Woodmere Products: Time Based Logistics at Work - Research Proposal Example

Case: Woodmere Products: Time Based Logistics at Work Overview From Woodmere's perspective, the HomeHelp partnership offers substantial rewards, but at a price. This case demonstrates the all-encompassing change that is sometimes required for a firm to maintain long-term competitive success. Change is very difficult to achieve in organizations large and small. Laborers, managers and executives alike establish "comfort zones" that are difficult to break. The case follows John Smith as he first studies the potential benefits of refocusing production and logistics strategies before promoting the idea to top management. Solutions to Questions 1. As the supplier, Woodmere is faced with the ultimatum of effecting the change (implementing the time based service strategy) or losing the HomeHelp business. To implement the time based strategy will require new approaches to production and logistical operations as well as significant, constant investments in technology. The changes are likely to affect the way Woodmere conducts business with other customers and channel participants (suppliers, transportation providers, etc.). As the customer, HomeHelp has issued the ultimatum to Woodmere Products. However, should Woodmere elect to turn down the opportunity, HomeHelp will have to look elsewhere for products and service. Though the issue is open to debate, it seems that both firms stand to benefit from the time based strategy. Both firms stand to gain potential competitive advantages by being the first in their respective industries to adopt time-based logistics practices. Ideally, alliances should create synergy, where the dynamics of the whole is greater than the sum of the parts -- both firms succeed at levels unachievable when alone. As noted above, significant investment is required of each firm to see the strategy reach fruition. 2. Time based logistics is an entirely diverse approach for both companies. But on the other hand the strategy could perk up the service and provide clients with the desired commodities on time. The strategy would improve the distribution system as a whole for both the companies. There are certain pros and cons to this proposal for both the companies. The decorators associated with Homehelp wanted a convenient service and Homehelp thought that this approach would be very useful in providing them with timely deliveries. Woodmere's merging with Homehelp would greatly improve Woodmere's image as Homehelp are professional decorators and thus would help them improve the current style in furnishing. The warehousing cost for both the companies would be reduced. It would also reduce scrap and warrantee cost. The proposal would reduce the chain of distribution because of which the cost incurred would be reduced. And thus the companies could invest more money in the improvisation of products. While on the other hand Woodmere has to transform the whole present activities, and this would require a huge amount of capital. A whole set-up has to be done to restructure all the needed steps. But the reorganization would increase the total expenses of Woodmere in doing business with their clients. Unstable business environment makes it difficult to predict the future sales forecast. Given facts the companies need to invest a lot and may have to keep on investing for the upgrades in information technology. 3. As Woodmere had business relationship with Happy Home & Living, which accounted for 25 percent of Woodmere's sales. Woodmere heavily relied on Happy Home & Living which resulted in a heavy loss for Woodmere. On the contrary Homehelp seems to be an attractive company to be associated with. As a senior management official I would suggest that daily or weekly replacements should be done to avoid running out of inventory. They should reduce the lead time so that the goods reach the respective destination in time. They should invest in the information technology, upgrade it whenever required which would help them in introducing EDI through which they can transmit POS safe and quick. The transportation service should be improvised further so that the desired stock reaches the destination in time. There should be an order specialist who should look after all the required orders and process the final scheme to the manufacturing plant where they can be manufactured. 4. I will consider accepting the proposal as it seems quite feasible. It might increase the ordering cost as more orders would be sought, the time based logistics system also considered as the Just-In-Time procurement system would help in reducing the inventory holding cost and help in maximizing the company's profit. All the required commodities will be delivered on time when required with the help of the automated system. Read More