Question 1. Related to the case (8 points)
1a Draw a figure of the old, current supply chain of DD-France as presented in the case. Draw the
goods flows, production units and stock points, using the normal symbols (4 points)
1b Draw a figure of the supply chain as it will be after the tender (4 points).
A
B
1
, Question 2. Related to the case (12 points)
2a What are the advantages of the new distribution strategy? Give and shortly elaborate three
advantages for the retailers and three advantages for DD France (6 points)
2b Shortly describe four risks or disadvantages of the new distribution strategy of DD France. (4
points)
2c Discuss what type of postponement – if any – is applied in the new distribution strategy (4
points)
A Advantages retailer:
1. less invenrory level
2. higher service level
3. less handing cost in the regional DCs
Advantages DD France:
1. Demand is more evenly divided, allowing for more precise forecasts, which in turn
will simplifies inventory control.
2. Outsourcing the logistic activities allows DD to focus on their core competences,
being producing and selling soft drinks.
3. DD reconciles their operations strategy to the market requirement, which makes them
more attractive to work with. Typically, major retailer have a very high market power
and additionally they are making up an increasing share of total sales.
B 1. Loss of control, since central warehouse/outbound logistics is outsourced. Employees
of 3PL have final contact with customers; confidential information in the hand of the
3PL.
2. DD has now both a central warehouse for big customers and 8 small warehouses for
smaller order. This might lead to higher total cost compared to the previous situation.
3. Problems related to ICT. For example, if DD invests into a new ERP system there
might occur a synchronization problem.
4. The focus of their strategy very much directed on the needs of the major retailer,
which may be risky since major retailer are known to use their market power push the
margins of their suppliers to a minimum.
2
1a Draw a figure of the old, current supply chain of DD-France as presented in the case. Draw the
goods flows, production units and stock points, using the normal symbols (4 points)
1b Draw a figure of the supply chain as it will be after the tender (4 points).
A
B
1
, Question 2. Related to the case (12 points)
2a What are the advantages of the new distribution strategy? Give and shortly elaborate three
advantages for the retailers and three advantages for DD France (6 points)
2b Shortly describe four risks or disadvantages of the new distribution strategy of DD France. (4
points)
2c Discuss what type of postponement – if any – is applied in the new distribution strategy (4
points)
A Advantages retailer:
1. less invenrory level
2. higher service level
3. less handing cost in the regional DCs
Advantages DD France:
1. Demand is more evenly divided, allowing for more precise forecasts, which in turn
will simplifies inventory control.
2. Outsourcing the logistic activities allows DD to focus on their core competences,
being producing and selling soft drinks.
3. DD reconciles their operations strategy to the market requirement, which makes them
more attractive to work with. Typically, major retailer have a very high market power
and additionally they are making up an increasing share of total sales.
B 1. Loss of control, since central warehouse/outbound logistics is outsourced. Employees
of 3PL have final contact with customers; confidential information in the hand of the
3PL.
2. DD has now both a central warehouse for big customers and 8 small warehouses for
smaller order. This might lead to higher total cost compared to the previous situation.
3. Problems related to ICT. For example, if DD invests into a new ERP system there
might occur a synchronization problem.
4. The focus of their strategy very much directed on the needs of the major retailer,
which may be risky since major retailer are known to use their market power push the
margins of their suppliers to a minimum.
2
