A written report(can be submitted 3 days after the presentation) approximately 2000 words that:
use other source and references to research the case
Identifies issues in the case (framing);
Analyze and summarize the issues;
Implications – how it affects/will affect the organization
Recommendation/solution (if any);
Conclusions
Teaching Note - Colberts Inc. Page 1 8B18D011 W18312 COLBERTS INC. (B) At this point, students should either be shown the video (http://go.ivey.ca/colbertsincB) or given a copy to read of Colberts Inc. (B) (see Appendix TN-1). 1. Based on news of the major incident, what additional information is needed to address the issue and how can it be obtained? http://go.ivey.ca/colbertsincB Page 2 8B18D011 COLBERTS INC. (C) At this point, students should either be shown the video (go.ivey.ca/colbertsincC) or given a copy to read of Colberts Inc. (C) (see Appendix TN-2). 2. After meeting with the operations team, what additional information do we know now, and what is the next step? https://www.youtube.com/watch?v=P0_KYFz9EKw&%3Bfeature=youtu.be Page 3 8B18D011 COLBERTS INC. (D) At this point, students should either be shown the video (go.ivey.ca/colbertsincD) or given a copy to read of Colberts Inc. (D) (see Appendix TN-3). 3. What have we learned from our suppliers? COLBERTS INC. (E) At this point, students should either be shown the video (go.ivey.ca/colbertsincE) or given a copy to read of Colberts Inc. (E) (see Appendix TN-4). 4. Now that we better understand the size and scope of the issue, what should be done about the system failure? https://www.youtube.com/watch?v=Frs0JK6P1Gk&%3Bfeature=youtu.be https://www.youtube.com/watch?v=mSA53ci3Glw&%3Bfeature=youtu.be Page 4 8B18D011 Page 9 8B18D011 EXHIBIT TN-1: BOARD PLAN Agenda: – ERP and IPFR System Design – Colberts Inc. Performance – Jessica Myers’s Role & Performance 2016 2015 Change Comments R ail Res ts of Operations Sales 13,707 13,431 2.1% Industry has averaged 1% in last five years O erating I ome 574 432 33.1% Improvement in margins and operating costs Adjustedgrossprofit 3,703 3,548 4.4% Good growth in a mature market Adjus gross profit% 27.0% 26.4% 0.6% Industry average is 22.3% Retail Operating Statis cs Same-store sales owth 1.5% 3.5% -2.0% Industry has averaged 1% in last five years Gross Profit/ Square Foo 130 125 3.9% Good growth in a mature market Adjusted Earnings Adjustednet earnings 500 429 16.4% Good growth in a mature market Adjustedreturn onequity 12.9% 1.1% 16.2% Industry average is 11.3% (2015) and 9.2% (2016) Adjustedreturn on sales 3.6% 3.2% 14.0% Well above industry average of 1.3-1.4% Consolidated Cash Flows Cashflowsfromoperatingactivities 1,063 14.3% Good growth in a mature market Assets Inventory Turns (Sales) 10.38 10.29 0.9% Well below industry average of 19-22 times Inventory DOH 48 48 -0 1% Down only slightly or no change Inventory write-off(in COGS) 7 26 - 4.1% Significant improvement ERP & IPFR Performance: – Sales + 2.1% – Operating Income + 33.1% – Cash Flow + 14.3% – Inventory N/C Supply Chain Issue (B): – How much inventory is at the store/warehouse and with the supplier? – Did the warehouse/supplier receive any orders? – How much time do we have? IPFR (inventory, sales data, forecasting, purchase orders) Purchase Order Shipment Order Sales Data Suppliers Distribution Retail Store Customer Product Centre Product Product Inventory Inventory Inventory Note: ERP = enterprise resource planning; IPFR = inventory production, forecasting, and replenishment; N/C = no change; DOH = days on hand; COGS = cost of goods sold Source: Created by case authors. T h is T e a c h in g N o te is a u th o riz e d fo r u s e o n ly b y M U K E S H S R IV A S T A V A , U n iv e rs ity o f M a ry W a s h in g to n u n til A u g 2 0 1 8 . C o p y in g o r p o s tin g is a n in frin g e m e n t o f c o p y rig h t. P e rm is s io n s @ h b s p .h a rv a rd .e d u o r 6 1 7 .7 8 3 .7 8 6 0 . mailto:[email protected] Page 10 8B18D011 EXHIBIT TN-2: FINANCIAL ANALYSIS As at the years ended December 31, 2016 and January 2, 2016 (in US$ millions except where indicated otherwise) 2016 2015 Change Comments Retail Results of Operations Sales 13,707 13,431 2.1% Industry has averaged 1% in last five years Operating income 574 432 33.1% Improvement in margins and operating costs Adjusted gross profit 3,703 3,548 4.4% Good growth in a mature market Adjusted gross profit % 27.0% 26.4% 0.6% Industry average is 22.3% Adjusted EBITDA 1,097 1,012 8.3% Adjusted EBITDA margin 8.0% 7.5% 0.5% Retail Operating Statistics Same-store sales growth 1.5% 3.5% −2.0% Industry has averaged 1% in last five years Sales/square foot 481.5 473.8 1.6% Gross profit/square foot 130 125 3.9% Good growth in a mature market Adjusted Earnings Adjusted net earnings 500 429 16.4% Good growth in a mature market Adjusted return on equity 12.9% 11.1% 16.2% Industry average is 11.3% (2015) and 9.2% (2016) Adjusted return on sales Consolidated Cash Flows Cash flows from operating activities 3.6% 1,063 3.2% 930 14.0% 14.3% Well above industry average of 1.3–1.4% Good growth in a mature market Consolidated Per Common Share ($) Diluted net earnings Assets 1.77 1.06 66.9% Inventory turns (sales) 10.38 10.29 0.9% Well below industry average of 19–22 times Inventory DOH 48 48 −0.1% Down only slightly or no change Inventory write-off (in COGS) 7 26 −74.1% Significant improvement Sales/fixed assets 4.3 4.2 1.3% Note: EBITDA = earnings before interest, taxes, depreciation, and amortization; DOH = days on hand; COGS = cost of goods sold Source: Case Exhibits 1 and 2. T h is T e a c h in g N o te is a u th o riz e d fo r u s e o n ly b y M U K E S H S R IV A S T A V A , U n iv e rs ity o f M a ry W a s h in g to n u n til A u g 2 0 1 8 . C o p y in g o r p o s tin g is a n in frin g e m e n t o f c o p y rig h t. P e rm is s io n s @ h b s p .h a rv a rd .e d u o r 6 1 7 .7 8 3 .7 8 6 0 . mailto:[email protected] This Teaching Note is authorized for use only by MUKESH SRIVASTAVA, University of Mary Washington until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860. Distribution Centre Suppliers Page 11 8B18D011 EXHIBIT TN-3: COLBERTS SUPPLY CHAIN IPFR (inventory, sales data, forecasting, purchase orders) Purchase Order Shipment Order Sales Data Retail Store Product Product Product Inventory Inventory Inventory Source: Created by the case authors using company data. Customer mailto:[email protected] This Teaching Note is authorized for use only by MUKESH SRIVASTAVA, University of Mary Washington until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860. Appendix TN-1 COLBERTS INC. (B) Ishan Sharma and Saad Khan wrote this case under the supervision of David Wood solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, con act Ivey P blishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www iveycases.com. Copyright © 2018, Ivey Business School Foundation Version: 2018-05-29 Just as her morning was getting started, Jessica Myers received a call from the Operations Control lead for supply chain management: Jessica, I am sorry to bother you, but we just received a major incident notification from the automatic replenishment system. It would appear that the system did not generate any orders last night for the warehouses. If this proves to be correct, we will not have any product being shipped to the stores this morning. I don’t know what caused the problem, but there is a chance that some stores could be out of stock by the end of the day. My team has already started looking into the issue in the system, but I wanted t be sure you were aware of the error right away. mailto:[email protected] mailto:[email protected] http://www.iveycases.com/ This Teaching Note is authorized for use only by MUKESH SRIVASTAVA, University of Mary Washington until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783