Feb., 14. 2013
Westminster Company is one of the largest manufacturers of consumer health products, based in US. It has three wholly owned subsidiaries, manufacturing grocery product, drugs, and mass merchandise. Intense competition in the market, and concerns of having an effective supply chain, compelled it to evaluate its supply chain and logistics. The main focus of its research was the key clients of the three companies. To start, logistics is an important function of the business. Without a proper logistics system, all the manufacturing, marketing and other activities would fail. If the products are not in the shelves of the stores, they won’t be sold. Goods need to be transferred from the manufacturing plant to the storage centers, and from these to the retailers, and finally, to the customer. Furthermore, transportation, warehousing, and information systems play very significant roles in the logistics function. For supply chain in particular, logistics creates the efficient flow of good between supply chain partners, and is responsible for the maximization of profits and competitive advantages. However, due to the geographical varsity of its manufacturing plants and warehouses, it posed a critical question, how to implement a good strategy enabling them to reduce costs-transportation, storage and labeling, and fixed costs.
According to the case, Westminster Company has some issues that affect the transportation. What the company does is three deliveries per week as opposed to the earlier one delivery will increase the transportation cost, but if these deliveries can be consolidated such one trails can provide deliveries for all the three companies at the same time, instead of the three companies sending their own trailers individually. Shipping mixed shipments from consolidated distribution centers is advantageous for the company. Its logistics cost is reduced by delivering various products on the same...