West Marine, a large boating and fishing retailer with over 300 stores in North America with more than 50,000 products is planning the acquisition of BoatU.S. and the subsequent integration of the two supply chains. Although the management of West Marine has made significant progress in the implementation of CPFRprinciples over the six years since the E&B Marine acquisition, there are still qualms about how well the current Supply Chain and planning process can incorporate BoatU.S.'s product line. Each company maintains 750 suppliers with only 100 in common (or ~13%), with only 20% of products in common.BoatU.S. does not provide forecasts to suppliers or participate in any other CPFR activities as does West Marine. Therefore, to integrate the two companies' supply chains within 60 days, and ensure minimal disruption to peak season sales, and to make the acquisition profitable within one year, our team proposes plan _____ discussed below. In short, this plan includes:...... Problem Definition
Before the implementation of any plan into the combining the two supply chains, a decision must be made on maintaining the BoatU.S. brand. BoatU.S. has approximately 63 stores, an internet/catalog operation, and a wholesale business. In addition, BoatU.S. has a large loyalty and marketing program catering to a different customer base than West Marine, although both have some customer overlap. For our analysis, we will assume West Marine will keep the BoatU.S. brand and focus on what management needs to accomplish to fully combine the supply chain on BoatU.S. and the supply chain of West Marine. CPFR (Collaborative Planning, Forecasting and Replenishment) is a cross-industry initiative designed to improve the supplier, manufacturer, retailer relationship through planning processes and shared information. It is an integrated supply chain method to improve efficiency through direct collaboration between all trading partners with the ultimate focus on the consume Fix internal supply chain issues first: POS /information systems, establish product management/forecast teams Then move to external collaboration with suppliers and forecasts. West Marine acquisition plan using CPFR:
Develop a front end agreement with BoatUS suppliers to include expectations, measurable targets, strategic objectives, and tactics including order minimums and intervals. Next incorporate forecasts of purchases from US boat retailers. Last, execution = right location right time.
We need to mention the measurement. Our professor is serious about her statistics. That's why I added this section last night: . Measurement and course correction: West Marine will need to determine their forecast error and their benchmark. Previously West Marine has used their order history as a benchmark. This plan has the potential to cause quantitative and qualitative forecasting errors due to special one time orders, or any promotions that would alter sales. 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. 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)...