S&A Processed Seafood Company S&A Company is a distributor of processed seafood

Question

S&A Processed Seafood Company S&A Company is a distributor of processed seafood products. Over the past several years, S&A Company has grown through acquisition to expand their product line. That broader offering of products has improved sales in their current focus area of Western Europe. Sales have improved with the new product acquisitions, but S&A now wishes to expand the entire product line into more of Eastern Europe. However, the company realizes that their current model of putting a distribution center (DC) in each country that they service may no longer be the best option as they look to expand. Their increased sales and plans for aggressive growth will now require greater concentration on the design and operation of their supply chain. S&A Company is looking to drive significant organic revenue growth in the European market growing from $340M (as of the end of the fiscal year ending June 30, 2017) to $550M over the next 3 years. They need a supply chain strategy that helps them answer some fundamental questions regarding the expected inventory (in case units and value) and flow of goods that will be required three years from now to support the desired sales growth. The company needs advice regarding the supply chain network, infrastructure and processes needed to serve its customers within the expected delivery window while optimizing costs. Products, Customers, Sales, and Costs S&A currently has five product lines that they sell to retailers in seven countries (see data page). Customers for all product lines, except Processed Mussel, currently expect a 36- hour delivery window. Processed Mussel customers have traditionally allowed delivery to take up to a week. The company now has one DC in each of its seven markets and supplies each market from the DC in that country; for example, orders from customers in Hungary are handled by the DC in Hungary. S&A sources all products from suppliers in Thailand. Because the company’s headquarters is in London, all products are currently shipped from Thailand to the DC in UK and then are distributed to the other DCs (See Figure 5). Each of the S&A DCs have the ability to ship in bulk (from DC to DC) and parcel (from DC to customers), plus ship domestically and internationally. S&A’s Thai suppliers sell products at FOB, and the processed seafood is shipped in bulk via sea freight from Thailand to the UK. The product is then shipped via trucks in mainland Europe. Page 2 of 5 Copyright © 2017 Deloitte Development LLC All countries and DCs have the ability to receive product directly from Thailand; however, due to quality assurance requirements, Processed Mussels must be imported into the UK for inspection before distribution to other countries. S&A believes that it is not operating efficiently and would like to assess the current network vs. reducing the number of DCs to three. Also, from its experience, the DCs and the entire supply chain network start to experience operational challenges when utilization is high. Additionally, the company believes that the warehouse fixed costs per case will not change soon. S&A has seen cost of goods sold (COGS) for high growth product lines (annual growth greater than 15%) decline by approximately 5% annually. Inventory costs per case for all product lines have been declining at 4% annually due to improved technology. The company does not anticipate any significant changes to the average price per case for each product line over the next three years. It also appears that freight costs will be stable over the next three years. One of the firm’s goals is to meet or exceed the industry benchmark of inventory turnover of fifteen. S&A has a standard case size for all their product lines. The company has asked for your perspective on the Supply Chain of the future including, ? Competitive Position within the Supply Chain

Explanation / Answer

In today’s complex connected world supply chain is indeed more acknowledged as a key source of competitive advantage and differentiation. Furthermore organization endeavor to develop powerful supply chains thus eventually facilitating them get their products in market more quickly, efficiently and economically than their competition.

For instance business dealing in high tech, consumer electronics, pharmaceutical and fresh produce appropriately timing their products in the market through effective distribution channels are indeed regarded to be the crucial element for their success. Furthermore supply chain management competencies and capabilities eventually do effectively facilitate to drive business competitive advantage.

Supply chain and marketing functions in an organization are indeed regarded as the most important coercive functions in the modern era because they together can embrace all of the mission-critical business activities whereas IT, HR and Finance eventually facilitate in playing significant supporting roles.

Supply chain encompasses effective planning, sourcing, making, delivering and returning policies pertaining to operational activities. Furthermore logistic becomes the point of connection and divergence thus facilitating with crucial linkage between supply chain delivery function and distribution purpose of marketing.

Nevertheless strategy of achieving continuous improvement through consistently and persistently endeavoring on strengthening the weak link which companies effectively adopt as an approach to consistently keep strengthening their worldwide supply chain ecosystem eventually does efficiently facilitate in attaining competitive advantage in present multifaceted connected world.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.