The Solution
M &
S
realized that in the digital era survival depends on the use
of infor
m
ation technology in general and
electronic co
mm
erce
in
particular. Electronic co
mm
erce (EC, e-co
mm
erce) is a process of
buying, selling, transferring, or exchanging products, services,
and/or infor
m
ation via electronic networks and co
m
puters. M &
S
initiated several EC initiatives, including the following.
• Selling online.
L
ike
m
any other retailers, M &
S
sells

so
m
e of its
m
erchandise online.
S
hoppers can collect
their
m
erchandise in a “shopping basket,” pay online,
and receive the
m
erchandise the next day (in the
U
K).
O
nline shoppers are encouraged to provide a
U
PC code in
order to get the sa
m
e product the y see at a physical
store, frequently at a lower price.
• Security. A security syste
m
tracks trans action data in
real ti
m
e, looking for fraudulent events. If any fraudulent
events are discovered, the syste

m
alerts the in-store
security staff in the affected store by sending the
m
a
short text
m
essage via cell phone.
• Warehouse management. A
m
ainfra
m
e-based ware-
house
m
anage
m
ent syste
m
, known as the Multi-
U
ser
W
arehouse
S
yste
m
(M
U
W

S
), was installed first at
M &
S
’s Hardwick distribution center near Bir
m
ingha
m
,
U
nited Kingdo
m
.
U
s ing Microsoft.
N
et infrastructure,
store sal es are reported to a
data warehouse
(a reposi-
tory of corporate data), al
m
ost in real ti
m
e. The data
are then available for decision
m
aking on inventory
replenish
m

ent (when and how
m
uc h to ship to each
store). The data are al s o available to the co
m
pany’s
third-party logistics service providers, who run the
warehouse operation and deliveries.
• Merchandise receiving. The process of
m
atching orders
and invoices is auto
m
ated,
m
aking it faster and free of
errors. Infor
m
ation about arriving goods is passed auto-
m
aticall y to both the warehouse and the stores. This way
M
U
W
S
can do a real-ti
m
e check of arriving and available
stock. Also, the syste
m

enables M &
S
to pay suppliers
m
ore
quickly, which
m
akes the
m
happie r and
m
ore cooperative.
• Inventory control. The warehouse
m
anage
m
ent and the
m
erchandise receiving syste
m
, in addition to the real-ti
m
e
data reporting, i
m
prove custo
m
er relationships. Custo
m
ers

can find what they want because replenish
m
ent is acco
m
-
plished quickly (so
m
eti
m
es within one-half hour).
• Speeding up the supply of fashion garments.
U
s ing
special software,
m
erchandisers can access and change
allocation plans fro
m
any co
m
puting device (PC, laptop,
pocke t PC) anywhere and at any ti
m
e in response to
c hanging de
m
and patterns. This is especially i
m
portant
for fashion gar

m
ents, where
m
eeting ever-changing
de
m
and is critical for co
m
petitiveness.
• Collaborative commerce. M &
S
can now pass
m
ore accu-
rate forecast de
m
ands to its suppliers for fast delivery of
goods, often directly to the M &
S
r etail stores. The new
infor
m
ation syste
m
enables M &
S
to work with suppliers
to reroute
m
erchandise to differe nt depots and change

allocations to wher e they are needed.
The Results
M &
S
’s CE
O
, in a
m
essage to the shareholders (su
mm
er 2002),
indicated that a turnaround is underway. He sees M &
S
as a
leader and exa
m
ple setter in retailing, resulting in increased
profitability and growth.
Sources: Co
m
piled fro
m

m
arksandspencer.co
m
;
O
dy (2002); and
Hayward (2002).

ONLINE FILE W1.1
MARKS & SPENCER— A NEW WAY TO COMPETE
The Problem
Marks &
S
pencer (
m
arksandspencer.co
m
) is a
U
K-based, upscale, global retailer known for its high-quality, high-priced
m
erchandise.
O
perating in
m
ore than 30 countries, the co
m
pany faces stiff co
m
petition, especially since the beginning of the econo
m
ic slowdown that
started in 1999. Custo
m
er service beca
m
e a critical success factor for Marks &
S

pencer.
O
ther cr itical success factors included an appropri-
ate s tore inventory syste
m
and efficient supply chain activities. To attract shoppers, the co
m
pany had to reduce prices at its stores,
which drastically reduced profits.
S
everal other big retailers were wrestling with si
m
ilar proble
m
s, including K
m
art, which had to file for
bankruptcy.
W
ill Marks &
S
pencer (M &
S
), a world-class retailer, be able to survive?
Questions
1.
L
ist the business
m
odels used by M &

S
.
2.
L
ist the different EC transaction types used by M &
S
.
3.
L
ist so
m
e of the benefits M&
S
derives fro
m
EC.
4.
R
elate this case to supply chain
m
anage
m
ent i
m
prove
m
ents.
2 Part 1
ONLINE FILE W1.2
FE

D
EX
S
O
L
U
TI
O
N
S
FedEx provides a host of
W
eb-based logistics (s hipping, etc.)
solutions to business custo
m
ers.
L
isted here are the
m
ajor
services provided to these custo
m
ers.
FedEx Distribution Centers
This service uses a worldwide network of warehouses to pro-
vide ready-to-use w arehousing services to businesses. This
allows for instant expansion of distribution capabilities and
is especially helpful to s
m
all businesses. The networked dis-

tribution syste
m
is
m
anaged electronica lly, and all co
mm
uni-
cation with the shippers and re ceivers is done online.
FedEx Express Distribution Depots
This service is pri
m
arily li
m
ited to
U
.
S
. business es a nd pro-
vides a one-stop source of express distribution capabilities.
G
oods in these depots are available for delivery 24 hours a
day. This servic e is targeted at ti
m
e-critical businesses.
Again, all c o
mm
unication is done online.
FedEx Returns Management
FedEx
N

et
R
eturn is designed to strea
m
line the process of
return of unwanted products to retailers or
m
anufacturers.
FedEx business custo
m
ers can use the Internet-based syste
m
to schedule pickup of packages fro
m
consu
m
ers and to obtain
ti
m
e-definite delivery as well as online status tracking and
custo
m
ized reporting.
Other Value-Added Services
FedEx offers several
W
eb-based value-added services. For
exa
m
ple, products can be shipped fro

m
a FedEx-operated
warehouse instead of the business custo
m
er’ s warehouse. In
addition, FedEx can provide a “
m
erge-in-transit” service to
custo
m
ers, such as Micron Co
m
puters, that operate on rapid
turnaround and delivery.
U
nder the
m
erge-in-transit progra
m
,
FedEx stores peripherals such as
m
onitors and pr inters in its
Me
m
phis, Tennessee, air hub. FedEx then
m
atches those
products with the co
m

puters en route to a custo
m
er. If a
custo
m
er in Boston, Massachusetts, for exa
m
ple, orders a
popular PC
m
odel online, Micron sends the electronic order to
FedEx, which will transport the co
m
puter fro
m
Micron’s ware-
house to FedEx’s Boston station. FedEx electronically
m
atches the co
m
puter with a standard Micron
m
onitor and
pr inter shipped fro
m
a FedEx-
m
anaged warehouse in
Me
m

phis. The FedEx driver then delivers the co
m
puter,
m
oni-
tor, and printer together to the custo
m
er’ s ho
m
e.
Online Wireless Portal
FedEx custo
m
ers now have a wireless tool with which to
access FedEx service infor
m
ation.
S
ubscribers to
N
extel
O
nline, a wireless service fro
m

N
extel Co
mm
unications Inc.,
can now efficiently view the shipping status of their pack-

ages through a wireless
W
eb site dedicated to
m
obile
package-tracking and drop-off services.
Improved Custom Clearance Operations
Custo
m
ers doing business internationally benefit fro
m
i
m
proved convenience due to express clearance operations
currently conducted by the Fritz Co
m
panies.
Simplified Shipping for North American
Importers
FedEx Trade
N
etworks uses ocean or air transportation to pro-
vide custo
m
ized and cost-effective solutions that enable
ship
m
ents fro
m
Asia and Europe to go to

m
ultiple destina-
tions within
N
orth A
m
erica.
Enhanced Online Shipping Toolkit
Features now enable c usto
m
ers to quote, s chedule, track,
and
m
ap ship
m
ents as well as view corresponding ship-
m
ent docu
m
ents.
FedEx Ground Visibility
FedEx In
S
ight is the first
W
eb-based application in the
m
ar-
k et that offers visible current status infor
m

ation on inbound,
outbound, and third-par ty ship
m
ents. It enables the parties
in a shipping transaction to go online to find infor
m
ation
about FedEx
G
round ship
m
ents and helps keep logistics chan-
nels running at peak efficiency.
Help with Global Shipping
FedEx has the first carrier-provided, online duty and tax esti-
m
ator on its Internet-based FedEx
G
lobal Trade Manager
application. International shippers now have an easier and
m
ore affordable way to esti
m
ate the
m
ultitude of govern
m
en-
tal charges, duties, and other fees associated with
m

any of
their inbound and outbound overseas ship
m
ents.
FedEx Custom Critical Passport
Auto Transport
FedEx provides fully enclosed transport for valued vehicles
fro
m
classic, collectible and antique cars to hot rods, street
rods, and
m
uscle cars.
White Glove Services
FedEx co
m
bines the speed and urgency of an expedited shipping
carrier with the special services and extra attention to detail
associated with
m
oving van lines or specialty transporters.
Sources: Co
m
piled fro
m

R
ao et al. (1999); fro
m
FedEx press releases

(2001–2003); fro
m

Business
W
ire
articles; and
fede x.co
m
(accessed
February 2005).
Questions
1. How does a co
m
pany benefit fro
m
outsourcing logistics
(shipping, etc.) to FedEx?
2.
W
hat are the benefits of the EC services to shippe rs?
3. Visit
fedex.co
m
and identify
m
ore EC-related business
services.