7/31/2019 Perdue Farms Case Solution

1/18

Supply Chain Management

Meets the Holiday Season

Presentation by-

Hitesh Bhatia A011

Annesha Ghosh A020

Astha Saith A046

7/31/2019 Perdue Farms Case Solution

2/18

Company Information

Major Chicken processing company

Based in US, Annual sales over $4.6 Billion

Established in 1920 End to end solution, from farm till table

7/31/2019 Perdue Farms Case Solution

3/18

What is SCM ??

Supply chain management is aimed at managingcomplex and dynamic supply and demand networks.

Information Flow

Raw Materials

RETAILERFACTORY DC RDCSUPPLIER

Finished Goods

7/31/2019 Perdue Farms Case Solution

4/18

Why did Perdue Farms feel the need of

IT in SCM ??

7/31/2019 Perdue Farms Case Solution

5/18

Moment of Truth!!

Holiday SeasonToughest time formanufacturers andretailers

Supply ChainWeakness exposed

Difficulty in salesestimation

Supply Chain

Weakness

exposed

Difficulty in sales

estimation

Window to respond to

fluctuations is short

Unpredictable Consumertastes

Elongated supply chain

7/31/2019 Perdue Farms Case Solution

6/18

Existing Supply Chain

Sourcing from Asia(As lower costs)

Long RouteEarly Sourcing

Decisions

Demand Uncertain at

an early time

7/31/2019 Perdue Farms Case Solution

7/18

Systems in Place

7/31/2019 Perdue Farms Case Solution

8/18

Constraints & Initiatives taken

CONSTRAINTS INITIATIVES

Inability to track delivery Vans

Time a critical factor in

poultry business

QUALCOMMs mobile communications

systemOmni TRACS

GPS system, where exactly the product

Communicate real-time with drivers

Better customer service Efficiency of drivers, more take home

income

Difficulty in estimation

Low Speed and flexibility

Manugistics forecasting software and SupplyChain tools

Product and geography-wise

Distribution Signaling - Actual sales and

Actual Inventory coordination

Substituting inventory with information

7/31/2019 Perdue Farms Case Solution

9/18

Constraints & Initiatives taken

CONSTRAINTS INITIATIVES

Inability to track everyday salesVendor management inventory control

systems to track sales in real time

7/31/2019 Perdue Farms Case Solution

10/18

Inventory v/s Information

Forecasting based on

seasonal history, gut feel

Inventory Stocked to respond

to demand fluctuations

End

Users

End

Users

Perdue

Farms

Perdue

Farms

Suppliers

Suppliers

7/31/2019 Perdue Farms Case Solution

11/18

Questions & Answers

7/31/2019 Perdue Farms Case Solution

12/18

Question 1

What are the key factors which determine the

success or failure of supply chains during holiday

season?

Which of these are under control of companies and

which are inherent in end-consumer business?

Provide some examples

7/31/2019 Perdue Farms Case Solution

13/18

Answer 1

Speed and Flexibility - Response to Volatile demand

Proximity of Warehouse to Retail store - Lead time

System integration - Efficient forecasting

Examples: GPS installed in trucks

Investment in latest technology for

communication

7/31/2019 Perdue Farms Case Solution

14/18

Question 2

Effect of gift Cards during holiday season on

Demand planning and Supply chain Management?

Suppose nothing is known about the recipients of

gift cards. What strategies can retailer and supplier

consider to accommodate these effects?

7/31/2019 Perdue Farms Case Solution

15/18

Answer 2

Surge in demand from customer will exert pressure

on supply chain, testing its capability

Make use of past data

purchases/ordering duringJanuary & February

Overhaul and revisit the entire supply chain

immediately after Christmas

7/31/2019 Perdue Farms Case Solution

16/18

Question 3

Prof Tomlin says that Smart companies substitute

information for inventory. What do you think he

means by this statement?

How do companies take advantage of information

to improve their inventory and logistic practices?

7/31/2019 Perdue Farms Case Solution

17/18

Answer 3

Optimal inventoryInformation system can provide

shelf life

Integration of supplier and retailer System-Efficient

demand management

Logistics can be planned in advance and deployed

efficiently

GPS tracks logistics-Helps in contingency planning.

7/31/2019 Perdue Farms Case Solution

18/18

Take Away

Managing Supply Chain using InformationSystem & Technology:

Speed and flexibility in supply chain

Everyday sales monitoring

Minimising gap between actual sales and actualinventory

Better customer service

Tackling changing customer demands

Cost effectiveness Reduction of lead time Growth of Business