Case

The execution of an acquisition without a solid supply chain foundation and infrastructure support may result into lost sales and revenues which is evident from the fact that when West Marine acquired its East Coast competitor, E&B Marine and sales fell by almost 8% and peak-season out-of-stock levels rose more than 12% as compared to the previous year. It was a result of poor supply chain foundation and infrastructure of West Marine which was not strong enough to support an organisation which was almost double in size and thus, Supply Chain was badly hit.

Collaborative Planning, Forecasting and Replenishment (CPFR) are formal integration and capitalization of the intelligence of multiple trading partners in the planning and fulfilment of customer demand. It works on the development of a single, shared forecast that supported the joint plans of the trading partners in the supply chain and drove their mutual replenishment activities. Much of the value of CPFR results from the exchange of more timely, complete and realistic forecast data, which led to higher forecasting accuracy. It also links the best practices of sales and marketing divisions.

As a part of CPFR implementation, West Marine adopted conventional order management, with the retailer driving forecast, order planning and order generation. It implemented a successful, robust linkage between the point-of-sale and DC systems to maximize automation and mass-maintenance procedures which gave multi-echelon replenishment solutions. It implemented EDI using SPScommerce solution and asked suppliers to begin using EDI. After the implementation of CPFR, the stock rates at the stores came close to the goals of 96% in every store, forecast accuracy climbed up to 85% and on-time shipments were also improved.

In the acquisition of Boat U.S., I recommend West Marine to adopt the following strategy which will help them to achieve a better integration of the supply chains of two organizations-

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