In January 2013, the chief executive officer and the department heads of Shoppers Stop Limited, India’s largest department store chain, met to discuss the Indian government's imminent clearance of direct foreign investment applications by major global retailers. To prepare for the upcoming challenges from international competition, the head of the non-apparel department was asked to prepare a strategy. After discussions with the other department heads, he decided to recommend a sense-and-respond business model. However, he was unable to complete his plan because the head of distribution and logistics was unavailable until the following week.<br><br>In part B of this case, the head of the non-apparel department met with the head of distribution and logistics to assess the advantages and disadvantages of centralized and decentralized distribution and logistics structures. The head of the non-apparel department was considering an expansion to an online business, and knew that a dedicated, efficient, and cost-effective distribution and logistics system would ensure its success. He had a preliminary plan for a sense-and respond strategy but had some lingering questions. Which key elements of this strategy did the organization already possess? How could Shoppers enhance these capabilities in the future? Would the company need a major distribution and logistics restructuring to improve its sense-and-respond capability?
The case describes the evolution of a global multi-tiered supply chain involving one of the world’s largest automotive original equipment manufacturers (OEMs), its tier 1 supplier — Automek, a U.S.-based global corporation — and the tier 2, tier 3, and tier 4 suppliers based in India. <br><br>With Automek’s engineering support, India-based Agile Electric had successfully developed many parts for the OEM in the past. Based on this experience, Automek buyers placed an order with Agile for a new product — an actuator assembly. In developing this product with little support from Automek, Agile was concerned due to its lack of knowledge concerning the suppliers for the actuator assembly components and the critical requirements. To allay its concerns, Automek promised to locate suppliers and assess and validate the suppliers based in India. Agile then invested in the assembly line and developed the actuator assembly. When supplies started, the OEM reported many quality problems, traceable to the tiered suppliers. <br><br>Along with quality and parts supply issues, the issues of subsequent liability in the case of a recall by the OEM were faced by members of the supply chain. Agile felt that since Automek had selected or approved the suppliers, and since Agile had had no original product expertise, that Automek should take responsibility for resolving the quality problems.