Cas study : the wine stores of Meknes

CASE STUDY: THE WINE STORES OF MEKNES

CONTENTS

STEP 1/ PROSPECTING DELHAIZE GROUP        1

1.        Profile of the WINE STORES OF MEKNES        1

2.        Can we dread an incident of supply operations?        1

3.        Appreciation of the financial risk:        1

4.        Working wish:        1

STEP 2/ NEGOTIATION OF THE SALE CONTRACT        2

5.        Judicial aspects        2

6.        Transport insurance        2

7.        Period        2

8.        Documents        2

9.        Customs        2

10.        Incoterms        2

11.        Payment        2

12.        Price        3

13.        Transport        3

STEP 3/ TRANSPORT SCHEME        4

14.        Palletization        4

a.        CP 9:        4

b.        EUROPALETTE:        4

15.        Transport plan        5

Alternative 1:        5

Alternative 2:        6

        6

Alternative 3:        6

Alternative 4:        7

16.        Rank        7

17.        Plan B        8

Methodology CNR:        8

STEP 1/ PROSPECTING DELHAIZE GROUP

1. Profile of the WINE STORES OF MEKNES

• Capitalization: à définir ensemble
• Debt: à définir ensemble
• Turnover (sales): 300 Million euros

1. Can we dread an incident of supply operations?

If the Wine Stores of Meknes has a lack of working capital, the company will have to reduce the inventory to release operating cash and lower operating cost by increasing their productivity.

Furthermore, there is some financial risk that can rise, such as, supplier bankruptcies. If this financial risk occurs, the company will need to re-evaluate their supply chains to identity their key partners and reduce the number of potential weak link suppliers.

For our supply chain operations, we would like to adopt the just in time method. The just in time method will help reduce the amount of inventory but in order to execute the just in time method it is important that each operation with the supply chain process is synchronized and the customer demand should be forecast accurately.

Define the payment methods with the supplier

1. Appreciation of the financial risk:

1. Fournisseur qui ne respecte pas les délais de paiement

If the supplier doesn’t respect the payment delay it can impact the the company financially

1. Ne pas recevoir les marchandises à temps (risque financier à expliquer)

Receiving the goods in timely manner

1. Fournisseur non solvable à un moment donné au cours du contrat

1. Hausse du prix des matières premières et répercution sur les prix du fournisseur

If the supplier increases the raw material it can have an impact on the distribution

1. Working wish:

1. Se mettre d’accord sur les délais de paiement (mais aussi sur paiement comptant ou différé)
2. inclure les risques financiers dans le contrat? c’est-à-dire penser à des clauses spéciales en cas de risques vis-à-vis du fournisseur

STEP 2/ NEGOTIATION OF THE SALE CONTRACT                                          

1. Judicial aspects

Problem: The problem here is the transfer of property and the and the guarantee.

Solution/ Alternative: The clause must be predicted in the contract (between the buyer and the seller). Then foresee a certificate of origin with the Chamber of Commerce and Industry of Morocco and the evaluation of the analysis.  

1. Transport insurance

Problem: “Transport insurance is mandatory for every movement of merchandise”. The problem is that “Wine Stores of Meknes will not arrange any insurance policy transport either with an insurance company, or with an insurance broker”.

Solution/ Alternative: As it is mandatory to insure the goods, Meknes doesn’t have the choice to choose a transporter with an insurance.  If DELHAIZE receive damaged goods, the transporter is responsible, the insurance will allow to avoid the risks. Also, Delhaize must check the insurance of Geodis.

1. Period

Problem: We don’t have any information about the start date and end date regarding the operation of loading and unloading.

Solution/ Alternative: Coordinate the information with GEODIS to agree about period. Also, it could be a great idea to provide a communication system.

1. Documents

Problem: We can’t track the merchandise.

Solution/ Alternative: Elaborate a packing list.  

1. Customs

Problem: DELHAIZE pay the custom, but then, who pay for the Morocco’s custom?

Solution/ Alternative: The problem must be seen when both parties elaborate the contract.

1. Incoterms

Problem: In the document, we don’t know which incoterm should be used during the contract. Therefore, we don’t know who take the responsibility and the risks.

But Delhaize Group will pay for taxes, customs and cost of transport.

Solution/ Alternative: Maybe we can use incoterm EXWORKS.

1. Payment

Problem 1:

“You broadcast it to the FORTIS Bank to eventually prepare a stand by letter of credit with beneficiary Wine Store of Meknes”. It is a problem because Meknes doesn’t know how they are going to be paid (bank cheque, bank transfer…)

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