LOGISTIC STRATEGIES OF 3 COMPANIES

COMPANY A: SHENG SIONGCOMPANY B: IKEACOMPANY C: DELL

Strategy 1: Distribution Centre

DISTRIBUTION CENTRE

OUTLET 1

OUTLET 2

OUTLET 3

OUTLET 4

SUPPLIER 1

SUPPLIER 2

SUPPLIER 3

SUPPLIER 4

• Minimize Transportation Cost and fuel costs.• Reduced operating expenses • Process larger quantities of goods• Centralized operations - Inventory, Warehousing and distribution all

under one roof • Reduced in labour cost• Centralize distribution centre to optimise inventory holding and lower

distribution costs

Strategy 2: Technology

Pick-to-Light Warehouse Management System

• Achieve zero error in goods handling• Reduce headcount• Productivity improvements of up to 25% to 50%• Paperless solution increases pick rates and accuracy • Reducing walk time• Minimized training time• Quick staff ramp-up to handle seasonal peaks

Management Information System

• Assist in controlling and replenish inventory levels• Analysing operations aspects such as costs and human resource

requirements• PDA and barcode scanners help to provide real-time updates of inventory

information on various store locations• Identify fast and slow-moving products to minimize costs in maintaining

high inventory levels thus helping to allocate better space between products hence achieving greater sales performance

Strategy 3: Transportation

Transport Management System

• Consolidation of goods from d/c to various outlets location• Planned route to save fuel cost and time• Dedicated truck fleet of 34 trucks to deliver goods from d/c to

stores• Replenish the store shelves four times a day

• Founded in Sweden (1943): HQ in Nertherlands• Privately held , international home product • Specialized in affordable self-assembly • 349 stores in 43 countries in January 2014

Introduction of IKEA

• Using flat packs :reduce costs in transportation , lowered storage space and decreased transportation damage .

• Transportation goods where possible by rail and sea in large quantity

• Utilizing fuel-saving techniques that allow to be cost-effective and environmentally friendly.

Strategy 1: Packaging

• Sourcing materials close to the supply chain to reduce costs• Building DC closer to seaports so that it can use more on ocean

and reduce transport on flight • Delivering products directly from supplier to IKEA stores to cut

the handling cost , reduce road miles and lower the carbon footprint

Strategy 2: Facility location

Strategy 3: Technology( JDA ) Warehouse Management System

• Increased visibility in the sales patterns of the IKEA products• Improved forecast accuracy• Improved planner experience and productivity through exception-based

management• Enabled the consolidation of supplier base with a focus on low-cost countries• Increased overall supply chain visibility and efficiency

Introduction of DELL

• Founded by Michael Dell in 1984• Company headquartered in Round Rock, Texas, U.S.A.• Third largest PC vendor in the world after HP and Lenovo• With more than 103,300 employees today• It’s revenue around US$63.07 billion in 2012

Strategy 1: Technology

• Integrated Dell desktop (IDD) system connects directly to customer

Strategy 2: Inventory ControlDirect sales model

• Dell sells product directly to customers. From suppliers to final customer thus Dell does not carry any inventory

• Cutting out middle man • Cut delivery time to meet the needs of the consumer

Build to order

• Dell manufactures a product only after customer places a order• Configure-To-Order program allows c• Does not need to maintain additional inventory that will incur in inventory cost • Eliminate risks of carrying large finished goods inventories• Build direct customer relationship• Maintain latest technology• Just-in-time manufacturing

Strategy 3: Customer Service

• Selling the full product range online• Customer can customize the product they needed• Provided free on-site service for a year after sale• Contracted with local service providers to handle customer

requests for repairs• On-site service was provided on a next-day basis• Technical support via a toll-free number, fax and e-mail• 1300 technical support personnel accessible by phone 24 hours a

day