You are recruited by the owners of New Balance (NB) and join them as their Supply Chain Manager at the time the case study was written and in the context of that time. In your first week on the job you learn a number of things;
i. There is about $ 400 Million $ of inventory (about 40 % of revenue ) in their two Distribution Centres (DC’s), which is considered to be a huge amount for a business of that sized based on your experience and benchmarking of similar supply chains with your peers.
ii. On your first visits to both DC’s you find that there are vast amounts of Inventory not only in the warehouse, but also in numerous parked trucks and marine containers stored on site, and there are a number of additional warehouses being rented and staffed at great expense to store all the inventory.
iii. You also find that there are more than 10,000 SKU’s to manage, when all sizes, widths, colours and other customizable options are taken into account.
iv. On your first visits to their US Manufacturing plants you find they are running flat out all the time to satisfy the target of next day supply to retail, and you also find out that the NB2E initiative is succeeding in meeting that target nearly all of the time, though at the cost of high staffing costs in production such as overtime and hiring of additional employees… In fact Manufacturing is asking you to support their requests hiring more staff and building more US factories to meet the requirement for next day shipping.
v. Despite NB’s excellent reputation with its customers, it is now losing money, and its owners have asked you to give them the outline of a plan bring it back into profitability by better supply chain management.