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Supply Chain Strategy at Haus Mart

Yes, HM was the right setting for Exel to test its new supply chain strategy for the following reasons: - HM had capable planners but was lacking in execution, while Exel had strong execution capabilities but weaker planning. A partnership could leverage both companies' strengths. - Working with HM directly on planning and execution would allow Exel to gain experience in an integrated planning/execution role within an existing customer relationship. - Exel anticipated significant cost reductions for HM by combining HM's planning with Exel's supply chain expertise. This demonstrated potential benefits of the new strategy. - Exel found HM planners were unaware of some supply chain efficiencies, indicating opportunities for Exel to apply its knowledge and optimize HM

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0% found this document useful (0 votes)
35 views2 pages

Supply Chain Strategy at Haus Mart

Yes, HM was the right setting for Exel to test its new supply chain strategy for the following reasons: - HM had capable planners but was lacking in execution, while Exel had strong execution capabilities but weaker planning. A partnership could leverage both companies' strengths. - Working with HM directly on planning and execution would allow Exel to gain experience in an integrated planning/execution role within an existing customer relationship. - Exel anticipated significant cost reductions for HM by combining HM's planning with Exel's supply chain expertise. This demonstrated potential benefits of the new strategy. - Exel found HM planners were unaware of some supply chain efficiencies, indicating opportunities for Exel to apply its knowledge and optimize HM

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neha reddy
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© All Rights Reserved
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CASE STUDY 6: EXEL PLC - SUPPLY CHAIN

MANAGEMENT AT HAUS MART


BY: M NEHA REDDY
MBA 1ST YEAR
SECTION-B

1. Was Exel ready to move into supply chain planning?

Ans. Exel intends to enter into supply chain planning and execution,
according to the case, and offer additional value to the supply chain. The
company's execution approach is sound, but more attention to preparation
is required. Furthermore, while the organization has stronger capabilities
for controlling the execution process, it lacks key capabilities for
managing supply chain planning.

Furthermore, Exel's supply chain planning at HM was done by merchants


and planners who lacked supply chain knowledge, experience, skills,
talents, and confidence. The company's expertise is required to reduce
costs while maximizing the value added logistics services supplied by
Exel, which boost HM performance.

The organization will be able to improve supply chain planning with a


better grasp of supply chain execution. Before executing the strategy, the
firm must choose whether entering into joint planning with Haus Mart
would benefit the company in the long run and provide a better interest
for Exel PLC or whether it is preferable to pass up this chance. If the
corporation fails to meet its shared planning goals, it will incur significant
expenditures. As a result, the company should devise a sound strategy for
dealing with the risks that come with starting a new business while still
increasing revenue and earnings in the future.

2. Did they have the capabilities and skills to manage an entire supply
chain, from planning to execution?

Ans. Exel has strong capabilities and talents in controlling the execution
process, and they were able to reduce the cost of moving and storing
goods. They were also able to speed up the delivery procedures, but only
a tiny percentage of their customer's supply chain costs, improvements,
and possibilities were represented. Haus Mart (HM), on the other side,
was strong at supply chain planning since they had some capable planners
and merchants who were generating supply chain plans. HM's execution
was lacking. The merger of HM and Exel would enhance their operations
since they would have all of the talents and expertise necessary to manage
a whole supply chain, from planning to execution.

3. Did they have the necessary management bandwidth for HM project


and the other customers who could well request the same service?

Ans. Exel and HM possessed some of the required management


bandwidth since, before to entering the process, they had planned to build
a well-defined, proven management plan for their staff, similar to the one
they had built for their distribution facilities. They had precisely defined
each employee's tasks and functions so that they could perform
efficiently. At DC, Exel had a talent matrix chart that showed all of the
duties done in the DC as well as the activities that each employee was
responsible for. Employees at Exel were given training in operating
management and methodology. Exel has a simple and precise system in
place for assessing each site's productivity in each function, comparing
figures, noting improvements, and exchanging recommendations. Exel
also put in place a well-defined and well-proven management system.
They had a team of twelve trainers who assessed employees' abilities on a
regular basis by asking them to do specified tasks.

4. Was HM the right setting for a test of this new strategy?

Ans. Exel officials anticipated that if Haus Mart and exel worked together
on planning and execution, HM planners would benefit from exel's
extensive supply chain experience. This would result in immediate and
substantial cost reductions for HM. Exel also discovered that HM
planners failed to take advantage of some efficiencies due to their lack of
awareness about their supplier chain.

Common questions

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Exel's management system significantly enhanced the productivity of their operations by integrating structured performance tracking and employee development. The system used a talent matrix chart to clarify responsibilities, ensuring staff were appropriately assigned tasks based on their skills and experience . Regular assessments and training by a team of twelve trainers ensured continuous skill enhancement and adaptation to changing operational demands . These structured processes facilitated productivity improvements, highlighted enhancements, and enabled the exchange of operational recommendations, ultimately leading to more efficient management of distribution centers .

Exel's management ensured they had the necessary bandwidth for the Haus Mart project by deploying a well-defined management plan similar to the one developed for their distribution facilities. They specified precise role definitions and responsibilities, utilizing a talent matrix chart to align employee duties with operational needs . This approach facilitated efficient task management across projects. Additionally, they maintained a team of trainers for continual assessment and skill development, ensuring that staff could meet both HM project requirements and demands from other clients .

Cooperation between Exel and Haus Mart could lead to cost reductions for Haus Mart through the application of Exel's extensive supply chain experience to enhance planning and execution processes. By aligning with Exel's well-managed execution strategies, Haus Mart could mitigate inefficiencies in their supply chain, potentially achieving substantial and immediate cost savings. Additionally, by participating in joint planning, Haus Mart might benefit from more efficient resource allocation and optimized logistics, further reducing operational costs .

Exel's training and performance assessment methods contributed to their supply chain management success by ensuring a skilled and adaptable workforce capable of meeting evolving supply chain demands. The training provided employees with operating management and methodological knowledge crucial for efficient task execution . Regular performance assessments by trainers allowed Exel to evaluate and enhance employee capabilities consistently, leading to improved operational performance . This continuous development cycle ensured that Exel could maintain high productivity levels and adaptability in a fast-paced supply chain environment .

Exel implemented several mechanisms to ensure effective employee performance in their distribution centers. They developed a talent matrix chart detailing all duties and responsible employees, providing clear task allocation . Employees received training in operating management and methodology, preparing them well for their roles . Furthermore, Exel established a management system where twelve trainers regularly assessed employees' abilities by assigning specific tasks, ensuring continuous skill development and productivity improvements .

The talent matrix chart is crucial for managing operations at Exel's distribution centers as it provides a structured overview of all duties and the corresponding staff responsibilities . This clarity helps allocate tasks effectively, ensuring that each employee understands their role and expected outcomes. Such organization supports operational efficiency and helps managers assess productivity across different functions. Additionally, combining the chart with regular training and performance assessments allows for ongoing skills enhancement and alignment with organizational goals, leading to overall improved distribution center management .

Haus Mart was deemed an appropriate setting for testing Exel's new supply chain strategy as it offered an opportunity for both companies to leverage each other's strengths. Haus Mart's planners could immediately reduce costs by utilizing Exel's extensive supply chain execution experience . Additionally, Exel recognized inefficiencies within HM's supply chain due to a lack of planner awareness, suggesting that collaboration could yield substantial efficiency improvements . The setting provided fertile ground for demonstrating and refining Exel's strategic objectives in a real-world context .

Exel faces challenges in supply chain planning due to a lack of internal capabilities compared to their strong execution strengths. Their current planning is handled by Haus Mart's merchants and planners, who often lack the necessary supply chain knowledge and skills, leading to inefficiencies . To overcome these challenges, Exel could invest in developing internal planning expertise, potentially through training programs and hiring experienced planners. Furthermore, partnering more closely with Haus Mart for joint planning could allow them to leverage external capabilities in the short term while building up their internal resources for long-term planning success .

Before engaging in joint supply chain planning with Haus Mart, Exel must consider whether the long-term benefits outweigh the potential costs and risks. The primary benefits include adding value to the supply chain, reducing costs, and enhancing Haus Mart's (HM) operational performance by leveraging Exel's supply chain execution capabilities . However, Exel needs to improve in supply chain planning, as current HM planners lack the experience and skills necessary for effective execution . The risks include significant costs if shared planning goals are not met and the potential failure to develop the required planning capabilities. Exel should thus devise a sound strategy to manage these risks while ensuring revenue and earnings growth .

The merger of Exel and Haus Mart enhances their supply chain management capabilities by combining Exel's strengths in execution with Haus Mart's planning abilities. Exel is adept at reducing costs and speeding up delivery processes, while Haus Mart has some capable planners for generating supply chain plans . This integration fills the gaps in each company's capabilities, allowing them to manage the entire supply chain effectively, from planning to execution. The combined expertise and talents form a more competent management team, improving overall operational efficiency .

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