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Crocs Case study
Transcript of Crocs Case study
Strength & Weakness
Internal Environment Analysis-7S
Crocs supply chain
Examples of our arguments
Proprietary closed cell-resin ( Croslite )
Sell world wide
Go public in February 2006
Footwear industry mode
External environment analysis
7. Staff-Value the employees
Health and Safety
passionate and ambitious
High involvement in company affairs
2. Structure: Internal-flat
IBM® Sterling Order Management
The replenishment system
4. Shared value: sustainability
Hear staff’s voice
Executive lunch and learns
Crocs Leadership University
It does not have patent protection on its proprietary Croslite material
Crocs does not hedge its exposure to foreign exchange
There is anti-Crocs sentiment in the market
Buy raw materials
Manufacture & Assemble
Warehouse and DC
Europe & USA
China, Italy, Mexico, Canada
, Romania & Bosina, Florida
Denver Distribution Center
Inaccurate sales forecast
Excess manufacturing capacity beyond the actual manufacturing plan
Relies too heavily on key manufacturer (China)
limited number of sources for the primary materials
Key Supply Chain Issues
High brand awareness in the market.
Corporate with other famous brands.
Establish a good relationship with retailers
Sales channels are diverse
Company financial performance is highly concentrated on footwear sales.
The threat of substitute products is high.
Rapid expansion of operations could generate negative impact on service and product quality.
➢ Additional suppliers
➢ Into long-term contracts
➢ New or innovative uses
Foam Creations (Owned by Crocs)
Compounding Company (Third party)
Manufacturing Company (Third party)
Warehouse (Third party & owned in China)
➢ Outsourcing or acquisition
➢ Special trade zones
Crocs – Nike (subsidiary)
Complex and expensive supply chain
Existing manufacturing and warehouse facilities
Unique product in the market
(color, material, style & size, feeling)
7 Principles of SC Management (2007 Journal of SCM Review)
1. Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably.
2. Customise the logistics network to the service requirements and profitability of customer segments.
3. Listen to market signals and align demand planning accordingly across the SC, ensuring consistent forecasts and optimal resource allocation.
4. Differentiate product closer to the customer and speed conversion across the supply chain
5. Manage sources of supply to reduce the total cost of owning materials and services
6. Develop a SC wide technology or system that supports multiple levels of decision making and provide a clear view of the products flow, service and information.
7. Adopt channel spanning performance measures to gauge collective success in reaching the end user effectively and efficiently.
Current ‘Bullwhip Effect’
Hybrid of Lean Replenishment Production & Agile Supply Chain
What about the long term?
Highly flexible supply chain
-Electronics contract manufacturing backgrounds
-React to market instead of predicting it
-Innovations of warehousing model
-Molds transferring between production locations
-Local production & highly efficient international contract manufacturers
-Moving critical process in-house