West Marine Case
Once West Marine can determine their root cause for error in their supply chain, corrections can be made. Decision Criteria Analysis of alternatives Perhaps the easiest approach to the acquisition of BoatU. S. is to leave BoatU. S. ’s current demand and forecast planning untouched and separate from West Marine’s planning processes. This would be inexpensive and non-disruptive to the current corporate culture. The drawbacks, however, could be a slow steady decline in profitability and reliability of the BoatU. S. brand, hence the reason for the acquisition in the first place.
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However, management can use the testament of various metrics in the Supply Chain at West Marine since the E&B Marine acquisition, and implement a S&OP and CPFR system into the BoatU. S. brand line. The benefits to implementing such a comprehensive S&OP and CPFR plan are clear in the literature such improved customer satisfaction, increased in-stock percentages (2-8%), and inventory reductions of 10-40%. (Lapide) These benefits will be a crucial help to the BoatU. S. brand and better align them with their competitive competencies.
Which includes catering to a more sophisticated boater who highly values customer service. Improving in-stock percentages will solve a current problem in BoatU. S. ’s stores with high volume/high margin items missing from stores; perhaps adding to customer service as well. (p. 21) Also, the reduction in inventory will contribute to relieving the dilapidated distribution center in Maryland. Giving management time to evaluate the need for a new better planned warehouse, or renovate the current one for more efficient operations. Recommendations and Justification of Decision
Our team proposes West Marine’s management proceed with the acquisition of BoatU. S. and immediately devise and implement a strong Sales and Operations Planning strategy to strengthen the internal demand planning and forecasting within BoatU. S. To accomplish this, top management must take a top-down as well as a bottom-up approach with clear financial performance goals. First, comprehensive information systems must be installed to collect accurate point-of-sale and warehouse data and report it in a way managers can make decisions. Here are my thoughts.
While the adoption of the CPFR has shown improvement in supply chain issues, they need to incorporate a S&OP program to shape the demand and improve forecasting and planning. Having recently adopted the CPFR standards, are they up to implementing another big endeavor such as this? I think they should take on the acquisition of Boat US as a pilot program. Not only should they adopt the current CPFR standards that have shown improvements, but they should also begin the top down and bottom up planning efforts as described in the S&OP literature.
As I mentioned in an email, the case narrative doesn’t mention any in-depth planning from the top- level management. They do state that product clusters have people responsible for setting prices and determining margins independently. Also, West Marine’s performance measures are pretty much all financed based, that is they are focused on ROI, EPS and so on. By focusing on the collaboration with the suppliers, they are addressing concerns such as stock outs and delivery times, but how are these translating in to the overall company goals?