West marine case study

West Marine: Driving growth through
Shipshape Supply Chain Management

Case Solution

Submitted By
Ranjeet Kumar Singh (11BM60068)

West Marine: Merger with E&B

Incident
 In 1997 , West Marine acquired an East Coast competitor, E&B Marine
 Sales fell by almost 8 %
 Peak-season out-of-stock levels rose more than 12%
 Supply Chain was badly hit
 West Marine not enough to support an organisation double its size

West Marine: Strategy Focus post 1998.. (1/2)

1. Leadership
 Key players were changed by veterans from the industry
 People were recruited based on experience in large and complex retail
organization

2. Strategy
 Each executive was given the mandate to turn around his respective function
 Strategic plan started with West Marine’s vision of being ‘the best boating
products company everyday’
 Outlined performance indicator goals - ROE, cash flow, comp sales, EPS,
Productive Service Levels, Market Share and customer & associate satisfaction
 SWOT analysis

West Marine: Strategy Focus post 1998.. (2/2)

3. People and Culture
 Cultural Change drive on providing “better than expected customer service”
 Leadership team addressed all the problems head on
 Outside experts in cultural change were brought in
 Significant effort was put in redefining roles
 Silos mentality was transformed to new transparent communication

4. Systems and Processes
 Every processes were reviewed and reinvented
 Strategy was focused on take SG&A out of the business at the same time to starts
the operations more effectively

Supply Chain Collaborations

 Particular emphasis on changing the Supply Chain Management Practices
 Supply chain was more complex as compared to most speciality retailers.
 E&B acquisition further compounded supply chain challenges by adding more
stores, new SKUs and different assortments.
 Improvements started with team putting halt to all store expansion to relieve
immediate pressure
 Critical importance was placed on improving end-to-end supply chain visibility and
effectiveness, driving down related costs and improving the level of SCM
collaboration within and outside west marine.
 Also, later focus shifted to Collaborative planning, forecasting and replenishment
(CPFR).

CPFR: Implementation at West Marine (1/2)

 Collaborative Planning, Forecasting and Replenishment- combined & 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.

CPFR: Implementation at West Marine (2/2)

 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
 Stock rates at the stores came close to the goals of 96% in every store
 Forecast accuracy climbed up to 85%
 On-time shipments were also improved.

STRATEGIES - For Proposed Takeover of BOATU.S.

 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. (1/2)

 Seek long-term, holistic solutions, not quick or myopic fixes
 Reconcile conflicting goals and metrics
 Pursue inclusive problem-solving; do not depend upon “experts” who don’t 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. (2/2)

 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
 Reduce decision cycle times and Implement rapidly
 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

West marine case study

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