Case Study On Logistics Woodson Chemicals.

CASE STUDY

Case 8 – “Customer Service at Woodson Chemical Company”

Assignment Outcomes

Understand importance of logistics in business competitiveness

Evaluate the use of integrative management techniques in supply chain and logistics management

Be able to apply Transportation and logistics management in modern business

Integrate Packaging and handling techniques in a supply chain management system.

Introduction

The critical issue concerning the Woodson Chemicals North America is the lack of real-time information delivery system about the logistics of the supply operations to the customers. This lack of information and monitoring system the customers are unaware of the specific factors like delays and the position of the product at the time which affects their decision-making ability. Therefore, the expansion of business which continued without addressing this issue compounded the problem and created more and more logistics and management bottlenecks by initiating more customer grievances. The subpar quality of the order information process with a poor reputation in customer relationship management the system is one weak link that makes the customer demands decrease. This is amplified by the industry oversupply due to foreign suppliers (Marcilly, 2003).

Analysis:

The most effective change to address the issue of the company is the establishment of real-time order information system in the company to upgrade the reporting of its logistics operations. The development of the order information system upgrade that allows the customers access to the real-time information regarding the orders is the best solution. This is the best step to increase customer satisfaction as this has been the most important reason for customer grievances and low rating of the company despite the quality products (Shamsuzzoha & Helo, 2011, January). Therefore, the upgrade of the order information might not be the only solution to improving the condition of the customer relations, but this is the best way to improve the situation vastly with little expenditure. The organizational structure where the different divisions address their needs separately is inefficient and causes customer grievances due to confusion and complexity of the information path (Olhager&Prajogo, 2012). Therefore, changing the organizational structure and promote a streamlines information delivery system included in the logistics is the only solution on the horizon.

Solution:

Woodson Chemicals North America corporate management has the risk of ruining the flow of command as the structure of the organization needs to be overhauled as the system is upgraded to keep the quality on par with the other competitors who are gaining a market advantage with the help of a better logistics information system. The benefit tot eh corporate management would be better decision making capability through better availability of real-time information regarding order and supply chain. The main risk of the system is the complexity of the process that would rise in the process and make the corporate governance more taxing (Moshkdanian&Molahosseini, 2013).

In case of the line distribution management, the main risk of the proposed development is the integration of the information systems of the four different divisions of the company and high amount of available information would complicate the distribution process as there would be no intermittent communication between the supplier and the buyer which would result in chaotic delivery patterns with variable cost (Shamsuzzoha&Helo, 2011). The benefit would be to address the gap in information delivery in a proactive way instead of a reactive one.

Woodson Chemicals North America customers are mostly bothered by the competitor’s availability in the region, and the same can be used for the every time and real-time information on the progress of the order. Therefore, the risk to the system is the knowledge of the condition of the inefficiencies to be public knowledge through this all-access real-time logistics information system.

The most apparent impact on the North America operations of the Woodson Chemicals would be a high level of transparency in the logistics system and better scheduling of the delivery and thus better planning and such at the end of the customer. The customer would be more empowered by the availability of logistics information which would allow them to better plan and thus a high level of involvement with the company (Prajogo&Olhager, 2012). The problem that is currently plaguing the logistics operations of the company which is affecting the operations capability due to lack of information would be eradicated which lead to better customer perception, and the reputation of the company will raise. The current highly differentiated procurement of the company divisions that specialize very different products would allow for a diverse source for the procurement, therefore, the production rates and order delivery time will be varied. This can have an impact on the customer ordering decisions if the information becomes readily available to the customer.

Justification

The only change that makes sense in the context of the situation and problem is the restructuring of the information system that is divided into different divisions who each have the same responsibility. The centralization of the information system and logistics which is then divided into different divisions as per the current structure would be much more efficiency as the data availability would be greater, and the supply chain would be synchronized to meet the needs of the different department simultaneously (Marcilly, 2003). Therefore the information processing arrangements should be brought under one central part of management that would make establishment data repository and real-time information delivery possible.

Melinda Sanders in not in a position to understand the Woodson Chemicals North Americas’ problems as the operations are divided into different division because of highly different nature from one another and the responsibility of the management fall under different divisions that operate as independent entities. Without the knowledge of the operations and requirements of all divisions, a full understanding cannot be gained about the problems (Prajogo & Olhager, 2012).

Conclusion

The applicability of the situation across the global operations is low as the chemical feedstock source being related to oil production and processing. Therefore the availability of stable source allows for vertical integration of the operation of any industry of the same nature (Vennestrøm et al., 2011). Therefore, the procurement difficulty is at different levels, and the constraints of low-cost production are different. Therefore the use of the same strategy across the globe has very low chances of similar success.

References

Vennestrøm, P. N. R., Osmundsen, C. M., Christensen, C. H., &Taarning, E. (2011). Beyond petrochemicals: the renewable chemicals industry. AngewandteChemie International Edition, 50(45), 10502-10509.

Marcilly, C. (2003). Present status and future trends in catalysis for refining and petrochemicals. Journal of Catalysis, 216(1), 47-62.

Prajogo, D., &Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships, information technology, and sharing, and logistics integration. International Journal of Production Economics, 135(1), 514-522.

Olhager, J., &Prajogo, D. I. (2012). The impact of manufacturing and supply chain improvement initiatives: A survey comparing make-to-order and make-to-stock firms. Omega, 40(2), 159-165.

Moshkdanian, F., &Molahosseini, A. (2013).The impact of supply chain integration on the performance of Bahman Group. Interdisciplinary Journal of Contemporary Research in Business, 5(1), 184-192.

Shamsuzzoha, A., &Helo, P. T. (2011, January). Real-time tracking and tracing system: Potentials for the logistics network. In Proceedings of the 2011 International conference on industrial engineering and operations management (pp. 22-24).