Brother International Case European Distribution Strategy

Seminar paper from the year 2003 in the subject Business economics - Supply, Production, Logistics, grade: 1,0 (A), Linköping University (Institute for technology), course: Supply Chain Management, language: English, abstract: The Brother International Case deals with a logistic problem. One newly hired professional logistician should reorganize the supply of spares and parts in Europe for a Japanese Firm. In all there are some 65000 different items from small ones like needles to big ones like motors for industrial sewing machines. The majority of the parts come from Japan either by air or by sea freight. There are 20 local sales offices (LSO:S) in 13 different European countries and one headquarter in Manchester, through which all the orders to Japan were delivered till now. The LSO:s act as independent profit centers. In the following text I will describe how the logistician could reorganize the distribution system, how the stock should be controlled, which information are needed to realize the reorganization and what problems could occur when trying to implement it. At the moment the LSO:s send their orders daily to the BIE headquarter (hereafter called BIE) which bundles the orders and send them to the factory in Japan. The factory will than send the goods directly to the LSO:s. The average lead time by sea freight is 50 days and 20 by air. The air transport was originally provided for emergency cases. Because of the bad organization or forecasts many emergency orders were duplicates of earlier routine orders which didn't arrived in time. The emergency orders are produced and send with highest priority leading to a bigger backlog of the normal orders. Therefore the share of air transports climbed up to some 70-90% . This is obviously a sub optimal solution through air transports are much more costly than sea freight. In addition the ordered sizes are smaller than they may need to be, because each LSO orders their products independently. Even the time advantage of air freight is not fully used since in average the orders need still 20 days! [...]