Ch. 9 Case Study. Achieving Operational Excellence and Customer Intimacy

Limited Brands Consolidates Its Supply Chain Management

2) Limited Brands had many supply chain management problems. They all had great business impact. Problems with the supply chain led to a catastrophe. A combination of circumstances created a traffic jam of 400 merchandise trailers at the parking lot of a distribution center that was designed to hold only 150 trailers. The logistics disaster clogged up a main highway and was a public relations nightmare. The environment was one in which planning systems crashed, corporate executives made assumptions, and different segments of the enterprise were not maintaining proper communication with each other. No one had knowledge of the origin of inventory or where it was going. The logjam was a symptom of a larger problem.
Limited Brand’s information technology infrastructure included a mishmash of systems and software from the various retailers that Limited Brands had bought. Sixty major systems were in place with hundreds of applications running on a variety of platforms, including IBM, Hewlett-Packard, Sun Microsystems, and Tandem. Redundancies were common. It was very hard to make supply chain information flow between the applications and coordinate their supply chain.
The impact of these supply chain problems was that discount retailers were pushing Limited stores out of their market space.

Limited Logistics Services ran into resistance from brand executives when it first tried to integrate the supply chain logistics operations of all the Limited companies.

3) Limited Brands faced technical and business process obstacles. Limited Brands was struggling with scheduling issues and processing delays. These problems were due to overly simple point-to-point interfaces that linked one system to another. The infrastructure did not have flexibility because its software applications were hard-wired point-by-point to different application programming interfaces. Changing one API resulted in a chain reaction that caused changes to all the APIs in communication with the connected applications.
Limited Brands needed a reusable framework to enable the replication of software solutions and an enterprise resource planning deployment.
Supply chain management was far away from the boardroom.

4) Limited Brands solved the problems by establishing better control over the supply chain. Limited Brands incorporated “integrated brand delivery.” It obtained improved supply chain technologies that integrate and leverage the supply chain technologies that integrate and leverage the supply chain and logistics. Limited Brands upgraded its software and eliminated the legacy systems. This increased sales, gave better flexibility to respond to market trend and customer needs, freed up employees to concentrate on sales rather than on tasks related to supply chain and logistics. Legacy developed an enterprise-view of the supply chain.
Rick Jackson won the brand executives over by showing them how supply chain transformation would produce significant savings and strategic benefits. Jackson also developed a customer service agreement and metrics for evaluating results. Jackson and his team built regional docking centers on the East and West Coasts to funnel products directly to stores, reducing costs and time to get products to market by as much as 10 days. This helped brand managers make much quicker decisions about which products to reorder.

Tibco worked with Limited Brands to install real-time reporting and communications with delivery agents. They also integrated the outbound supply chain accountability and reporting application with the logistics applications. Tibco’s installation introduced real-time communications between Limited Brands and its suppliers, and provided a secure environment for transmitting documents. It also enhanced the shipment tracking and order visibility capabilities of Limited Brand’s partmers using a booking information module.
Tibco enabled Limited Brands to support future business initiatives and reduce development time and the cost of solutions. Limited Brands was able to unite all of its brands’ technology operations under a central entity.

In 2005, Limited Brands adopted Web-based demand and supply chain management tools from Manugistics to improve collaboration for both the inbound and outbound chains.

Matthews became more involved with supply chain management. The company was able to focus on improving revenue rather than simply keeping costs down when the boardroom was more involved.