COMBINENET ASAP HELPS PRIMARK MANAGE ITS GLOBAL SUPPLY CHAIN

MOHAMMAD FATHI

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PrimarkFashion

Great Britain

40,000 employees

Ireland, Spain, Germany, Portugal, Netherlands, Belgium

keeps costs low: word-of-mouth strategy, bulk purchasing

second largest clothing retailer in the United Kingdom

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ProblemEconomic downturn: lower priced alternatives

Pressure on Primark to maintain ultra-low prices

Increase in the value added tax (VAT)

Rising labor costs in China

How to keep freight costs low when shipping

huge amounts of cargo from

multiple sites

Switching some of Primark’s

manufacturing to cheaper labor

markets

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Primark ships Free On Board (FOB)All costs including ocean freight, insurance, unloading, and transportation to its European distribution centers are Primark’s obligation.

Ocean carriers bid in units of cargo capacity called twenty-foot equivalents (TEU) based on the standard container size of 20 feet long by 8 feet wide.

With more origination ports now shipping to Primark’s already multiple destination ports, supply chain logistics increased in complexity.

Primark needed to optimize distribution of its TEUs and the shipping rates between each origination and destination port.

It also needed to determine which shipper provided the most cost-effective service over a specific time period, be it a week, month, or the entire year.

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CombineNet’s ASAPBy chance, Martin White, spoke to a manager at ABF who had been using (ASAP)

is a SaaS

Web-based

direct materials, indirect materials, and transportation services

process requests for information (RFIs), requests for proposals (RFPs)

Expressive Bidding: is beneficial to both parties

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Since implementing CombineNet ASAP

Reduce its total transportation costs: 2.5%

nearly $2.5 million

increased visibility into its supply chain

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CASESTUDY QUESTIONS1. Why is supply chain management so important at a company such as Primark?

2. What set of business conditions prompted Primark to look into upgrading its supply chain management system?

3. What problems was Primark having managing its suppliers and global supply chain?

4. How did the CombineNet ASAP software provide a solution to these problems?

5. How does the CombineNet ASAP software improve supply chain execution for Primark?

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