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Group 8

Rupali
Saurabh Patle
Nishkarsh Tomar
Anjali Lakra
Anshul Singh
CASE FACTS

Started in 1975 in Palo Alto, California by Randy Repass

252 stores accounting for 82 % of total business

18 % sales through Internet and catalogue orders, which had 50,000 SKUs

Market share of 7.3 % with 440 million in sales in the boating industry

Primarily 3 types of stores- SKU, Express stores, Megastore

Stores were concentrated in three primary US boating markets- West coast,


North coast, South coast

It had lower sales per square foot and fewer inventory turns as compared to
other competitors
Pitfalls of executing an acquisition when the company
does not have a solid supply chain foundation

West Marine and E&B customers were frustrated by not being able to find
what they needed , when they needed.
Out of Stocks reached 25%
They created a lot of damage to both the chains by pulling down E&B signs
and converting to West Marine Brand
DC workers overworked
Warehouse cost mushroomed
Departments became Silos, sense of protectionism and secrecy within and
across departments increased
Sales dropped by 8%
EPS dropped to $0.06
Net income dropped from $15.2 million in 1997 to $ 1.1 Million in 1998
Supply chain activities became more chaos
Supply chain improvements for West Marine to
turnaround its supply chain performance

In late 1998, John Edmondson was brought to lead as the CEO of the company.
To improve the turnaround of the company he focussed on the following four areas-

People Systems
Leadership Strategy and and
Culture Processes
Supply Chain Improvements(cont..)

Leadership:
All the areas where the business was falling, key players were changed by veterans
More experienced people in respective area in management team
People who has worked in multibillion dollar companies.

Strategy:
Developed five year plan which would be updated on an annual basis
Each executive was given the general mandate to turn around his respective function
West Marines vision of being the best boating products company everyday
Financial goals (company wide performance indicators), that include ROE, cash flow, comp
sales, EPS, productive service levels, market share, customer satisfaction and associate
satisfaction.
SWOT analysis for itself and grabbed the opportunities in coming years.
Supply Chain Improvements(cont..)

People and Culture:


Cultural change drive on the idea of providing better than expected
customer service.
The leadership team addressed all the problems head on
Redefining roles, the silos mentality was totally abandoned
New transparent communication was established
Systems and Processes:
The new management team started attacking every falling process
Reviewed tens of thousands of processes
Reinvented all systems to figure out how the ongoing SG&A can be taken
out of the business at the same time as the operations starts more
effectively

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Supply Chain Improvements(cont..)

Supply Chain Collaborations:


Particular emphasis was laid on changing the Supply Chain Management
Practices at West Marine. The supply chain improvements started with
team putting halt to all store expansion to relieve some of the immediate
pressure on the supply chain.
Critical importance was placed on improving end-to-end supply chain
visibility and effectiveness, driving down related costs and improving the
level of supply chain collaboration within and outside west marine.
The company then decided to go for Collaborative planning,
forecasting and replenishment (CPFR).
Why CPFR?

Collaborative Planning, Forecasting and Replenishment combined and capitalized on the


intelligence of multiple trading partners in the planning and fulfilment of customer demand
Works on the development of a single, shared forecast that supported the joint plans of the
trading partners
Clear performance measures are defined to document operational performance
expectations
Risk is monetized so that partners faced clear financial consequences
Incentives were used to motivate collaborative, cooperative behaviour and to share the
benefits
Exchange of more timely, complete and realistic forecast data, which led to higher
forecasting accuracy
Linked best practices of sales and marketing divisions
Adopted conventional order management, with the retailer driving forecast, order planning
and order generation
Implemented a successful, robust linkage between the point of sale and DC systems to
maximize automation and mass maintenance procedures which gave multi echelon
replenishment solutions
Implemented EDI using SPS commerce solution
CPFR benefits to West Marine:

Stock rates at the


stores came close Forecast accuracy
to the goals of climbed up to 85%
96% in every store

On time
shipments also
improved

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Why Option A (conventional order management):

Buyer driven forecast


Belief that buyer usually also depends on only one
drives the key events that technological platform, so
crack the bullwhip in the it is scalable across many
supply chain items and suppliers with
similarly accurate results
Yes, West Marine is ready for Boat US acquisition

Increased market penetration: BoatUS is on east coast while West Marine


is on west.
Consolidation of industry: If these companies tries to expand, they will eat
away each others market share
Improvement in operations of West Marine after CPFR

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Challenges in acquisition and how to
overcome them

Requirement of Vendor and SKU rationalization effort

If going for Dual-Branding Strategy and decides to maintain the BoatU.S. brand,
the company has to develop a more diverse product base and more unique
assortments.

Integration of the replenishment activities

Overall complexity involved in the supply chain integration of both companies is


high since both offered 50,000 SKUs via stores, internet and catalogues.

The experience gained from the CPFR needs to be used and applied for the
successful integration of two companies.
Recommendations for Acquiring BOATU.S.

Seek long-term, holistic solutions, not quick or myopic fixes and reconcile
conflicting goals and metrics

Pursue inclusive problem-solving; do not depend upon experts who dont have
accountability for the business

Install collaborative processes that encourage idea creation, shared problem


solving, and high adoption rates across organizational boundaries

Use a disciplined and iterative set of methodologies such as CPFR, SCOR, or Six
Sigma to help teams define issues, root causes, and solutions

Develop a culture of continuous improvement, particularly at the customer-facing


associate level
Recommendations for Acquiring BOATU.S.

Create clear accountabilities and assign authority with a focus on core business
processes rather than on traditional organizational silos or loyalties

Commit to technology enablement for execution, communication, exception


management, and root-cause analysis

Warehouse replenishment - Responds to all store-level overstocks and under


stocks which eliminates duplicate forecasting

Integration of DC in 30 days post acquisitions and in-store operations in 60 days


Supply chain opportunities West Marine should
pursue as the company looks forward

Level of inventory network joint effort

Drive down inventory network costs

Improve inventory network arranging and estimating

Fully fuse EDI framework

Establish estimating amongst providers and clients

Warehouse administration frameworks

Implement a stockroom control framework


THANK YOU

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