BRUNEL UNIVERSITY? SCHOOL OF ENGINEERING AND DESIGN LOGISTICS AND GLOBAL SUPPLY CHAIN MANAGEMENT M&S Case study Assignment Mark&Spencer As it is well known, the retailer M&S had been a giant in the UK market, offering several products and services that have had a big participation in the daily life of the population that in some way had been influenced by any branch of this company in any place where they stay selling its goods, whether in the UK or on overseas places.
Marks & Spencer owns no factories and does not make the goods, which are sold in its stores, which represent a different approach to the retailer business and gives some advantages that M&S enjoy. The key element in furthering its competitive advantage has been the development of strong supplier relationships which although have had suffer several changes in the past few years because of strategies in the market and distinct factors, they maintain as an essential part of the business. Marks and Spencer’s mission statement is broken into 3 parts which include:
Vision – To be the standard against which others are measured Mission – To make aspirational quality accessible to all and Values – Quality value, service, innovation and trust. Representation on M&S general operations * Given that M&S had an image problem in the past, what change did it make and is making to its clothing business to enhance its competitiveness? The serious problems of image that M&S had in the pass were consequence of several decisions and assessments made by its board and especially very often by the chairman and the chief executive.
There is one factor that shaped for long time all the decisions made in the company; “the culture of Marks&Spencer”, this way of thinking was the method to use for manage the firm for many years from its beginning until the changes in the market and in the customers did not fit with that culture anymore. In lights of these events and in the increasing problems, severe changes has to be made, changes that were enough to return the plot to the company in their market that was falling as consequence of this.
The quality of the clothes was not the same and the customers get realised of that as they begun to claim about it. Moreover, the bad winter season in 1999 coinciding with the retail sales downturn put a starting point in the definitive necessity of changes in M&S. 1999 was a year to forget in the UK clothing sector. Can be said that the beginning of the first change made was the incorporation as chief executive of Peter Salsbury to succeed eventually to Sir Richard Greenbury.
The first approach to changes was a series of radical culling in the board of the company, which meant a change from the top-down in the structure of the organization and the incorporation of the technology in the communicational way among the board members which it have to be stress, they were not familiarised with new technologies, these initial changes made by Salsbury were aimed to vanish the old fashion way of manage the company and dismantling symbols of the old regime; many people were removed from the administration work to go to dealing with costumers’ needs.
A general reorganization that split the company into UK retail, overseas and financial services was made as well. As another remarkable change, was the approach to the renewed focus on the client itself and the fulfilment of its necessities, part of the image problems was because of the treatment to the customer from the staff of M&S, as part of the change process, a new department of marketing was created in order to enhance the advertisement and to gain customers over from the dynamical market they deal with, new thinking and new minds were ired, and the marketing department would take over many decisions of the buying departments to support in the decision of what the customers wanted. Within this period the board of the firm had realised that some of the overseas business and UK suppliers had become a millstone for M&S rather than a support, and were put up for sale and dismissed respectively.
The period of changes that M&S was going trough with the severe culling and reorganization processes, brought a new image problems to the company, as consequence the entire personnel was demoralized and downright, the spirit of the company to its staff and the trust of its suppliers was totally destroyed. Being clear that these methods and managing was not working anymore as a part of a past of revolution in the company, new changes have to come. Although, Peter Salsbury had accomplished the evolution and change of the culture of M&S.
After this Luc Vandevelde as a chairman contributed with several changes in the clothes line of M&S, as was the entry of George Davis to the firm to develop and deliver to the public a new brand called “Per Una”, in aims to revitalize the women’s clothing sales as a strategy from the board. New changes are being made in order to enhance the competitiveness in the clothing business, changing the look to the stores with lighter colours, new tills, better lighting.
M&S has turn itself in a company that owns a staff full of youth and freshness, consequently, the company has give back the quality to its goods, quality that was a flag in the “golden years of M&S”, with several new clothing brands fitted to both gender and to every stage in the life of people, this wide range of goods cleverly design on age and occasions are the product of selected designers and their teems pushing to deliver nothing but the very best to all the M&S’s customers, this fact is a sample of a great change that the company has made managing to recover the trust of the customers and the treatment of excellence to the clients that the current business and the market require.
As part of the new times and challenges, the board of the company nowadays effectively had set clear points in the taking-decision process as is to debate and agree the best strategy for the Company and hold the executive team accountable for its execution, this permit a very dynamic way to involve anyone to the final decision in order to guarantee a wise decision that push to the continue enhancement and development of the current business plan and finally, to set the tone of ‘doing the right thing’, supported by the right governance structures and their effective implementation. * Specifically and in detail, what changes were made to the M&S supply chain strategy in the light of these changes?
Evidently as the culture of M&S was created and leaded by several men with the same way of thinking, the most remarkable characteristics of this culture was the relationship with the suppliers of M&S, that was based on an close and unique relationship that have been prevailed by several decades in some cases. This supply chain based on trust from the firm to its suppliers gave shape to the UK retail market for many years. The board planned the new strategy implemented to the supply chain by the end of the year 2000; this strategy consisted on the change of suppliers from the UK to other overseas instead. Amid the changes on reorganization of M&S in general, the board had realised that the hearty link with the traditional suppliers in the UK was no longer affordable enough and represent a millstone for the company.
The first place to be pointed as an overseas supply branch was in Portugal owing to the mix positive factors of cheaper manufacturing costs and the short distance to the UK that would not affect the supplement of goods in the stores for time reasons as start happening with others overseas supplier that because they were so far from UK the time of delivery influenced in the schedules and logistics of M&S. Nevertheless, some UK suppliers that closed their factories repositioned themselves in North Africa, Indonesia, Thailand and China; Looking for cheap workhand and opening in this way an overseas market of suppliers for the company and at the same time a beneficial reduction of cost for M&S despite the exportation activities involve in this operations, demonstrating this way that the strategy implemented in lights of the changes has just paid off.
Another important change was specially related to the clothing range “Per Una” leaded by the designer George Davis which consist in the direct delivery of the clothe and accessories from nothing more but his organisation to M&S, as part of a agreement maid at the beginning of his business relationship whit the company, this represent a self-sufficient branch in the supply chain of the firm. Some other changes were made on M&S regarding to its branches in Europe, specifically to the supply chain that maintain the European branch of the company in countries as Spain, Holland, France and Germany. They have to concentrate the efforts in the UK market so they decided to finish the overseas branches, representing a culling on the supply chain to those countries and leaving the supply chain operations directly to UK. * What are the different supply chain performance objectives for the different product groups? Classic| Autograph| Per Una| Indigo| Blue Harbour| Product Range| Short – Mature Customers| Long – Wide Range Customers| Short – Fashion Woman 25-35 years old| Short – women with busy lives| Long – Men’s casual clothes for weekends| Design Changes| No frequent| Trend| Frequent| Seasonal| Seasonal| Price| Expensive – ‘value-for-money’ prices| Competitive ‘High Street Pricing’| Good Value| Average | Expensive – ‘value-for-money’ prices| Quality| High| Aspirational Quality| High| Aspirational Quality| High| Sales Volume| High| Low – Limited| Low – Limited| High – seasonal| High – seasonal| Order Winners| Smart, Elegant & quality clothes| Fashion ability| Exclusivity| Fashionable for everyday use| Casually smart clothes| Order Qualifiers| Quality and value on the clothes| Clothing wide range and high street prices| Affordable price| Everyday-workday casualwear| Smart casual menswear for weekends occasion| Operation Priorities| Reliability – aimed to mature costumers | Cost – Sharpen pricing – great value| Flexibility – Very fast response| Speed – high fluency on the selling of this clothes| Quality – unique menswear brand| References “The rise & fall of Marks & Spencer … And how it rose again” by Judi Bevan, edition revised and updated in 2007. Bookmarque, Croydon, Surrey. ISBN-10: 1 86197 898 7. * “Logistics and supply chain management” by Martin Christopher, Fourth Edition, FT Prentice Hall – Financial times. * “Operation Management” by Nigel Slack, Stuart Chambers and Robert Johnston, Sixth Edition, FT Prentice Hall – Financial times. * Marks & Spencer Annual Report and Financial Statements 2000 * Marks & Spencer Annual Report and Financial Statements 2006 * “Issues of Marks & Spencer” by OxbridgeWriters. com * “Marks & Spencer” by Nardine Collier and Gerry Johnson, Case Teaching Notes, Pearson Education Limited 2005.