What Pandemic? Agile Systems Help Sephora Gain Market Share

What Pandemic? Agile Systems Help Sephora Gain Market Share

 

Sephora’s early investments in flexibility have paid off.

Sephora, like most retailers, had to close its stores during the pandemic. Whereas many others struggled to build or shore up an online presence, Sephora shifted gears with little effort. It relied on its inventory system linking brick-and-mortar retail and e-fulfillment facilities as well as on a distribution network with rapid access to most zip codes. Not only did the company meet customers’ expectations, but it also increased market share.

 


Video Spotlight: Sephora Promotes its Safety Guidelines as Stores Reopen


This post is based on the Supply Chain Dive article, How Sephora Flexed its Warehouse Network to Prep for an E-Commerce Onslaught, by E. Cosgrove, August 25, 2020, and the YouTube video, Sephora to Take a Measured and Supportive Approach to Reopening Select Retail Locations in the US, by BusinessWire, May 26, 2020. Image source: Africa Studio / Shutterstock.

Discussion Questions:

1. Explain how Sephora’s network design enabled the company to meet demand during the pandemic.

Guidance: Sephora had already built flexibility in its distribution network. Its five warehouses are located in four states (Maryland, Mississippi, Nevada, and Utah) to ensure coverage of and delivery Continue reading

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Inventory Throughput is Key for E-Commerce Warehouses

Inventory Throughput is Key for E-Commerce Warehouses

August 1, 2020

The rise in e-commerce has been accelerated by the COVID-19 pandemic.

E-commerce requires three times the warehouse space over brick-and-mortar retail operations.  A real key to managing a warehouse efficiently is inventory throughput.  Wayfair, for example, focuses on throughput and uses a chase demand strategy to staff warehouse operations to obtain efficiency.


Video Spotlight:


This post is based on the Supply Chain Dive article, Prologis: Demand for warehouse space will rise alongside e-commerce growth, by Matt Leonard, June 18, 2020, and  the YouTube videos in the Spotlight. Image source: vitpho/123RF

Discussion Questions:

1.  Wayfair uses a chase demand strategy to staff the warehouse operations.  What other aggregate planning strategies could Wayfair employ?  Is the chase demand strategy the better option?  Why or why not?

Guidance: Students should consider all the aggregate planning strategies in the textbook.  Lead the discussion by Continue reading

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Effect of Chinese New Year on Inventory Management

Effect of Chinese New Year on Inventory Management

January 27, 2020

The Chinese New Year brings manufacturing slowdowns in China. United States companies must plan on being proactive in managing supply by making early purchases and scheduling transportation before the slowdowns begin.

Building buffer inventory in the United States as a result of early purchases means storage capacity in the United States must be managed proactively as well.


Video Spotlight:


This post is based on the Supply Chain Dive article, Why procurement planning is critical ahead of Chinese New Year, by Amanda Loudin, January 16, 2020, and the YouTube videos in the Video Spotlight. Image source: Shutterstock / Dmitry Kalinovsky.

Discussion Questions:

1. Note in the article that the average shipping time from China to the United States is about 30 days.  How does this lead time impact inventory levels at United States facilities?

Guidance: This question is designed to get students to reflect on the interaction between lead time and inventory levels.   Ask students to suggest better ways to accumulate the additional Continue reading

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