Many manufacturing firms long ago outsourced their transportation activities in the belief that outside experts could do the job more efficiently.

Switching to a third-party transportation service typically leads to savings of at least 10%.

However, Ashley Furniture Industries Inc., one of the largest furniture manufacturer and retailers, has resisted that trend. The firm known for its home furnishings and accessories sells a variety of products through independent furniture dealers as well as more than 700 Ashley Furniture retail stores operated by licensees across the Americas. Ashley operates several manufacturing and distribution facilities in the United States, China, and Vietnam.

Nearly a quarter of the firm’s employees work in its transport and warehousing function which also operates about 800 trucks that deliver most of Ashley’s products from distribution centres to furniture dealers and retail stores. Besides owning and operating a fleet of delivery trucks, the firm has also invested in its distribution centres that are equipped with racks specially designed for handling bulky items and speed loading.

In the past years, these investments seemed to pay off as many retailers consider Ashley unbeatable in terms of delivery time and reliability.

1) Drawing on the competitive product space, analyse Ashley’s strategic positioning in comparison to other furniture manufacturing and retail firms such as IKEA. 

2) .Discuss how the decision to keep transportation in-house enables the alignment of Ashley’s operations capabilities with its overall strategy. 

3) . What are the implications for Ashley’s internal performance measures and the way it must manage its processes and resources?