Case 2 WoodMere – Home Help

Time Based Logistics ProposalTeam

Ajay GuptaFrancisco Perez-Lerma

Jason FreemanViktoria Barsukova

Table of ContentCompanies/Case Overview Time Based logistics propositionsBenefits and Barriers of Time based logisticsManagement Recommendation/Suggestions HomeHelp decision

WOODMERE Furniture manufacturer

Two manufacturing facilities Six distribution centers

Manufacturing facilities forecast sales to create the production schedule, 6 weeks prior to assembly

Receives order from customers Electronically (40%) Phone through sales representatives

Customers - Retail Dealers (Maintain their own inventory of Woodmere's products)

Order cycle time 3 to 6 days when inventory is available Inter facility transfer typically adds 2-3 days to the order cycle 8 to 12 days are added to the order cycle for backordered to a

manufacturing plant National for-hire carrier: deliveries to customers and interfaculty

movements

HOMEHELP Design and home decorating retail chain

Supports everyday low prices Industry leader in home decorating retail market - 10 % of $120

billion industry Forecasts

Market - $150 billion within 3 years HomeHelp positioned - ~20 % of total industry sales

Customer segments Do-it-yourself consumers : Who need special in store guidance - 60%

of Sales Interior decorators : Who need speedy check-outs and convenient

delivery and pickup – 40 % of Sales

Time Based Logistics System

Time based logistics system relies on retailer's roles Bar code of the sold product is scanned Information sent directly to manufacturing facilities Information used to derive production schedules and response to

customer sales. The ultimate goal with time-based logistics

Learning to do more and more with less and less until you are doing everything with nothing

Three dimensions Process Information Decision

Business PropositionsWoodmere

Potential to achieve an exclusive distribution arrangements

Reduce overall channel costs

Offer customers superior product availability

Develop new business relationships

Enhance Woodmere image on upcoming fashion trends by HomeHelp professional decorators

Competitive advantage -Implementing Time based logistics

Home Help

Alliance with a furniture manufacturer

Reduce overall channel costs

lower costs and less inventory

Strives to remain leading edge

Prospect to increase annual growth to 20%

Furniture offers the best opportunities

Improve partners efficiency and cash flow – Implementing Time-based flexible delivery programs

Short-Term Benefits

Benefits Short-term projections and

operations won’t change Short-term increase on

sales for Woodmere Daily or weekly

replenishment cycles allow the Homehelp to carry less inventory

Improvement in stock-out performance

Challenges

Difficult to transition from current system to a time-based logistics system

Need to integrate their information systems

Develop a plan to roll out the new system

Does Woodmere have the capacity to fulfill both orders for Happy Home & Living

Long-term BenefitsBenefits Building a stronger and

more reliable business partnership by making the switch

Strengthen the brand quality for both companies

Customer Value Creation Service Excellence Continuous Improvement –

Sustainability

Challenges Need collaboration

between the two companies

Future : What about the logistics required for manufacturing procurement?

Other Factors What would happen if

HH&L hired new management and turned around their company.

Details that need to be considered and resolved At what point does ownership

of the product change? Defects, reverse logistics? Where do products get

delivered? What happens when

expected timelines aren’t met?

Management View Increased sensibility of a close and tied relationship

between manufacturer and vendor – Share the risksFinancial costs associated toward time-based

logisticsOrganizational change - To be implemented for new

needsAdditional costs transferred – To traditional

customersHomeHelp imposing condition at Woodmere to

change the logistics system

Management Recommendations

Control on ImplementationControl on Sales Forecast Monitor the Inventory Financial Aspects of Time based logistics

Monitor the Dwell-time reduction Monitor Cash-to-cash cycle