How a Global Trade Strategy developed across MICROSOFT Supply Chain

Challenges of the Project

MICROSOFT European Logistics Operations - located in Dublin, Ireland - manages demand fulfilment for the EMEA region (Europe, Middle East and Africa). In this assignment the full logistics cycle in recovering old mobile phones and components from the main European markets and supplying new ones to distribution centres in the Netherlands via major 3PLs in Europe (DHL, TNT, Schenker and others) was a main objective. Technology & data was a key part of the overall coordination system given the extensive physical network being operated by Microsoft via large third party logistics providers.

The wide variety of third party logistics providers entailed a very challenging coordination efforts among many different countries with different levels of complexity. This was escalated by the fact that ‘Hanjin Shipping’ - a Korean shipping line with a significant market share in the trade of containerized cargo - was under administration due to escalating financial losses.The sheer diversity of the company SKU’s was driven by the fact that the company - MICROSOFT - was sourcing from may different providers and suppliers and this entailed an even larger range of key activities to be coordinated.

Solutions

- Analysis of Global Logistics Costs - Data
- Training Logistics performance
- Implementation of best practice

Larger Global Trade Challenges

- Hanjin Shipping: it was South Korea's largest container line and one of the world's top ten container carriers in terms of capacity. As the project with Microsoft was during Hanjin financial troubles, the supply chain was impacted because seaports worldwide and their service operators were concerned of the financial solvency of Hanjin and consequently of the capacity to pay its debts. A black swan is an unlikely event as described by Nassim Nicholas Taleb as "A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we arrive at an explanation that makes it appear less random, and more predictable, than it actually was". The bankruptcy of Hanjin caused worldwide and supply chain shipping disruptions as cargo ships were stuck at ports waiting for payments in cash. This created a massive ripple effect and leads us to the conclusion that supply chains are a network and any missing 'piece' in the organization of that very same network might create very big impacts indeed. What is a lesson learned, here? choose diversifications of carriers and look at a balancing perspective of shipping costs and logistics performance. How sustainable is your supply chain? Are you user-cutting competitors with risky moves?

- Visibility of cargo across the world
- Responsiveness to customer demands
- Documentation and product planning
- Transit time at key locations

The project achieved considerable efficiencies by streamlining the operations at different distribution centres (DC) and regularly monitoring for products flow via major DC in Europe.

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Project data

Over 10 Distribution centres
Over a million phones distributed across Europe in the first year of operation
Over 50 transport providers involved 
Team of 50 people across countries and functions
Data and logistics in one system

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