Assessment 1- Part A- Case Study-1- Managing Growth at Y & Co.
In December 2008, Mr. Thomson and his management team were busy in evaluating the performance at Y & co. over the previous year. Demand had grown by 80 percent. This growth, however, was a mixed blessing. The venture capitalists supporting the company were very pleased with the growth in sales and the resulting increase in revenue. Thomson and his team, however, could clearly see that costs would grow faster than revenues if demand continued to grow and the supply chain network was not redesigned. They decided to analyse the performance of the current network to see how it could be redesigned to best cope with the rapid growth anticipated over the next three years.
Y & Co.
Thomson founded Y &Co. in 2004 with a mission of supplying parents with more affordable sports equipment for their children. Parents complained about having to discard expensive skates, skis, jackets, and shoes because children outgrew them rapidly. Thomson’s initial plan was for the company to purchase used equipment and
Jackets from families and any surplus equipment from manufacturers and retailers and sell these over the Internet. The idea was well received in the marketplace, demand grew rapidly, and by the end of 2004, the company had sales of $0.8 million. By this time, a variety of new and used products were being sold, and the company received significant venture capital support.
In June 2004, Thomson leased part of a warehouse in the outskirts of St. Louis to manage a large amount of product being sold. Suppliers sent their product to the warehouse. Customer orders were packed and shipped by UPS from there. As demand grew, Y & Co. leased more space within the warehouse. By 2007, Y & Co. leased the entire warehouse and orders were being shipped to customers all over the United states. Management divided the United States into six customer zones for planning purposes. The demand from each customer zone in 2007 was as shown in Table 1. Thomson estimated that the next three years would see a growth rate of about 80 percent per year, after which demand would level off.
In December 2008, Mr. Thomson and his management team were busy in evaluating the performance at Y & co. over the previous year. Demand had grown by 80 percent. This growth, however, was a mixed blessing. The venture capitalists supporting the company were very pleased with the growth in sales and the resulting increase in revenue. Thomson and his team, however, could clearly see that costs would grow faster than revenues if demand continued to grow and the supply chain network was not redesigned. They decided to analyse the performance of the current network to see how it could be redesigned to best cope with the rapid growth anticipated over the next three years.
Y & Co.
Thomson founded Y &Co. in 2004 with a mission of supplying parents with more affordable sports equipment for their children. Parents complained about having to discard expensive skates, skis, jackets, and shoes because children outgrew them rapidly. Thomson’s initial plan was for the company to purchase used equipment and
Jackets from families and any surplus equipment from manufacturers and retailers and sell these over the Internet. The idea was well received in the marketplace, demand grew rapidly, and by the end of 2004, the company had sales of $0.8 million. By this time, a variety of new and used products were being sold, and the company received significant venture capital support.
In June 2004, Thomson leased part of a warehouse in the outskirts of St. Louis to manage a large amount of product being sold. Suppliers sent their product to the warehouse. Customer orders were packed and shipped by UPS from there. As demand grew, Y & Co. leased more space within the warehouse. By 2007, Y & Co. leased the entire warehouse and orders were being shipped to customers all over the United states. Management divided the United States into six customer zones for planning purposes. The demand from each customer zone in 2007 was as shown in Table 1. Thomson estimated that the next three years would see a growth rate of about 80 percent per year, after which demand would level off.
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supply-chain-….docxMay 01 2020 02:50 AM
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