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Hausmart and Exel
Transcript of Hausmart and Exel
By Yisi Du,
Kelly Snide, Shaofei Han, and
John Crepeau Background Information Alternative Solutions Solution #1 Advantages
HM’s Private Label has all 300 manufacturing facilities located close together in Turkey.
Turkey is also in close proximity to Germany where all 350 HM stores are located. Disadvantages
Run the risk of ruining an already good relationship between HM’s existing planners and their merchants.
They could decrease the loyalty of Private Label customers by having shortages or stock outs, if planning isn’t done properly. Haus Mart
One of the Germany’s leading retailers of home textiles, warehouse, and home accessories.
30% of sales came from private-label merchandise
70% of sales came from brand-name merchandise Exel
Created in 2000, through the merger of MSAS and Exel
World’s largest provider of freight management and contract logistics services
44% of sales came from freight management
53% of sales came from contract logistics services Main Issues Metrics Solution #2 Advantages
With Exel’s already proven worldwide capabilities, communicating globally with all the different suppliers wouldn’t be a transition.
They could work with merchandisers and not only save HM money but get a foot in the door to potential new clients. Disadvantages
Much larger task and the risk associated with making a mistake is monumental as Brand-Name merchandise makes up 70% of total sales.
Exel would have to hire and train new employees, all of which might have language barriers dealing with various merchants all over the world. Solution #3 Advantages
Planning would be done uniformly for all products for the entire company.
This would increase the working relationship with HM and introduce Exel to many new potential clients.
This would increase Exel’s profitability while maximizing HM’s cost savings Disadvantages
Could fail miserably and ruin one or both companies
Could become too lengthy of a project and hurt one or both company’s reputations.
Could take resources away from already well ran aspects of the companies. There is an opportunity for Exel to move into Joint Planning for their clients. Exel can add benefits to their clients supply chain by taking advantage of certain efficiencies and economies of scale that their clients currently are not using. Offering this service does represent some risks… Although Exel has a deep understanding of Haus Mart’s supply chain they have never tackled planning for any of their clients.
There is a chance that if Exel moves into the Planning side of the business then Exel’s clients will require Exel to invest in their company
If Exel fails with Joint Planning could cost them clients and their reputation Our first alternative would be to have Exel take over the planning for HM’s Private Label merchandise. Our second alternative is having Exel take over the Brand-Name merchandise planning for HM Our third alternative would be to take over all of the planning for HM. This would comprise of Private Label and Brand Name merchandise. •Percentage of Stock Outs (Ideally less than 10%)
•Decrease the Amount of Inventory (Only have what is needed, no safety stock)
•Decrease Shipping Costs (Decrease the amount of shipping redundancies will overall decrease the amount of money needed to be allocated to shipping expenses) Relationship between Exel plc and Haus Mart
Exel first assigned contracts with HM in 1980
Exel handle freight management of private-label products
In 2002, Exel’s business development and solution design teams started working on Haus Mart
In 2003, HM awarded the management of five of its six DCs to Exel •Percentage of On Time Deliveries (Ideally somewhere from 95-99%)
•Percentage of Correct SKU and Quantity Deliveries (Ideally between 95-99%)
•Decrease Inventory Holding Costs (Decrease the amount of inventory and only carrying what is needed at the right time will lessen the overall amount of time inventory sits in the warehouse, but also the amount of overall inventory compounding holding costs) By June 2003, The implementation team started working on the transfer to Exel
Human resources front
Operation team took over. They began training employees on the Exel Operating Management and Methodology (EOMM) system