Strategic Alliances: Strategic Alliances Presented by (In order of presentation): Piyali Kundu, Aveek Moitra, Anirban maitra, Rahul Saha, Rupak Guha & Shouvick Pramanick Introduction: Introduction Four Basic Ways to Ensure Tasks Are Completed: Four Basic Ways to Ensure Tasks Are Completed Internal activities Activities that are core strengths may be the best way to perform the activity. Acquisitions Gives the acquiring firm full control over the way the particular business function is performed Can be difficult and expensive. (Culture/Competitors) Arm’s-length transactions Most business transactions are of this type. Short-term arrangement that fulfills a particular business need but doesn’t lead to long-term strategic advantages. Strategic alliances Multifaceted, goal-oriented, long-term partnerships between two companies Both risks and rewards are shared. Typically lead to long-term strategic benefits for both partners. Framework for Strategic Alliances: When to Go for a Strategic Alliance?: Framework for Strategic Alliances: When to Go for a Strategic Alliance? Downsides: Downsides Three Types of Strategic Alliances: Three Types of Strategic Alliances Third Party Logistics (3PL): Third Party Logistics (3PL) What Is 3PL?: What Is 3PL? 3PL Advantages: 3PL Advantages 3PL Advantages: 3PL Advantages 3PL Advantages: 3PL Advantages 3PL Disadvantages: 3PL Disadvantages 3PL Issues Costs and Customer Orientation: 3PL Issues Costs and Customer Orientation 3PL Issues Specialization of the 3PL: 3PL Issues Specialization of the 3PL 3PL Issues Asset-Owning v/s Non-Asset-Owning 3PL: 3PL Issues Asset-Owning v/s Non-Asset-Owning 3PL 3PL Implementation Issues: 3PL Implementation Issues 3PL Implementation Issues: 3PL Implementation Issues Other Issues: Other Issues Retailer-Supplier Partnership: Retailer-Supplier Partnership Types of RSP Quick Response Strategy: Types of RSP Quick Response Strategy Types of RSP Continuous Replenishment Strategy: Types of RSP Continuous Replenishment Strategy Types of RSP Vendor Managed Inventory (VMI) System: Also called vendor-managed replenishment (VMR) system Supplier decides on the appropriate inventory levels and the appropriate inventory policies to maintain these levels. Supplier suggestions initially approved by retailer Goal of many VMI programs is to eliminate retailer oversight on specific orders. Types of RSP Vendor Managed Inventory (VMI) System Main Characteristics of RSP: Main Characteristics of RSP Criteria → Type ↓ Decision maker Inventory Ownership New skills employed by vendors Quick response Retailer Retailer Forecasting skills Continuous replenishment Contractually agreed-to levels Either party Forecasting and inventory control Advanced continuous replenishment Contractually agreed-to and continuously improved levels Either party Forecasting and inventory control VMI Vendor Either party Retail management RSP Requirements: RSP Requirements RSP Implementation: RSP Implementation Steps in RSP Implementation: Steps in RSP Implementation Advantages of RSP: Advantages of RSP Disadvantages of RSP: Disadvantages of RSP Examples of RSP Successes and Failures: Examples of RSP Successes and Failures VF Corporation’s Market Response System : The VF Corporation, which has many well known brand names (including Wrangler, Lee, Girbaud, and many others), began its VMI program in 1989. Currently, about 40 percent of its production is handled using some type of automatic replenishment scheme. This is particularly notable because the program encompasses 350 different retailers, 40,000 store locations, and more than 15 million replenishment levels. VF’s program is considered one of the most successful in the apparel industry. Examples of RSP Successes and Failures: Examples of RSP Successes and Failures Examples of RSP Successes and Failures: Examples of RSP Successes and Failures Distributor Integration (DI): Distributor Integration (DI) Changing View Regarding Distributors: Changing View Regarding Distributors Types of DI: Types of DI Addresses both inventory-related and service-related issues Inventory pooling across the entire distributor network Each distributor checks inventories of other distributors to locate a needed product or part. Dealers are contractually bound to exchange the part under certain conditions and for agreed-upon remuneration. lowers total inventory costs increases service levels. Can meet a customer’s specialized technical service requests Steer special requests to the distributors best suited to address them Centers of Excellence for Otra , a large Dutch holding company 70 electrical wholesale subsidiaries some designated as centers of excellence Other subsidiaries, as well as customers, are directed to these centers of excellence to meet particular requests Issues in DI: Issues in DI Distributors may be skeptical of the rewards of participating in such a system Participating distributors will be forced to rely upon other distributors, some of whom they may not know, to help them provide good customer service. Tends to take certain responsibilities and areas of expertise away from certain distributors, and concentrate them on a few distributors. It is not surprising that distributors might be nervous about losing these skills and abilities. DI relationship requires: a large commitment of resources and effort for the manufacturer a long-term alliance. trust among the participants. pledges and guarantees from the manufacturer to ensure distributor commitment. SUMMARY: SUMMARY Various types of partnerships can be used to manage the supply chain effectively. Framework that can help in selecting the most appropriate way to address a particular logistics issue. 3PLs are becoming more prevalent. Both advantages and disadvantages to outsourcing the logistics function Many important issues to consider once the decision has been made and a 3PL agreement is being implemented. RSPs are also becoming common. Issues and concerns relating to the implementation of RSP types of arrangements Distributor Integration (DI) Create risk-pooling opportunities across the various distributors Enable different distributors to develop different areas of expertise.