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FedEx case study 1.


Problems faced by Fujitsu: Fujitsu was encountering problems relating to inventory management and nonadherence to time schedules for delivering its notebook computers. Even though FPC had sufficient inventory, it took ten days to deliver a notebook to the customers in the US whereas its competitors were delivering it in lesser time. The two main problems faced was the lack of co=ordination between the two freight forwarders Nippon Express (which shipped the components from Japan) and CAF(which brought the components by air from US to Portland). The shipment from Japan even went to the wrong place. The Portland facility was not functioning at an optimum efficiency and was not strategically located.

Measures by FedEx: y Shift of FPCs assembling and distribution operations from Portland to its Memphis hub. y The ERP systems were electronically linked to the systems at the Memphis facility. y A lot of issues relating to security and software were tackled. y FedEx's aircraft replaced Nippon Express to carry the components from the Asian vendors, which were later stored at the FedExs warehouse. y The JIT principle was used where the assembling schedules were sent by FPC to FedExs Memphis unit.

y Performed the Integrated Repair and Return (IRR) operation. Through IRR, Memphis facility was linked to another location where a subcontractor assembled and tested notebooks. y Operations such as loading software, testing, etc. were also undertaken. y Order processing was done through the ERP systems.

The Improved Process Flow Chart

Orders were placed ERP IRR

Orders were downloaded and Requests were placed for the components

FedEx s Warehouse

Shipment of Components to Technicians assembled the components & the notebooks were shipped


FedEx s air and ground network

IRR & FPCs Facility

Results: y Reduction in the time taken to assemble and deliver notebooks i.e. from 10 to 3 days. y Reduction in the finished goods inventory level. y Performance checks to monitor inventory accuracy, return rates and fill rates. y Decrease in the total cost of the logistics.

2. Cisco Systems

Problems: y Assembling and delivering its products to the customers. y Growing number of warehouses

Original Cisco Process Flow Chart

Sourced Components

Stored at regional warehouses

Sent to assembly warehouses

Component assembled and stored in warehouses

Measures by FedEx:
y Developed unique service called Merge-In-Transit. y Utilized infrastructural facilities.

Merge-in-Transit Process
Identification of assembly warehouse closest to the customers place Nearby suppliers to deliver the various components

Order for a router

Assembled by FedEx

Delivery to customer

This ensured quick delivery and improved availability of critical components. The excess inventory at the warehouses was eliminated. This saved the inventory and distribution costs. Later the merge-in-transit was developed into E-Merge.

ByShruti Shetty (09) Aditya Dhande (17) (MMS II, SEM 3..Finance)