Case 4 Westminster Company
Westminster Company is a family-owned pharmaceutical supply business established in 1923. The company has being among the largest producers of consumers health products and brand recognition all the over the world. Westminster has regional offices in the Pacific Rim, Latin America, and Europe which operated under decentralized management, maintaining unique and independent companies. In today’s world, Westminster Company has greatly expand; the growth of key customers into large account has forced the company to reevaluate its traditional supply chain, which were creating a new series of issues. As a result, costumer composition and customer requirements were the two main disadvantages the company was facing. Such issues include the incompetence to meet customers’ requirements, numerous and extensively spread order cycles and delivery, and backorders.
According to the case study, Westminster’s vice president of SCM Alex Coldfield visualized three important changes to the supply chain. First, introducing a new and faster technological system such as POS driven information system, with the help of a team-work it will give the company and customers accurate information at the point of sale. Second, Westminster Company should have the ability to reduce order cycle times. At this point, the company will be able to mix merchandise from the three different companies and create a customize order and increase the demand for direct store delivery. Third, by creating customize orders, the need of new programs such UCC 128 and RFID will facilitated the procedures and modify the traditional order fulfillment.
These suggestions will also affect Westminster distribution network, the three companies which are located in FL, CA, GA, NJ, and TX with its own manufacturing and distribution center, will face changes in manufactured, storage and deliver. For example, the company shipment profiles showed 500 pounds or less are approximately 47 to 50 percent of shipments, if the company creates customized orders it will generate less orders, and possible the advantage of using small trucks.
Furthermore, Westminster’s CEO Wilson McKee requested to organize a supply chain taskforce, with the help of upper management from all the three companies, Mckee will like to improved distribution performance and responsiveness. Then, Mckee wanted to create a way to measure the performance gaps that existed between present day and the idealized process. Mckee also mentioned a framework he was introduced, and it had help different companies achieve a firm supply chain. Switching to the new changes suggested by Westminster’s vice president Alex Coldfiled will create initial cost to the company; by implementing the POS driven information system customers will have the advantage to order according to their needs, this will go alone with a new SKU system, which will launch “work teams” that will create a necessity of new or well-trained employees which can offer a better managing and ordering distribution. By increasing the ordering cycle, transportation cost will increase by creating direct store delivery and lowering backorders. Lastly, creating specific customer requirements, will increase initial cost by labor which will required more people working on customized pallets, and customer specific inner pack and display units. On the other hand, these changes will lower the long term cost by using accurate and daily information from the new SKU system, this system will help the company achieve the responsiveness to meet customer requirements by customized the order with products from the three different companies. These costs factor will affected everyone from the sales force to the supply chain. Since, the initial costs are establishing new systems and the possibility of increasing a deliveries with small trucks; the company will assumed the costs. One of the...
References: Bowersox, D. (2013). Supply chain logistics management (4th ed.). New York: McGraw-Hill.
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