Reference no: EM133827107

Question

Warner Bros. Entertainment Inc. is a fully integrated, broad-based entertainment company and a global leader in the creation, production, distribution, licensing, and marketing of all forms of entertainment and their related businesses. A Time Warner company, the studio is home to one of the most successful collections of brands in the world and stands at the forefront of every aspect of the entertainment industry. In the early 2000s, the five main divisions in Warner Bros were movies, television shows, animation, home video, and interactive entertainment (video games). Dividing such a large organization along product lines allowed each business sector to develop product, pricing, and promotion policies and supply chain strategies independent of one another. But to the distributors and retailers who were Warner Bros.'s direct customers, the view was quite different. Each customer had to deal with five separate billing and logistics processes, one for each business division. This caused a wide range of problems, as it did not allow customers to purchase all Warner Bros' products (DVDs and reels from different divisions) together for delivery on the same truck. Some customers went several days without receiving an order, only to have several trucks with Warner Bros orders arriving at the receiving dock at the same time on the same day. Different product categories were shipped on different trucks with different invoices. The separate pricing and promotion policies, coupled with non-coordinated management of logistics activities across the five business divisions, resulted in different prices per item and order quantities of less than full truckloads. After 2010, and having listened to customer complaints over the years, Warner Bros. launched its streamlined logistics initiative and simplified pricing and promotion structure. But more importantly, Warner Bros. redesigned the information and physical flows across the business divisions so that customers had to deal with only one Warner Bros. billing process and one set of logistics processes. Optical discs, hard drives, satellite links, or the internet are the new ways of sharing the products of Warner Bros.

Forecasting forms the basis of all supply chain planning. Managers need to plan the level of available capacity and inventory based on expected demand. This process should extend up the supply chain.

Analyze the laws of forecasting and how they apply to Warner Bros. and explore their implications for operations and supply chain managers of the companies in the case study.