Case Study: Limited Brands Consolidates Its Supply Chain Management

Question #1: Describe the supply chain management problems encountered by Limited Brands in this case. What wast their business impact?

One of the significant problems to the supply chain management occurred when a traffic jam of 400 merchandise trailers moved into a parking lot distribution center that was only designated to hold 150 trailers. This logistics problem caused a major bottleneck along a main highway. The problem also amplified when it created a public relations issue during the beginning of a sales period. The problem occurred because of poor planning systems, corporate executives made assumptions, and different segments of the enterprise were not communicating with each other. There was no accountability or tracking of the original inventory. The impact on business is the loss of sales revenue to the company. Another problem identified was that sixty major systems were already in place with hundreds of applications running a variety of platforms such as computers and servers from IBM, Hewlett-Packard, Sun Mircrosystems and Tandem. As a result it was difficult to make supply chain information flow between applications to coordinate with the supply chain of Limited Brands. The business impact was the lack of an enterprise-wide view of the supply chain.

Question #2: What management, organization, and technology factors were responsible for these problems?

Management factors include a lack of visibility of inventory, lack of adequate tracking of inventory, lack of adequate communications, and a lack of an enterprise view of the supply chain. Organizational factors were a lack of infrastructure flexibility such as scheduling issues and processing delays resulting from overly simple point-to-point interfaces that linked one system to another. For example, a shipping facility needs to be linked to a distribution center. The software interfaces were hard-wired point-by-point to different application programming interfaces (APIs). Information data was transmitted between one system and another on a batch schedule, thus lacking infrastructure flexibility. Technological factors included were a lack of real-time reporting and communications with delivery agents. Another technological factor was a broken segment of its brand’s technology operations under a central tracking system.

Question #3: How did Limited Brands solve these problems? What management, organization, and technology issues were addressed by the solution?

Rick Jackson, Executive Vice President of Limited Logistics Services (LLS), which supplies global logistics management and leadership for the supply chains used by Limited Brand’s, launched several cross-functional projects to enhance their credibility. They built regional docking centers on the East Coast and the West Coast to distribute products directly to stores, thus reducing costs and time by as much as 10 days. Tibco, the leading vendor of enterprise application integration software was contracted to develop a global application platform for Limited Brands. The outcome is that the newly developed technology helped to improve the company’s ability to track and manage the flow of information through its worldwide supply chain. Another solution was that Tibco worked in coordination with Limited Brands to install real-time reporting and communications with delivery agents. They integrated the supply chain accountability and reporting (OSCAR) application with the logistics applications. This allowed new delivery agents to enter the supply chain, thus allowing for better flexibility of the network. This technology allowed for enhanced shipment tracking and order visibility of Limited Brand’s partners using a booking information module.

The management, organizational, and technology issues were resolved through these solutions. The impact to the supply chain was that it was better aligned with the goals of the board members and with the share holders. The outcome was that the supply chain became more focused on the needs of the customers, thus improving overall profitability.