The North West Company Case Analysis
Essay by connieg • August 16, 2017 • Case Study • 2,850 Words (12 Pages) • 1,346 Views
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Supply Chain Management Professional
The North West Company
Case Analysis
Instructor: Robert Greene
Written By:
Connie Gong
Date: June 23, 2014
Table of Contents
Executive Summary 3
Issue Identification 4
Environmental and Root Cause Analysis 6
Alternatives and Options 10
Recommendations 12
Implementation 13
Monitor and Control 15
Exhibit 1 16
Exhibit 2 17
Exhibit 3 18
Executive Summary
The North West Company is a leading retailer of food and everyday needs. They are currently using a “push” strategy with the category managers at headquarters analyzing trends, placing orders and allocating products to stores.
Inspired by Giant Tiger’s pull system, North West management was considering giving store managers more control over their inventory ordering by moving to a “pull” replenishment strategy. Barry McLeod, Director of Procurement and Marketing, has been assigned with determining if this “Pull” strategy would be a better fit. "Pull" system is a good idea but it need invest a large amount to support IT system and training all the store manager.
In order to reduce the risk and capitalize on the benefits, North West should localize in the hands of Regional Retail Managers. This strategic change will be beneficial for North West as they would gain the required regional/store level knowledge while avoiding giving all the responsibility to local store managers and investing a large amount of dollars to support the pull system. and also it can improve forecasting and customer satisfaction.
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Environmental and Root Cause Analysis
Strengths | Weaknesses |
|
|
Opportunities | Threats |
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|
Table 1 - SWOT analysis of HP Company
Department | Perspective | Score |
Marketing |
| 0 |
Product Development |
| -1 |
Finance |
| 0 |
Manufacturing |
| +1 |
Distribution |
| 0 |
Table 2 - HP departmental perspective on universal power supply [score of -1 = against change, 0 = neutral, +1 = agree with change)
There are only a couple of disadvantages for switching to a universal power supply relative to the many advantages; the disadvantages being the increased cost of $30 per unit and possible power play among operations and DCs for allocation of products. Since it is uncertain what the cost of stock-outs are it is difficult to calculate if the $30 per unit increase in cost will affect the bottom line to understand if the customers unit price for each printer would increase or decrease. Hence there is an inherit level of risk that is unknown. Also since the universal power supply would make transshipment more cost effective, there is general consensus among departments that if forecasting is not done correctly and correct management for flow of products is not carried out, the logistic cost will counter savings gained through reduction of reconfiguration costs occurred during transshipments.
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