chain
Management Development Institute - Gurgaon
Supply Chain Management
11 Greatest Supply Chain Disasters
ID Name
Case 03
SCM Case Presentation
1
09P12 4
Abhishek Vyas Amitrajit Sett Ankit Gupta Jagesh Purohit
2
09P12 5
09P12 7 09P14 2 09P17 3 9
3
Presentation Date: 8-July-2010
4
5 Siddharth Post-Graduate Programme in Management Parmar
(PGPM: 2009-11) Section: A/B
6
Term: IV (17 Jun – 11 Sep, 2010) 09P17
Vishal Gupta
Design Collaboration
•Foxmeyer •Adidas •Denver Airport
Demand Management
•WebVan •Cisco •Apple
System Integration and Implementation
•Nike
Strategic Planning
•Aris Isotoner •GM
•Hershey
•Toys R Us.com
11 Greatest Supply Chain Disasters
Adidas
Supplier Commitment
Order Management System & WMS integration issues
Foxmeyer & Denver airport
Communication Gap
Tremendous operational problems faced
Impact Assessment Analysis
•Foxmeyer: Huge sales losses. Files for bankruptcy and bought by McKesson
•Adidas: Incurs huge market share losses due to under shipping of orders •Denver Airport: Systems only minimally used and eventually shut down in 2005
Recommendations •Invest in wisely selecting a WMS vendor •Go for phased automation
•Do sufficient load testing before going live
•Involve major stakeholders at the design stage
11 Greatest Supply Chain Disasters
WebVan
Irreversible Investments and erroneous order forecasting
Resource underutilization
Cisco & Apple
Erroneous Order forecasting
Stock pile-up & Stock out
Impact Assessment Analysis • WebVan: Company goes to bankruptcy within months • Cisco: $ 2.2 billion write-down of inventory, highest in history and stock drop by 50%. • Apple: Loses PC Market Share
Recommendations
• Go for better forecasting methods
11 Greatest Supply Chain Disasters
Nike & Hershey
Premature switching, Big Bang approach to implementation
ERP systems integration issues
Impact Assessment Analysis
• Nike: $ 100 million revenue shortfall and 20% stock
drop
• Hershey: $ 150 million revenue loss, 19% profit
drop and stock dropped from 57 to 38
Recommendations • Implement in phases • Invest more time in understanding the processes • Standardization of system components for better communication
11 Greatest Supply Chain Disasters
Aris Isotoner
Faulty supplier selection
Loss of quality & prices shoot up
GM
Whimsical leadership
Huge NPAs in robots
Toys R Us.com
Over commitment in terms of customer orders
Order fulfillment failure
Impact Assessment Analysis
•Aris Isotoner: Sales are cut 50%, eventually sold to Totes
•GM: CEO fired, competitors gain market share •Toys R Us.com: Negative PR, outsources fulfillment to Amazon.com
Questions to ponder • How much of human component to be replaced by technology?
• How much of trade-off is acceptable between quality and profits?
Any Questions?
doc_355756108.pptx