Sears Logistics Management Practices

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Case Details:

Case Code : OPER026
Case Length : 13 Pages
Period : 1993 - 2003
Organization : Sears, Roebuck & Company
Pub Date : 2004
Teaching Note :Not Available
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Revamping the Logistics Management System

Martinez had been highly influenced by Pagonis' account of practical applications of military logistic strategies during the Gulf War, in his book - Moving Mountains: Lessons in Leadership and Logistics from the Gulf War. At Sears, Pagonis was made responsible for supervising the logistic systems that enabled Sears' stores deliver numerous types of products to 5,000 homes per day, with a total of 2,50,000 truckloads of goods per annum.

Pagonis was also in charge of vendor relations, transportation, storage, distribution, international logistics, home delivery services and synergization of IT systems.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

With Sears owning 30 large distribution centers and 90 smaller storage outlets, Pagonis had to ensure uninterrupted supply of over 1,00,000 different products to more than 2,000 department, home and automotive stores in the merchandise division (Refer Exhibit II). Before Pagonis joined Sears, the company's logistic function was highly decentralized; for this reason it was very difficult to locate the origin of a logistical problem. With the assistance of Martinez, Pagonis centralized Sears Logistics Group (SLG), so that it acted as a focal point for all the company's logistics-related problems...

Using IT Tools and Internet to Manage Logistics

By the end of 1995, Sears had implemented an electronic ordering system, which connected the company's ordering system with every individual supplier's ordering system. Sears also introduced a Strategic Performance Reporting System (SPRS).

Reporting System (SPRS). SPRS was a part of five-year Strategic Information Systems Plan (SISP) launched by Sears in 1994 to modernize its operational systems. SPRS traced product flow starting from the distribution centers to the stock keeping unit at various locations. Sears also developed a system that enabled suppliers to verify the status of an invoice at any given time. The company also gave access to SPRS to its suppliers, so that they could verify their product sales and practice just-in-time delivery. Pagonis worked with Jerry Miller (Miller), VP, technology, for SLG to minimize home delivery delays. The duo wanted to strengthen the logistics system to overcome the problem...

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