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Whitrnore Products: Time-Based Logistics at Work

.lohn Smith had just returned from what may prove to be one of his most important sales calls' John, a sales representative for a top furniture manufacturer, had been meeting with a representative from HomeHelp, a major home decorating r'etailer. It seems the buyer, Nan Peterson, and the product team she heads had iust rctuntecl liom the annual Council of L,ogislir'" l''1 rtrrnl',r nrent Conference. At the conference. Nan's tealtt ltird attended several sessions on time-based logistics strategies. Even though Nan and her'team had just been exposed to the new strategies, they felt it had the potential lor significant competitive advantage in their industry. ance, and interior decorators, who need speedy outs and convenient delivery or pickup'

At the meeting with

John, Nan explained that

HomeHelp is an entrepreneurial company that encourages product teams to try new products and channel relations. The t'ew rules ateam has to foilow are simple: ( l) deal only with manufacturers (no independent distributors are contacted), and (2) keep costs low and service high. The second rule highlights HomeHelp's basic business philosophy. HomeHelp is a design and home decorating retail chain that follows the warehouse club format. As such, a premium is placed on maintaining low overhead to support an "every day low price"

(EDLP) strategy. Service is also a prernium since
HomeHelp targets two distinct customer segments: doiryourself consumers, who need special in-store guidJudith M. Schmitz prepared this case for discussion. Actual facts have been altererl to maintain"confidentiality and to provide an cnhanced business situation.

Nan explained that the team has been considering-' applying time-based logistics strategies to furniture'i S*t un uoungement had the potential to improve prod: uct availability for in-storc customers while reducing l,r l,irll l,r,i'r,ttlrr , lli,tncllrrllr'li t:llst.r rclatiOnShip with' attcntion' llrulessiotral tleerrtitlot's requited ctlntinued lnna ta, r- r r-:r:1--- I improve its pro{rtability and to ensure long growth. Interior decorators need convenient andexaq ing service, and HomeHelp feels that time-based lof tics applied to furniture could be an important step improvi ng profi tabilitY. HomeUelp's main concern is that the fumiturej dustry as a whole appears to be trailing other industn i;;H; or *pilt,i"uted logistics operations' For Q ample, the furniture industry has invested little in in: formati.on technology and maintains high inventon.e$:I throughout the channel, including at the retail level' The+r resulti other firms reported for their innovative togiCtlg$.t applications gave HomeHelp a new insight into how an;. alliance with a furniture manufacturer might create &'i best practice distribution system with lower costs an&'i iess inventory Nan told John that his company, Whitrnore' had potential to achieve an exclusive distribution ar ment with HomeHelp if the two companies could time-based logistical capability' Whitmore was ch( since the business press had recently featured on its new organization plan that focused on chann of distribution and leading-edge logistics strategies'

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addition, Whitmore was beginning to invest in infori.mation technology. She felt that both companies should i'be able to reduce overall channel costs and offer cusi, tomers superior product availability. Her specific re',. quert was for John to fbrmulate a tentative proposal + wittrin three weeks in order to "strike while the iron :was hot." Nan knew that the timing and unexpected iii ii;opportunity created a great challenge for Whitmore, but to maintain a leadl.i,,ghe exptained that HomeHelp strives HomeHelp wants to increase h,iirrg, eage. Furthermore, ;:i'annual growth to 20 percent and feels that furniture li,,.offers the best opportunities. As such,...
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