E-commerce as a share of retail continues to grow, accelerated by the pandemic. This is particularly true of the online grocery market. As one of the largest online grocery markets in the world, the UK has many players, but two of the most dynamic are the market leader - Tesco - and Ocado. These two companies have taken markedly different approaches to executing and fulfilling online grocery orders from customers. Tesco has an extensive network of stores and primarily uses them as picking locations to prepare and ship customer orders. Ocado has no retail stores and uses highly automated distribution centers to prepare and ship customer orders. This case describes the UK online grocery market, the two companies and invites students to consider the different approaches: In what ways do they offer advantages to the company and customer and, ultimately, which one is better suited to the UK online grocery market?
The newly appointed Senior Vice President of Trendy needs to put its supply chain on a more sustainable footing for the future. Trendy is an imaginary fast fashion company with a market base in Europe and a global supply chain. Core themes and actions that improve both sustainability targets and/or operational performance are discussed in the case. For sustainability, these include waste reduction, sustainability accounting, and partnerships with suppliers and eco-labels. For operational improvements, these include changing the manufacturing footprint, digitalizing the supply chain, and reducing the product portfolio. The case examines improving sustainability on Scopes 1, 2, and 3. While the case setting is in the fast fashion industry, lessons provided by this case are applicable to many industries seeking to improve their operational sustainability. The case challenges students to bring together different elements of the supply chain course to meet the objective of having more sustainable practices and achieving better operational performance.
By 2021 Zalando had become Europe's largest pure player in online fashion. But the road to success had not always been smooth. Back in 2014, six years after it was founded, the Germany-based company was at a crossroads. With an impending initial public offering (IPO) and investors looking for results, the company was nowhere near being profitable. Zalando realized that to achieve profitability and market leadership, it would have to leverage advanced technology and develop a data-driven supply chain. So, with the innovative spirit of a start-up, it embraced the challenge of building internal digital tools and competencies to drive supply chain efficiencies. The online fashion supply chain had to wrestle with the same challenges of tight margins and high customer expectations familiar to all online retailers. However, the fashion industry faced other unique challenges - high SKU counts, high seasonality, relentless product turnover and frighteningly elevated return rates. By developing proprietary systems and machine learning tools, Zalando developed a responsive, flexible distribution network, trustworthy order promises and a sophisticated, holistic approach to returns management. Through a data-driven journey born out of a crisis, Zalando discovered that these capabilities not only delivered supply chain excellence and pioneering new innovative techniques but also helped to fulfill the company's vision of providing endless choice, seamless convenience and a tailored digital experience to millions of customers across Europe.
Heineken, one the world's largest breweries, had led a long and successful effort to improve the efficiency of its brewery network. For the company COO, this was a source of pride, and also a challenge and an opportunity. Long curious about the potential for digitalizing the supply chain, perhaps this was the natural entry point for the company's supply chain to create a digital transformation program. Heineken could continue its productivity efforts by leveraging digital technologies. Starting by bringing in digital natives from the outside and identifying key internal stakeholders ready to innovate, Heineken began a process of initial pilots where those that were willing could experiment, fail fast, build on successes, and build a digital culture. Through some breakthroughs use cases and financial return prioritization, the company overcame internal resistance, found their way to a model that didn't demand standardization, allowed local innovation and ownership and built a digital community that acted like a tech start-up as much as a brewing company.
This disguised case exercise presents the situation confronting Wistful Cosmetics, a cosmetics company based in Spain. The company, like many others, has been shaken by disruptions to global supply chains. Among the most prominent events are Covid, the Suez Canal blockage by the Ever Given container ship, the global capacity crisis in logistics infrastructure, and unprecedent spikes in demand. The case describes Wistful's context and structure and challenges the reader to respond to three questions: what does the term 'supply chain resilience' mean?, what sorts of events would fall under this definition?, and what steps should Wistful's supply chain director recommend, with what anticipated impacts on the operations and business model.
A new approach to e-commerce, one that blends the best of different online models, is emerging in China under the description "New Retail." Hema, a subsidiary of Alibaba, was founded in 2015 and is growing rapidly, demonstrating the power of an omnichannel strategy of merging online and offline grocery shopping experiences that integrates supply chain considerations into the business design. Overall, Hema represents a fusion of the centralised distribution model and store fulfilment model in the typical online grocery distribution. Each Hema store doubles as a distribution centre through an overhead conveyor system, which enables a 30-minute delivery time for customers within 3km of the nearest store. Hema's approach to transform online grocery demonstrates new possibilities in the future of grocery retail.
This disguised case presents the situation confronting the new VP materials supply chain as "HungryPet". Newly arrived in the role, the VP realizes that the ambitious new project to implement an end-to-end planning system neglects the key bottleneck of materials supply between the HungryPet factories and their packaging and ingredient vendors. In response to this situation, the VP conceives a new, innovative cloud solution to improve collaboration between HungryPet and its vendors. The solution would improve and streamline the information flow, saving planner time and propagating supply requirements and confirmations faster. This would protect and enable the expected benefits of the new planning system project. Ideal as an exam question for MBA or Master students, a Teaching Note is provided. This contains a grading guide as well as sample submissions considered exemplary.
This case describes packaging supplier and equipment vendor Tetra Pak and their Digital Transformation Program, detailing why Tetra Pak undertook this effort, how they organized the program, identified and selected which technologies to implement and the steps they took to overcome implementation challenges. The case structures Tetra Pak's voyage around their priorities: Connected Solutions, Advanced Analytics and a Connected Workforce. The emphasis is on the value proposition of Industry 4.0 and Supply Chain Digitalization for both Tetra Pak and their customers. Learning objective: The learning objective to illustrate an effective and successful effort develop Industry 4.0 and Supply Chain Digitalization capabilities. focusing on the process of identifying technology priorities, establishing the business case in a B2B context, and successfully implementing innovative solutions. The case provides a general introduction to the definition of Industry 4.0 and the key technologies associated with the term.
The online grocery market in the UK is one of the largest in the world. It has many players, but two of the most dynamic are Tesco and Ocado. These two companies have taken markedly different approaches to executing and fulfilling online grocery orders from customers. Tesco has an extensive network of stores and primarily uses these stores as picking locations to prepare and ship customer orders. Ocado has no retail stores, and uses highly automated distribution centers to prepare and ship customer orders. This case describes the UK online grocery market and the two companies; it invites students to consider the differences in the approaches, in which ways they offer advantages to the company and to customers, and ultimately which one is better suited to the UK online grocery market. Learning objective: The objective of this case to develop an appreciation and understanding of the different benefits, costs and constraints of supply chain distribution models. By contrasting two companies that have very different supply chain approaches to competing in the same market, the case leads students to make connections between a company's supply chain strategy and its customer value proposition.
This case depicts an actual, real sequence of events in L'Oreal's Active Cosmetics Supply Chain. The case provides an illustration of the challenges facing large, multi-national organizations in aligning their supply chain planning along several dimensions. The span of the planning is from customers in several markets to the centralized production at the single source factory. The framework for laying out the facts of the case is the senior operations management request to conduct a supply chain planning audit on the Active Cosmetics planning process. The audit request was a direct response to complaints regarding customer service levels by general management. The case begins by setting the narrative that sets the audit in motion. Key actors across the supply chain speak their voices through testimony to the auditor, who serves as protagonist in the story of the case. This vehicle permits the case to express different points of view with objectivity, allowing the reader to consider the validity of each actor's behaviour using that actor's perspective. The case ends with a challenge to the reader to finish what the narrator has started. Having seen the case through his eyes, the reader must now experience the rest of the story as the narrator experienced, and prepare their own analysis and presentation for senior management.
Sky Germany is the leading pay TV provider in Germany and Austria. In 2010, the company was losing money and facing a lot of operational challenges such as a slow subscriber growth, a high customer churn rate, high fixed costs and frequent product stock-outs. In 2010 Sebastian Hauptmann joined Sky as VP of Logistics to help turn the company around. He had to act swiftly to address short-term problems while developing and implementing the strategy for long-term operational success. He put in place a multi-year strategic turnaround program led by supply chain team, a culture of continuous improvements (CI), and a world-class team. By 2014 all important KPI's had improved significantly, and the company was on the path to turnaround, largely driven by the wide-ranging improvements in supply chain management. In 2016, for the first time in its history, Sky Deutschland reported positive operating results. With his continued success, Sebastian successively increased his responsibilities to become first SVP of Supply Chain, Procurement & CI and then EVP of Operations in 2016. The German Pay TV market remains a large opportunity for Sky Deutschland and rapid technology changes in TV and media present new challenges to the Sky group across Europe.
Sky Germany is the leading pay TV provider in Germany and Austria. In 2010, the company was losing money and facing a lot of operational challenges such as a slow subscriber growth, a high customer churn rate, high fixed costs and frequent product stock-outs. In 2010 Sebastian Hauptmann joined Sky as VP of Logistics to help turn the company around. He had to act swiftly to address short-term problems while developing and implementing the strategy for long-term operational success. He put in place a multi-year strategic turnaround program led by supply chain team, a culture of continuous improvements (CI), and a world-class team. By 2014 all important KPI's had improved significantly, and the company was on the path to turnaround, largely driven by the wide-ranging improvements in supply chain management. In 2016, for the first time in its history, Sky Deutschland reported positive operating results. With his continued success, Sebastian successively increased his responsibilities to become first SVP of Supply Chain, Procurement & CI and then EVP of Operations in 2016. The German Pay TV market remains a large opportunity for Sky Deutschland and rapid technology changes in TV and media present new challenges to the Sky group across Europe.
This case challenges students to take a holistic view and analyse root causes ranging from management support, integration of company and supply chain strategy onto cross-functional engagement and required decision-rights to formulate a call for action towards top management to turn supply chain into a competitive advantage. The reader will need to acknowledge supply chain performance drivers (e.g. SKU portfolio complexity) outside logistics and warehouse management that would need to be integrated into their final recommendation. The case can be used effectively to motivate the relevance of supply chain management towards a general management audience or to summarize a series of lectures on supply chain management at the end inviting the participants to draw up an integrative proposal for improvement.
The case documents Unilever's journey to revitalize Lipton brand through sourcing all its tea from Rainforest Alliance Certified (TM) farms. It provides a framework for discussions around the challenges of aligning supply chains behind the re-positioning of a high-value brand as sustainable. It also explores the business case for sustainable sourcing of agricultural raw materials and raises questions on the potential to improve the economic health of the entire supply chain. Learning objectives: Understand the business case for major brands to convert to sustainable sourcing. Understand the challenges of aligning suppliers behind a major market transformation effort. Illustrate the dilemmas of adapting to a changing business context while staying on course with long-term objectives. Change the traditional perception of business responsibility in pushing forward the agenda for action on sustainable agriculture and other "mega-issues."
Two years after joining the LEGO Group as their Logistics Manager for Europe and Asia, Egil Møller Nielsen finds himself fighting several battles at different fronts; the most difficult one on his home turf against his own management team. He is half-way implementing a bold plan: close down all existing local and regional logistics operations and consolidate all logistics and distribution activities from a central location in the Czech Republic, managed by an external partner - DHL. Outsourcing logistics services on a scale like this - in East-Europe - had never been done before by any other European company. The stakes are high as LEGO, struggling for survival, is also trying to re-invent itself. Should Nielsen push through his plan - in which he firmly believes - or give in to the mounting pressure from home and relax his efforts? Learning objectives: We observe two new partners, both active on new, unexplored territory in the early stages of their partnership. The relationship is strained; both companies are under tremendous pressure from their corporate headquarters to show results while there is a general distrust in each others capacity and motivation. In this first case we learn that building a relationship that is based only on a contractual agreement can be a painful experience. Cost accounting in general and cost drivers in specific are mentioned to illustrate their importance in key decision making.
To make its supply chain fit for the future, Hilti, a global player in the construction industry, is revising its current supply chain setup. In particular, the firm has identified three restructuring alternatives: (1) Low pain low gain: Keep the existing supply chain setup and pursue only minor changes. (2) Consolidate around existing structures: Increase the profitability of the existing structures and consolidate production. Closures of individual plants might be necessary. (3) Greenfield: Exploit the potential of a low-cost region and shift the entire production to new facilities in Eastern Europe. The case takes a look at the different options Hilti has and outlines the underlying strategic alternatives. Learning objectives: While discussing the case, students will specifically learn about the chances, difficulties and trade-offs between different objectives involved with supply chain reorganization.
Unaxis Data Storage, a branch of a large European high tech company, is facing a difficult choice. Since most of its customer base is in Asia, the management has to come up with a solution to manufacture some of its products in Asia and generate some cost saving. Yet, the company wants to keep control of its supply chain and its intellectual property.
Unaxis Data Storage, a branch of a large European high tech company, is facing a difficult choice. Since most of its customer base is in Asia, the management has to come up with a solution to manufacture some of its product in Asia and generate some cost saving. Yet, the company wants to keep control of its supply chain and its intellectual property.
When appointed CEO of Novo Nordisk Engineering, Hans Ole Voigt created a vision for the company: Within five years NNE should be able to build a pharmaceutical plant in less than a year. The first reactions were quite negative, most of the employees thought such a goal was totally unrealistic. Processes were reengineered, people were coached and step by step NNE got closer to the objective. Employees became more and more energized and felt the 12 months goal was reachable. From a 30 to 36 months industry average construction time, NNE first came down to 24 then 18 and finally 11 months. By 2005 the goal was reached and the company had earned a standing reputation thanks to its accomplishments. Learning objectives: This case provides a good opportunity to learn about speed in project management. From a supply chain perspective it shows the importance of involving external partners from clients to suppliers in successful project execution. It also helps understand that even in highly regulated industries (here pharmaceutical industry) processes can be changed and improved. From a human resourced management it shows the importance both of creating energy driving employees to overcome extremely challenging projects and investing in project management training.