Case 2: Woodmere Products Judith M. Schmitz
John Smith had just returned from what may prove to be one of his most important sales calls. John, a sales representative for a top furniture manufacturer, had been meeting with a representative from HomeHelp, a major home decorating retailer. It seems the buyer, Nan Peterson, and the product team she heads had just returned from the annual Council of Supply Chain Management Professionals. At the conference, Nan’s team had attended several sessions on time-based logistics strategies. Even though Nan and her team had just been exposed to the new strategies, they felt it had the potential for significant competitive advantage in their industry.
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HomeHelp’s main concern is that the furniture industry as a whole appears to be trailing other industries in terms of sophisticated logistics operations. For example, the furniture industry has invested little in information technology and maintains high inventories throughout the channel, including at the retail level. The results other firms reported for their innovative logistics applications gave HomeHelp a new insight into how an alliance with a furniture manufacturer might create a best practice distribution system with lower costs and less inventory. Nan told John that his company, Woodmere, had the potential to achieve an exclusive distribution arrangement with HomeHelp if the two companies could create time-based logistical capability. Woodmere was chosen since the business press had recently featured articles on its new organization plan that focused on channels of distribution and leading-edge logistics strategies. In addition, Woodmere was beginning to invest in information technology. Nan felt both companies should be able to reduce overall channel costs and offer customers superior product availability. Her specific request was for John to formulate a tentative proposal within 3 weeks to strike while the iron was hot. Nan knew the timing and unexpected opportunity created