Westminster Company (Case Study Sample)

Supply Chain Management: Westminster Company
Student’s Name
University Affiliation
Westminster Company
Westminster Company was founded in 1923. It is one of the world’s largest producers of consumer health products. The company maintains regional offices in Latin America, Europe and the Pacific Rim. These offices are often used by the company to support manufacturing and distribution of their products overseas. The local framework of the company is based on three separate but wholly owned companies which specialize in manufacturing and distribution individual product lines. Decentralized management has been the tradition of the company over the years. Today things have changed due to the growing competition as well as the increasing number of Westminster consumer base. Thus, the company has been forced to re-evaluate its business structure in order to attend to the needs of the market and ensure that the company attains its maximum potential. This paper discusses the steps taken by Westminster in its supply chain management and offers recommendations to that effect.
There are a number of alternatives on the company that are proposed whose impact will be greatly felt in the consumer freights and transfer. This is because they are aimed at reducing the freight costs of the products as demand increases. The order process will have to be altered to allow three deliveries to occur weekly instead of one. The company will have to integrate the consumer products of all the Westminster companies that need to be delivered in specific destinations. Instead of each company making individual deliveries, which would be eventually costly to Westminster Company as a whole, the three companies will combine in the delivery process and the different product lines will be delivered together reducing the overall cost on the mother company. The companies through collaboration will have to demarcate specific sections of the cargo for different product lines. The company will have different boxes and barcodes that go in hand with the regulations and will deliver the consumer products as one.
The consolidation of the warehouse will have a decrease on the inventory costs as they will have to combine the carrying costs. There will be an increase in the labor required in the warehouses as the amounts that will be received will be higher than before. Currently, the system in the warehouses caters for one delivery once a week. The proposal is to have three times delivery on a weekly basis. This means that the capacity will be increased by three times for the company to streamline its customer relationships that ensure that customer service is not negatively affected. Some consumers may not wish to create an individual relationship with the company, and other means have to be explored in order to increase the order fill rate that in turn increases deliveries.
The use of private warehouses will increase the warehouse costs as they may be charged higher rates. As the company does not own the warehouses, it will have to incur higher costs in the leasing of the warehouses. The cost of the company building or buying its own warehouses immediately may be more costly than the leasing costs. The handling of the products will be interfered with to some extent because the company does not own the warehouses, and the private warehouses may have their own staff and rules. Thus, the company has to ensure that the already existing warehouses staff of the private facilities is trained in order to deal with the company products are required. If the nature and external conditions of various products differ in the newly leased environments, necessary measures have to be put to see that the company does not attract unexpected losses. Therefore, the fixed facility costs will also increase in order to cater for the increase in the quantities which will require more attention.
The individual costs will be reduced as the overall shipping costs will be shared by the companies. The company’s products will be shipped as one. Thus, the cost will be divided into three to ensure that the companies do not incur individual costs in the shipment. Three separate shipments will always be more expensive than one big consolidated shipment. The performance of the individual companies will be increased as the load of work and resources that would be concentrated on the shipments c...