Fedex Case Study
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Transcript of Fedex Case Study
FedEx case study 1. Fujitsu
Problems faced by Fujitsu: Fujitsu was encountering problems relating to inventory management and nonadherence 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: y Shift of FPCs assembling and distribution operations from Portland to its Memphis hub. y The ERP systems were electronically linked to the systems at the Memphis facility. y A lot of issues relating to security and software were tackled. y FedEx's aircraft replaced Nippon Express to carry the components from the Asian vendors, which were later stored at the FedExs warehouse. y The JIT principle was used where the assembling schedules were sent by FPC to FedExs Memphis unit.
y Performed the Integrated Repair and Return (IRR) operation. Through IRR, Memphis facility was linked to another location where a subcontractor assembled and tested notebooks. y Operations such as loading software, testing, etc. were also undertaken. y Order processing was done through the ERP systems.
The Improved Process Flow Chart
Orders were placed ERP IRR
Orders were downloaded and Requests were placed for the components
FedEx s Warehouse
Shipment of Components to Technicians assembled the components & the notebooks were shipped
Customers
FedEx s air and ground network
IRR & FPCs Facility
Results: y Reduction in the time taken to assemble and deliver notebooks i.e. from 10 to 3 days. y Reduction in the finished goods inventory level. y Performance checks to monitor inventory accuracy, return rates and fill rates. y Decrease in the total cost of the logistics.
2. Cisco Systems
Problems: y Assembling and delivering its products to the customers. y Growing number of warehouses
Original Cisco Process Flow Chart
Sourced Components
Stored at regional warehouses
Sent to assembly warehouses
Component assembled and stored in warehouses
Measures by FedEx:y Developed unique service called Merge-In-Transit. y Utilized infrastructural facilities.
Merge-in-Transit ProcessIdentification of assembly warehouse closest to the customers place Nearby suppliers to deliver the various components
Order for a router
Assembled by FedEx
Delivery to customer
Results: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.
ByShruti Shetty (09) Aditya Dhande (17) (MMS II, SEM 3..Finance)