1 / 21

Chapter 6. Strategic Alliances

Chapter 6. Strategic Alliances. Park Eun-Jung May.17.2007. Contents. Case> How Kimberly-Clark Keeps Client Costco in Diapers Introduction Framework for strategic alliances Third-party Logistics Retailer-supplier Partnerships Distributor Integration. Strategies for SCM.

Download Presentation

Chapter 6. Strategic Alliances

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Chapter 6. Strategic Alliances Park Eun-Jung May.17.2007

  2. Contents • Case> How Kimberly-Clark Keeps Client Costco in Diapers • Introduction • Framework for strategic alliances • Third-party Logistics • Retailer-supplier Partnerships • Distributor Integration

  3. Strategies for SCM • all of the advanced strategies, techniques, and approaches for Supply Chain Management focus on : ◈ Global Optimization ◈ Managing Uncertainty

  4. Dealing with Uncertainty • Pull systems • Risk Pooling • Centralization • Postponement • Strategic Alliances • Collaborative Forecasting

  5. Case> How Kimberly-Clark Keeps Client Costco in Diapers • Kimberly-Clark : manufacturer • Costco : retailer • Kimberly-Clark replenished stock of Costco in diapers  Costco didn’t need to manage the stock. • Shared information about individual stores’ sales • Kimberly-Clark used the computer link and employed data analyst

  6. Case> How Kimberly-Clark Keeps Client Costco in Diapers • Kimberly-Clark and Costco used VMI(Vender-Managed Inventory) • Effect : Reduce inventory levels of Costco, Saving costs, increase sales of Kimberly-Clark, improve service levels

  7. 6.1 Introduction • Internal activities A firm can perform the activity using internal resources and expertise • Acquisitions Acquire a firm which have the expertise or specialized resources • Arm’s-length transactions • Strategic alliances

  8. 6.2 Framework for Strategic Alliances • To determine whether a particular strategic alliance is appropriate for your firm, consider following issues : • Adding value to products • Improving market access • Strengthening operations • Adding technological strength • Enhancing strategic growth • Enhancing organizational skills • Building financial strength

  9. 6.3 Third-Party Logistics • What is 3PL? Take over some for all of company’s logistics responsibilities Outside company to perform all or part of the firm’s materials management and product distribution functions

  10. 6.3 Third-Party Logistics • Advantages and Disadvantages of 3PL • Advantages • 3PL allows a company to focus on its core competencies • 3PL provider constantly update their information technology and equipment • Flexibility in geographic locations, service, resource and workforce • Disadvantages • Loss of control

  11. 6.3 Third-Party Logistics • 3PL Issues and Requirements- Consider following issues when a firm contract with 3PL provider : • Know firm’s own cost • Customer orientation of the 3PL • Specialization of the 3PL • Asset-owning versus non-asset-owning 3PL

  12. 6.4 Retailer-Supplier Partnerships • Types of RSP • Quick Response Strategy- Supplier receives POS data from retailer and uses this information- Improve forecasting and scheduling and reduce lead timeEx 6-6) Milliken and Company uses POS data  synchronize their ordering and manufacturing plans  reduce the lead time • Continuous Replenishment Strategy- POS data are used to prepare shipments- Maintain specific levels of inventory

  13. 6.4 Retailer-Supplier Partnerships • Advanced Continuous Replenishment Strategy- Improve the inventory levels continuously- Inventory levels change the appropriate level • Vendor-Managed Inventory(VMI) System- The Goal is to eliminate retailer oversight on specific orders- Inventory turnover of Wal-Mart was increased through the VMI system- P&G deliveries improved dramatically

  14. 6.4 Retailer-Supplier Partnerships

  15. 6.4 Retailer-Supplier Partnerships • Requirements for RSP • Advanced Information System- EDI(Electronic Data Interchange) and POS - Bar Coding and Scanning • Top Management Commitment • Partners to develop a certain level of trust

  16. 6.4 Retailer-Supplier Partnerships • Inventory Ownership in RSP- Inventory ownership must be cleared to the success of this kind of strategic alliance effort- In VMI system, supplier owns the goods until they are sold  retailer reduce inventory cost, supplier manage inventory effectively

  17. 6.4 Retailer-Supplier Partnerships • Steps in RSP Implementation • The contractual terms of the agreement must be negotiated- decisions concerning ownership, credit terms, ordering responsibilities, performance measures • Developing the integrated information system, effective forecasting technique and a tactical decision support tool

  18. 6.4 Retailer-Supplier Partnerships • Advantages and Disadvantages of RSP • Advantages- Supplier controls the bullwhip effect- Reduce overall system cost and improve overall system service levels- Reduce forecast uncertainties- Reduce safety stocks, storage costs and delivery costs • Disadvantages- Employ advanced technology- Develop trust- Supplier has much more responsibility in strategic partnership- Increase supplier’s managerial responsibilities and inventory costs

  19. 6.4 Retailer-Supplier Partnerships • Successes and Failures • Successes- VMI program of between Wal-Mart and Mead-Johnson increased inventory turns - Scott Paper Company’s VMI program improved inventory turns • Failures- Schering-Plough Healthcare Products and Kmart’s Partnership didn’t improve sales or profits, but decreased stockouts at Kmart- Spartan Store’s lead time was not decrease and didn’t trust supplier

  20. 6.5 Distributor Integration • Use the expertise and inventory at the others • Types of Distributor Integration • Inventory-related- a large pool of inventory , lowering total inventory costs, raising service levels • Service-related- Meet a customer’s specialized technical service requests

  21. 6.5 Distributor Integration • Issues in Distributor Integration • Distributor may be skeptical of the rewards of participating in such as a system • Distributor might be nervous about losing these skills and abilities • A large commitment of resources and effort on the part of the manufacturing company

More Related