Exel Plc Supply Chain Management At Haus Mart Harvard Case Solution & Analysis

Company Background

Exel is the world’s largest provider of freight management and contract logistics. The company was created in 2000 through the merger of MSAS, a freight management company, with Exel Logistics. The company’s 44% of sales come from freight management and 53% from contract logistics, and remaining 3% from environmental services. Moreover, Haus Mart (HM) is one of the Germany’s leading retailers of home textiles, house wares, and home accessories. The Haus Mart Company’s 30% of sales come from private-label merchandise, and 70% of sales come from brand-name merchandise.

In 1980, Exel’s first assigned contract with HM involved regional transportation of goods from Haus Mart’s DC in Hamburg to its stores. In 2002, the business development of the company and solution designed teams started working on Haus Mart. Apart from that, Exel initiated a new model known as customer’s Lead Logistics Partner (LLP), a joint team to design and manage a single flow linking together transport, warehousing, manufacturing, and suppliers. HM and Exel are considering expanding their cooperation and involving Exel in supply chain planning with supply chain execution. Moreover, the employees in the organization have structured knowledge of the business process being performed in the company.

Furthermore, Exel provides its clients services ranging from traditional warehouse and distribution center management and local transportation to various value-added services such as assembly, software installation and in-store logistics. The basic purpose of the company is to provide quality logistics services to its clients in less time with cost-effective strategy. Moreover, Exel develops a very effective process of creating and selling new services by a sequence of four teams such as business development, solution design, implementation, and operations. Furthermore, the company has experience in coordinating the different elements of a supply chain and wants to move into supply chain planning to execution.

The company’s growth opportunity strategy is to sell more services to existing customers. Moreover, the company’s relationship with Maxtor, a leading supplier of hard disks of the computer manufacturer, provides an opportunity to integrate logistics service that could add value. The objective of the company is to provide effective logistics services with quality products and services to gain the customer’s satisfaction in the long term and increase its revenue and profits.

PROBLEM STATEMENT

According to the case, Exel wants to move into the supply chain planning with supply chain execution and add more value to the supply chain. The company’s execution strategy is strong enough, but the focus on planning is needed. Moreover, the company has better competencies for effectively managing the execution process, but it lacks core competencies to manage the supply chain planning.

Furthermore, Exel’s Supply chain planning at HM has been done by merchants and planners who lack knowledge, expertise, skills, abilities and confidence in the supply chain to make the best decision for optimization of supply chain. The expertise of the company needs to minimize the costs and maximize the value added logistics services provided by Exel, which improve the HM performance of their whole supply chain and huge costs saving.

The better understanding of the supply chain execution will help the company in improving the supply chain planning. The company needs to analyze whether moving into the joint planning with the Haus Mart will benefit the company in the long run, and create a better interest for Exel PLC or availing this opportunity before implementing the strategy. If the company fails to achieve, its targets of joint planning will cost leads to high costs. Therefore, the company should develop an effective strategy to deal with risks associated while entering the new business and increasing its revenue and profits in the future.

Exel Plc Supply Chain Management At Haus Mart Case Solution

DATA ANALYSIS

The company started its operation in 2000 and in 5 years it started growing with the net cash flow increase of 30% compound annual growth rate and turnover rate of 3% CAGR. This result indicates that the company has a level of operational excellence with the cost cut strategy and increase in net cash flow. Exel’s 44% of sales come from freight management and 53% from contract logistics, and remaining 3% from environmental services. In the year 2003, the company was serving 70% of the world’s top 250 non-financial companies. Moreover, the company created a positive relationship with its customers, over 75% of its contracts in contract logistics were renewed after the initial contract period.....................

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