55434898-Crocs-05-13-11 - MS-797, Global Supply Chain...

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Unformatted text preview: MS-797, Global Supply Chain Management StrategiesAssignment #2, Mike StollDue Date: 05/15/11Map the supply chain structure chosen by Croc's management and key decisions at major echelons along thesupply chain?Raw Materials USA & Europe (Outsourced)CompoundingCanada, China, Mexico (Company Owned)Manufacturing/Molding/AssemblyCanada, Mexico, Italy, Brazil (Company Owned)Bosnia, China, U.S. - Florida (Contract Manufacturer)Warehouse/DistributionCanada, Mexico, Italy, Brazil (Company Owned)Denver (Contract Warehouse)China (owned by Crocs supplier, but run by Crocs)CustomersLarge Retail DCs and Small ShopsKey DecisionsCompoundingCrocs bought out Finproject who was the Canadian manufacturer who created the Coslite resin from raw material pellets. Crocs now controlled the IP over the unique material that made their shoes so unique. They eventually established state-of-the-art compounding facilities in Canada, Mexico, and China.ManufacturingCrocs initially used contract manufacturers to product their products, but found that many of them wanted long-term forecasts, formal contracts, and other demands. Only the contract manufacturer in China was flexible, responsive, and could handle high volume orders. Based on this, Crocs decided to assume responsibility for manufacturing and developed company owned plants in Mexico, Italy, and Brazil (including their original Canadian plant). Besides China, they still outsourced some manufacturing operations to plants in Florida and Bosnia.Warehouse/DistributionIn the beginning, Crocs was using a contract warehouse in Denver to handle all of its shipments. They felt this centralized warehouse/distribution operation was inefficient, so they added company owned warehousing operations to all of their manufacturing sites. Crocs wanted to control order fulfillment. They tried using 3rd party warehouses which did good in the short term, but seemed to lose interest in the business, which is why Crocs decided to also take control of this part of the operation.SummaryCrocs utilized a postponement strategy by having compounding facilities close to manufacturing plants. They would typically ship larger orders to Retailers from the factory, and small orders from the DCs. They had different fulfillment models based on the type/size of the customer. The supply chain chosen by Crocs is vertically integrated. This provided them with a lot of control over the SC, but this also tied up capital in external operations. What are Croc's core competencies and how does the company exploit these competencies 2. (hint: VRIN)?...
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55434898-Crocs-05-13-11 - MS-797, Global Supply Chain...

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