FedEx case study
Problems faced by Fujitsu:
Fujitsu was encountering problems relating to inventory management and non-adherence to time schedules for delivering its notebook computers. Even though FPC had sufficient inventory, it took ten days to deliver a notebook to the customers in the US whereas its competitors were delivering it in lesser time. The two main problems faced was the lack of co=ordination between the two freight forwarders Nippon Express (which shipped the components from Japan) and CAF(which brought the components by air from US to Portland). The shipment from Japan even went to the wrong place. The Portland facility was not functioning at an optimum efficiency and was not strategically located.
Measures by FedEx:
* Shift of FPCs assembling and distribution operations from Portland to its Memphis hub.
* The ERP systems were electronically linked to the systems at the Memphis facility.
* A lot of issues relating to security and software were tackled.
* FedEx’s aircraft replaced Nippon Express to carry the components from the Asian vendors, which were later stored at the FedEx’s warehouse.
* The JIT principle was used where the assembling schedules were sent by FPC to FedEx’s Memphis unit.
* Performed the Integrated Repair and Return (IRR) operation. Through IRR, Memphis facility was linked to another location where a subcontractor assembled and tested notebooks.
* Operations such as loading software, testing, etc. were also undertaken.
* Order processing was done through the ERP systems.
The Improved Process Flow Chart
* Reduction in the time taken to assemble and deliver notebooks i.e. from 10 to 3 days.
* Reduction in the finished goods inventory level.
* Performance checks to monitor inventory accuracy, return rates and fill rates.
* Decrease in the total cost of thelogistics.
2. Cisco Systems
* Assembling and delivering its products to the customers.
* Growing number of warehouses
Original Cisco Process Flow Chart
Measures by FedEx:
* Developed unique service called “Merge-In-Transit”.
* Utilized infrastructural facilities.
This ensured quick delivery and improved availability of critical components. The excess inventory at the warehouses was eliminated. This saved the inventory and distribution costs. Later the merge-in-transit was developed into E-Merge.