PIONEER INSTITUTE OF PROFESSIONAL

STUDIES
BBA-II
Harvard Business Review
A Pain in the (Supply) chain
Submitted To: Submitted By:
Ms. Suchi mody Gargi Tiwari
 John Butman

John Butman is the author of breaking

out : how to build influence in a world of
competing ideas (Harvard Business
Review Press, 2013) and founder of the
content development firm idea platforms,
Inc. He is available for speaking and
 Supply Chain

 A supply chain is a system of organizations, people, activities, information,

and resources involved in moving a product or service from supplier
to customers . Supply chain activities involve the transformation of natural
resources, raw materials, and components into a finished product that is
delivered to the end customer.

  In sophisticated supply chain system used products may re-enter the

supply chain at any point where residual value is recyclable.

 Supply chains link value chains.

 Key points of the article
• Exceso is a manufacturer of gizmos with ClickZipPlus as
the flagship of the company.

• Quarterly sales forecasts, so they couldn`t coordinate their

sales with the production as a result sometimes they increase
or decrease their stock.

• A big problem about the malfunction of the new machines–

Machines are working only at 60% of its capacity . As a
• The retail has over stocking so much product
• Retailers doesn’t have warehouse space for 3,000 cases, so they will
have to pay to park them somewhere else
• Exceso is not receiving any of the demand signals its retailers are
collecting from their point-of-sales data
• Exceso has not coordinated its marketing plans with the retailers
• Lack of communication between areas of company
• They don’t have a clear idea of supply chain’s movement 
• Sales objectives are based on raw data which contain anomalies
• The company sales don’t match the real consumer demand
• Lack of communication between the supply chain
• Exceso suffers from “functional disintegration.” Its marketing
plans were made without an understanding of the true costs of
all the supply chain activities required to support them.

• There are a lack of supply chain visibility.

• Exceso applied bad-designed trade promotions.

• Exceso don’t recognize that its retailers are part of its supply
 Reason of Failure
 A lack of supply chain
visibility.
 CPFR (collaborative
planning, forecasting,
and replenishment) 
 The value of
 What actions should be taken in order to
overcome the situation

Manufacturing: 

• the working capacity of the machines, going from 60% to 90%.

• Manage quality and implement strategies focused on customer

satisfaction. 

• Strategic alliances and share goals with Flemings.

 2:
One of the solutions could come from Alice that
is the push theory of SCM, buying anticipately
to encharge of customers. In fact they realices
they have a poor discount, but at least is better
from other headquarters, and in the same time,
they could supply them so they could take
advantage of the discount and meanwhile is
 3:

The forecasting that Foley has presented does

not have a good relation with the actuality,
but despite of that they could subcontract or
operates over time to increase the
´productivity in order to have the stock in
 4:

The economy does not have a good climate,

and it does not have sense that the prices of the
goods follow a constant amount, so depending
of the fluctuations and the laws of the market
they should change the amounts of the share
price according their competitors
 Solutions as a CEO
• Renew the forecasting team
• To minimize the cost of the variables and inventory costs.
• Use ABC approach customer relations
• Activity-based costing (ABC) is a strategy implemented by an
organization to accurately identify the true profitability of its
customers, this approach also may be applied when determining
the profitability of other key variables such as product lines and
geographic segments.
• ABC would use the division of customers to apply priorities to
• Make changes at the top of the company, all of them
• More communication between areas in the company, all the time
• Exceso must be focus on the customer needs and not in the sales
or shares
• Exceso must know the roles and the importance of each supply
chain partner
• Enhance the relationship with their retailers
• Analyze competition and market, also with news client
• More coordination and information sharing between manufacturer
 CONCLUSIONS
• We consider that one of the most important effects on the
difficulty of this SC is the forecasting, they part from raw
information and that makes impossible to understand the
real demand.
• One possible solution would be to do a new forecast,
reliable, with historical sales and verifying the real climate
around the company. 
• Also, Exceso should improve its channels of
• One of the first steps to identify opportunities to improve the
supply chain, is understand how their behavior, and compare it to
its competitors, other industries and companies that are identified
as world class.

• The supply chain as any part of the organization is managed by

people therefore have the attitude that people always want to
improve is vital for this. This attitude may not be just the people
How can the company that knows it has a problem and the
solution? awareness of the problem and commitment to
address it have to occur on four separate levels. If
recognize these four levels of exist, It’s easy to see how
people can blow off a problem or a potential solution. Four
separate levels compose of;
1) Acknowledge that there is the problem.
2) Agree that the problem is significant.
So, every supply chain has problem. Just accept the
problem and try to collaborate with all of chain by
sincere, it will be better and not be pain in the (supply)
chain.