Integrated Logistics
Case 1
Integrated Logistics
Overview
This case finds Tom Lippert, sales representative for DuPont Engineering Polymers (DEP), in a situation common to today’s competitive sales environment. His company, as a supplier to a major manufacturer (GARD), is faced with changing times. GARD is in the midst of a “changing of the guard” as Mr. Lippert’s long-time contact, Mike O’Leary, retires. O’Leary’s successor, Richard Binish, brings a new set of supplier expectations to the fore of GARD’s purchasing strategy. Over the years, the quality of competitors’ products began to match DEP’s. Firms now compete based on logistics quality. To keep the GARD business, DEP must improve its logistical performance to meet the customer’s rising expectations.
The textbook illustrates a concept called the “shrinking service window.” The idea behind the shrinking service window is that customers have begun to expect higher levels of service (higher fill rates) in less time (shorter order cycles). In GARD’s case, a change in leadership is responsible for the new, higher expectations. The change, however, is indicative of the realization that logistics has become a strategic weapon. The case illustrates that DEP must either match competitors’ service or face losing a major customer.
Solutions to Questions
1. A diagram of the DEP-GARD supply chain is provided on the next page.
Stages that are adding value:
( Inbound transportation from the suppliers ( manufacturing ( DEP packaging ( product delivery
Stages that are not adding value:
( “dwell time” at the remote warehouse ( materials receiving ( matching orders to paperwork ( materials inventory
DEP-GARD supply chain
[pic]
2. Minimum order cycle time: 8 days
Maximum order cycle time: 25 days
3. Yes, it appears that the performance cycle can be improved through the use of 25% and 15% suppliers. For example, Company 2 offers better service levels and less
Integrated Logistics
Overview
This case finds Tom Lippert, sales representative for DuPont Engineering Polymers (DEP), in a situation common to today’s competitive sales environment. His company, as a supplier to a major manufacturer (GARD), is faced with changing times. GARD is in the midst of a “changing of the guard” as Mr. Lippert’s long-time contact, Mike O’Leary, retires. O’Leary’s successor, Richard Binish, brings a new set of supplier expectations to the fore of GARD’s purchasing strategy. Over the years, the quality of competitors’ products began to match DEP’s. Firms now compete based on logistics quality. To keep the GARD business, DEP must improve its logistical performance to meet the customer’s rising expectations.
The textbook illustrates a concept called the “shrinking service window.” The idea behind the shrinking service window is that customers have begun to expect higher levels of service (higher fill rates) in less time (shorter order cycles). In GARD’s case, a change in leadership is responsible for the new, higher expectations. The change, however, is indicative of the realization that logistics has become a strategic weapon. The case illustrates that DEP must either match competitors’ service or face losing a major customer.
Solutions to Questions
1. A diagram of the DEP-GARD supply chain is provided on the next page.
Stages that are adding value:
( Inbound transportation from the suppliers ( manufacturing ( DEP packaging ( product delivery
Stages that are not adding value:
( “dwell time” at the remote warehouse ( materials receiving ( matching orders to paperwork ( materials inventory
DEP-GARD supply chain
[pic]
2. Minimum order cycle time: 8 days
Maximum order cycle time: 25 days
3. Yes, it appears that the performance cycle can be improved through the use of 25% and 15% suppliers. For example, Company 2 offers better service levels and less