Case Study: The Club War

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The given case “The Club War” is about a company called Sam’s club which is price club began in 1976 which offers distinctive advantages to its members by selling the lowest price to their merchandise and customers. The strategy of the company was to achieve greater operational efficiency, at lowest supply chain cost, low warehouse prices, better deals on merchandise and improved customer satisfication.

Current Jim’s re-engineering team on processing an “as-is” analysis that point to understanding the current status of supply chain such as strengths, weaknesses, opportunities and it found 10 inefficiency which are discussed hereafter.
There was too much amount of freight moving in non-truckload quantities which would accumulate freight cost
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The simplest and easiest ways to immediately cut inbound freight costs is to change shipping terms from —“prepaid” to —“collect”. Vendors or suppliers shipping recieve on Sam’s club recommended carrier eliminates any handling charges. Once the club gain more control over inbound shipping, it can save on packaging and freight shipments.
The loss and damage cost can not avoid. However Jim needs to re-evaluate the quality and delivery history of the service hired by suppliers before deciding suitable incoterm. In addition, Jim needs to consider the purchasing decisions in term of the current transportation inefficiencies. In the transportation and distribution network, Jim could use the effective of Tailored Network which is combination of TL, LTL, cross-docking and Milk runs which can further help in reducing cost and improve the responsibility of Sam’s Club supply chain.

As seen in the case, Sam’s club should examine their purchasing, sourcing and logistics mechanisms and set them to organizational strategy. In the price club or warehouse market, the main point is the efficiency lowest possible cost. Sam’s club need to consider every possible opportunity to improve efficiency and reduce cost in their current operating without losing parts of their core competency that will enable them to achieve greater

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