52634548 Westminster

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Executive Summary
This report focuses on the logistics and supply chain of a prime US pharmaceutical group, Westminster, which owns three companies, manufacturing and distributing differentiated products autonomously. It talks about the proposed changes in their supply chain systems, which are, creation of a consolidated warehousing system, having mixed shipments to save on costs, incorporate IT to maintain its inventory using ERP software, and have an integrated supply chain management system.
It talks about which processes within the supply chain should be centralized, and which should be de-centralized so that an efficient system is maintained.
The report concludes that the strategy of having a consolidated warehouse would work best for the company, and they should follow it, keeping the warehouse in a location which is accessible by all its manufacturing plants easily.

Table of Contents

Introduction 2
Impact of the three new alternatives on transfer and customer freight costs 3
Impact of warehouse consolidation on inventory carrying costs, customer service levels, and order fill rate 4
Effect of Third Party or private warehousing facilities on warehousing costs. Its effect on handling, storage, and fixed facility costs 5
Effect of shipping mixed shipments from consolidated distribution centres on individual company cost and performance 6
Eight supply chain processes in terms of customer classification and degree of centralization/decentralization. 7
Brief description of the logistical system design recommended for Westminster’s integrated consumer products. 8
Conclusion 9
References 10

Introduction

“Supply chain is defined as a set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer.” (Mentzer, 2001)

Westminster Company is one of the largest manufacturers of consumer health products, based in US. It has three wholly-owned



References: Babel, R. 2005, ‘Supply Chain Management’ Bowersox, D.J., Closs, D.J., & Copper, M.B., 2010, Supply Chain Logistics Management, 3rd Edition. McGraw Hill, Sydney Mentzer, J.T., 2001, Supply Chain Management, Sage Publications, California Vasiliauskas, A.V, & Jakubauskas, G., 2007, Principle and benefits of third party logistics approach when managing logistics supply chain, Transport Research Institute, vol XXII.

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