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Top1. Introduction
In line with Fisher (2014), retailing is a major part of every economy in the world, and it contributes to almost 40 percent of the United States economy. Strategic supply chain can provide a company with the opportunity to beat competitors. Nowadays, the responsiveness of a company’s supply and satisfaction networks becoming a more significant determinant of company success.
A well-organized supply chain is indispensable for e-commerce businesses because it can decrease production costs and reduce response time to urgent customers. In the era of enterprise e-commerce, traditional brand retailers and manufacturers should spot the main challenges and opportunities of supply chain management (SCM) and explore the optimized operation model. As Heugel (2021) indicated, by managing the supply chain, retailers are better able to cut excess costs and deliver products to the consumer faster through tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors.
Sears once was a “Cheapest Supply House on Earth” and contributed about 1% of the U.S. GDP during the late 1970's. For decades, Sears was the retailer that every American had purchased from at least once in their lifetimes. As the largest provider of product repair services and home installation in the US, it was a well-known, reliable, and the most trusted brand among those in the market.
However, how did Sears fall like a meteor from the sky after shining more than 128 years? How did an American icon slowly but surely become stained? It is very important to track down and dig up its roots. Analyzing its collapse in order to allow businesses to look at the importance of constantly assessing how the market is everchanging, and finding new approaches and techniques to stay competitive and advanced.
It is evident that there were many factors, both internally and externally, that led to the eventual downfall of the company. Among them, fatal SCM mistakes have often been the main culprit. As a demonstration, we can check inventory turnover and the value of controlling operational metrics. Nicholson (2018) provided the financial snapshot below outlining the comparative financial health and inventory metrics of Walmart, Amazon and Sears, as of earnings reported in January 2017.
Table 1.
Inventory metrics of Walmart, Amazon and Sears
These figures portray an eye-catching picture of the operational strategy differences of these retailers and where their focus possibly lies. Walmart and Amazon both had inventory turn rates of 8.3x and 8.1x (vs. 3.8x from Sears) respectively while maintaining relatively high COGS with efficient inventory levels. Walmart and Amazon concentrate their operating models on turning inventory as swiftly as possible over a given cycle with dynamic pricing strategies and easily beat any competitors on price.
The remainder of this paper is organized as follow: Section 2 provides theoretical background and literature review. In Section 3, we introduce research methodology. Section 4 starts to describe the case. Sections 5 and 6 detail external and internal factors, respectively. Section 7 reveals current challenges. Finally, the paper concludes with a brief summary of the paper's main points in Section 8.