February 19, 2012
The results of this paper center on the supply chain and logistical functions of an elite pharmaceutical organization in the United States. Westminster Company retains three separate companies, which produce and distribute individualized or differentiated commodities independently. This paper will discuss the changes being considered within their supply chain structure, which are, the establishing of a solidified warehousing structure, possessing combined shipments to conserve on costs, the incorporation of information technology (IT) to keep up the companies’ inventory using software like enterprise resource planning (ERP), and contain an integrated management supply chain structure. This paper will discuss which methods inside their supply chain that must be centralized, also the methods that must be de-centralized so that the system is maintained efficiently. At the conclusion of this paper it will recommend a strategy for possessing a solidified or consolidated warehouse that will be the most efficient for the organization, the positioning or location of an easily accessible warehouse facility by all of the companies’ manufacturing plants (Bowersox, Closs, & Cooper, 2010).
The Westminster Company is considered to be one of the largest manufacturers of consumer health products in the United States. Westminster owns three subsidiary manufacturing companies which include mass merchandise, drugs, and grocery products. Due to intense competition Westminster has become concerned with the effectiveness of their current supply chain and logistic capabilities. Westminster evaluated both and the information obtained was useful for the requirements of their customers, and the functioning of their own companies. Due to the geographical positioning of their existing warehouses and manufacturing facilities, Westminster was now posed with a critical question, how to apply a beneficial strategy that will enable them to diminish costs associated with material handling and storage, transportation, and fixed costs. This paper addresses issues such as, possessing an amalgamated warehouse, and using an amalgamated or consolidated distribution center for the shipping of mixed consignments. This paper will also recommend and provide a viable plan of action. Without an adequate logistic system, the failure of marketing, manufacturing and other functions of the company would be inevitable (Bowersox, Closs, & Cooper, 2010). . It is important for products to be shipped from the manufacturing facilities to warehouses, then to retailers, and then to the customer or consumer. This paper will identify the effects of 3PL implementation by Westminster Company and the reason it is considered an advantageous strategy. Warehousing, transportation and information systems are key elements to any logistic system. Competitive advantages and the maximizing of profits are direct results of an effective collaborative supply chain logistic system (Bowersox, Closs, & Cooper, 2010). .Impact on transfer and freight cost from Westminster’s three new alternative are: One-information driven system like POS should replace the way Westminster currently handles inventory replenishment. POS will facilitate in the manufacturing of goods consistent with customer requirements. Forecasting by demand is not always correct, and POS will reduce the need to do so. When one reduces this need it will aid in inventory redundancy, the prevention of excess waste, and a reduction in storage cost. Ideally, Westminster should implement ERP; this will allow management of real-time inventory of Westminster’s various warehouses and plants, and their entire POS system. Customers’ inventory requirements and daily sales can be determined, and shipments can be proportionately prepared by implementing ERP. This software will allow trucks to be...