August 10, 2013
The world of supply chain management can be very complex. As a company grows, the supply chain also grows due to an expanded customer base along with all of the things that come with company growth and expansion. Supply chain is defined as a channel of distribution beginning with the supplier of materials or components, extending through a manufacturing process to the distributor and retailer, and ultimately to the consumer (dictionary.com). A key component in the supply chain process is logistics. According to Bowersox (2012), logistics is the work required to move and geographically position inventory. Placing inventory in the right geographical position is critical for a company’s success. The focus of this cast study will be Westminster Company which is one of the largest manufacturers of health products in the United States. Westminster Company has three types of subsidiaries: manufacturing grocery products, drugs and mass merchandise. With a very competitive market, Westminster must keep tabs on its supply chain and logistics process in order for their supply chain to be effective and keep pace with the competition. The three subsidiaries’ major clientele were the focus on research project that helped Westminster pinpoints why there was major annual turnover. The research created a solid overview of the customer requirements, as well as the company’s operations process. Based on the geographical location of its manufacturing facilities and warehouses, a question was posed on how to implement a strategy which will enable them to lower costs in the areas of transportation, storage and handling and fixed costs. The findings of the report highlighted such issues as having a consolidated warehouse, and shipping mixed consignments from the consolidated warehouse. These findings prompted an action plan to correct the deficiencies.
Logistics is a very important function within business. A properly working logistics system allows the manufacturing, operations and every other aspect of the business to thrive. Inventory must be on the shelves of retailers, the retailers and the manufacturer could have a strained relationship if this isn’t corrected. Merchandise must be transported from the manufacturing plants to the warehouses, then to the retail stores and finally sold to the customer from the retail stores. The effects of Westminster’s implementation of third-party logistics are documented as a useful strategy in the report. Transportation along with warehousing and information systems plays a significant role in the framework of logistics. Logistics creates the efficient flow of goods between supply chain partners, and is responsible for the maximization of profits and competitive advantages.
The replenishment procedures of traditional inventory are replaced by point of sale (POS) driven information systems. Doing this will enable Westminster in the production of goods according to the customer’s requirements. With demand forecasting having the capability of being erroneous, this system should reduce the need to forecast demand. Implementing this method will help prevent wastage of excess, unnecessary inventory, and will help in reducing the cost of storage. The ideal thing for Westminster to do is to implement some type of ERP software. This software will allow customers to give the position of their inventory in an accurate and timely manner. The software will also allow real-time inventory management of all points of sales and their various plants and warehouses. Daily inventory and sales requirements can be
assessed and this will allow for shipments to be readied in a more efficient manner. Trucks can be loaded so that they are able to cover more territory in a day’s time, which would lead to distribution of more products. The products are delivered according to the...
References: Dictionary.com (2013)
Bowersox, D., Closs, D., & Cooper, M. (2012). Franklin University custom publication: Transportation and logistics management. Boston: McGraw-Hill/Irwin.
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