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AHR - EXEL PLC - Operations Management - 121213

AHR - EXEL PLC - Operations Management - 121213

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Published by Amina Halilovic

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Published by: Amina Halilovic on Dec 13, 2013
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Operations management Amina Halilovic Razic 12.12.2013. CASE STUD !

E"E# $#C Exel plc is an international third party logistics company, providing freight management and contract logistics to some of the world’s biggest companies, including Dell, Unilever, Johnson&Johnson, Home Depot, ol!swagen, etc" #he company was created through a merger with the aim of providing end$to$end logistics solutions for their customer who, up to that point, used only some of the services provided" Exel’s freight management networ! consists of %&' locations in (() countries and they offer contract logistic services in more than ()* countries with (%** facilities and approximately (&* million s+uare feet of warehouse space around the world" ,ome of those are multi user warehouses and some are located near the customer’s manufacturing plants, so as to facilitate deliveries on -ust$in$time basis" Exel has two types of contracts with its customers, open$boo! where clients have insight into Exel’s costs and pay those plus a management fee .preferred by long time customers/, and closed$boo! contracts where the client pays a fixed amount .preferred by new customers/" Exel’s extensive experience lead them to develop new and innovative services li!e in$store logistics and a new business model called 0ead 0ogistics 1artner, the concept of which was for Exel to -oin forces with their customer and integrate completely processes of manufacturing, inventory control, warehousing, transport and management of supplier relationships" Exel’s own business of creating and selling services was carried out by four different teams within the company focused on2 business development, solution design, implementation of solutions and operations" 3n top of this, Exel has global account teams dedicated to servicing needs of specific large clients operating globally" Exel has a sophisticated 45# system which integrates all of their operations in all the facilities and can even connect to customers’’ E61 systems, thus ensuring complete flow of accurate data" 3ne of Exel’s biggest clients is Haus 7art, one of 8ermany’s leading retailers of home e+uipment and textiles" H7 has been using Exel for management of ' of their % distribution centers which supply over 9** of their stores, carrying over '*** ,:Us and receiving products from over %'* manufacturers worldwide, as well as H7’s consolidation center in #ur!ey" H7 and Exel are considering furthering their cooperation and involving Exel in the planning process at H7" 1lanning at H7 has been done by merchants and planners who lac! the !nowledge, experience and confidence in the supply chain to ma!e the best decision for

optimi. as well as forecasting and scheduling models which would give the best options" Efficient planning would contribute to fewer stoc!outs. negotiate best prices with the most reliable transportation carriers. hold optimal levels of inventory. whose -ob this is.ation" #hat can be achieved by better planning of production. Why do companies outsource freight management and contract logistics to third party logistic providers (3 !s"? Why do 3 !s perform these activities better? . they can also provide value added services li!e assembly.ation of supply chain" Expertise needed for minimi. less write$ offs and less inventory" 2.e costs in the supply . How is value added in supply chain management through better planning versus better execution? 0ogistics companies have extensive experience. lower logistics costs. increase visibility of customers> products.uccessful companies understand that the !ey to success is focusing on their own business and building their own competitive advantage in the mar!et and they do not consider that warehousing and transport of their inputs and outputs are among their core competencies. reduce number of errors and improving reliability of the supply chain" 4nvolving the logistics companies in the supply chain would mean including them in forecasting of demand and then organi. testing. customs management and warehousing.ation of inventory of raw materials and finished products. reducing lead times and optimi. failure analysis" =ith efficient management of their customers supply chain they can reduce lead times. warranty validation.ing coordination of transporters according to the needs of supply chain" 0ogistics companies are able to do this because they have highly developed information systems for collection of data. !nowledge.ation of value added can be provided by Exel who have all of those and who will help H7 improve efficiency of their whole supply chain and achieve huge cost savings" 1. so they ma!e the right choice and entrust these process to the companies whose sole -ob is to optimi. find best routes. stac! products in the most appropriate way and find all other ways to minimi. warehousing and all administrative tas!s implied by the supply process at the most competitive prices" <esides providing freight management. optimi. are able to achieve economies of scale. human resources.ation of costs and maximi.ing the supply channel to better match that demand while focusing on cost minimi.e the flow of goods. less mar!downs. connections and 4# systems that enable them to significantly reduce cost and improve speed and efficiency of delivering products and managing inventories" #hey are able to provide their customers best options for transportation. services and information from their origin to the customers" 910s. transportation.

etc" 5ost savings can also be achieved in the warehousing processes.for predicting demand/. by implementing more efficient wor! practices. planning and implementing the best solutions" $.ed. best prices. !nowledge and wide resources. so the wor!ers don’t waste time correcting possible mista!es" #he best result in planning supply chain will be achieved if the demand is forecasted properly and then matched in the best way possible to the available supply by careful planning of production and then choosing best options for warehousing and distribution" 910s are focused on understanding needs of their clients and then searching. schedules" 4n$depth analysis of this data with computer simulations and financial models. but also their constant investments in further education of their staff and learning new pro-ect management tools and techni+ues that would help them better serve their customers" 3.chain for their customers" #he reason why they are able to do this is because they have experience. %hould &xel move into 'oint planning with Haus (art? ?es. many of which were developed in$house and models enabling them to satisfy all the specific needs of logistics processes" =ith these 45#s. for example how the wor! is organi. schedules. plus proper understanding of customers’ needs provides best solutions for customers’ supply chain" . sales .ing. routes. !nowledge of business processes. possible cost savings from optimal stac!ing of the truc!s.ources of 910s capabilities are not only their experience. Exel should move into -oint planning with H7 because the current planning system applied in H7 is not good enough" 7erchants and planners simply do not have enough !nowledge about supply chain and are creating unnecessary costs by trying to prevent stoc!$ outs and delays" #his can be avoided by ta!ing advantage of Exel’s many experiences and extensive !nowledge of best practices in transport . recogni. by assuring validity of data about product placement and inventory levels.consolidating truc!s. delivery routes. understanding of their customers’ needs. 910s are able to constantly collect and update data about inventory levels. as well as information about transporters. How would a deep understanding of supply chain execution and stronger capabilities in execution allow companies to ma#e better supply chain planning decisions? 0ogistics companies have databases of all the information they would need in order to improve a customer’s supply channel" #hese databases include best practices from the past. human and technological resources to plan and implement best solutions for each of their customers’ needs" Especially important are the sophisticated information systems. prices. best times for deliveries. shipping on certain .

warehousing .using a =7.days and particular routes/. system to tightly control levels of inputs and outputs available for delivery/. inventory control and delivery to retailers" .

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