1.- WHAT ARE DE MAJOR BUSINESS PROPOSITION FOR WOODMERE AND HOMEHELP TO CONSIDER IN EVALUATING THIS PROPOSAL?
The major business proposition for Woodmere and Homehelp to consider within the proposal is the advancement of their company through an advanced and smarter form of managing supplies and customers’ needs. With Homehelp as a major home decorating retailer that’s looking for new ways to improve and Woodmere has the reputation a cliental already in place and are looking to further advance the logistical time based capability. Homehelp major focus has been to deal only with manufacturers and keep cost low and service high. Homehelp also looks to keep a lock on everyday low price and having premium service for the customers. Woodmere has been moving towards looking to invest in information technology to further push their business to a wider audience and even more timely deliveries
The case revolves around a sales representative for a top furniture manufacturer, named John Smith. John has had a chance to interact with Nan Peterson, the leader of a product team at a furniture decorating company called Home Help. Home help is concerned by the fact that furniture industry as a whole seems to be lagging behind in terms of logistics operations. Nan believes that John’s company, Woodmere, could collaborate with Home Help to create a logistical capability that is time-based. The collaboration would also result to adoption of a customized delivery system. To make the plan effective, John was to given a three week period to come up with a tentative proposal.
2.- IS TIME BASED LOGISTICS THE RIGHT STRATEGY FOR EACH COMPANY?
The time-based logistics will be the right strategy for each company. The first reason is the sales information transmission which POS data clearly indicates the product’s demand from the customer to the manufacturer. It’s more accurate that a forecast. The second point is to reduce the order cycle time. The actual sales and consumers trends will guide the manufacturer to respond the order quickly. The third factor is that decreases the inventory level. The inventory is well controlled by knowing for sure customer’s needs
3.- WHAT ARE THE BENEFITS AND BARRIERS (SHORT-AND LONG TERM) TO THIS PROPOSAL FOR BOTH WOODMARE AND HOMEHELP? WHAT OTHER FACTORS NEED TO BE CONSIDERED?
The short and long-term benefits of the proposal include faster delivery and better inventory control, an innovative new way of handling furniture, and the ability to work with decorators, which the company wanted to do. The Long term benefits are Building a stronger and more reliable business partnership by making the switch and continuous improvement sustainability. One of the other benefits of this proposal is that it would enable both companies to increase their sales and profitability. By adopting the proposal, both companies would be able to reduce the total channel costs as well as provide customers with premium product availability. By adopting the proposal, both companies would be able to reduce the total channel costs as well as provide customers with premium product availability, Woodmere would benefit by getting withdrawing an alliance with a retail company that is in financial trouble .
Moreover, the image of the company would be greatly enhanced. A major barrier that Woodmere would face in implementing the new strategy is the fact that it would take a long time period to realize the expected benefits of the time-based logistic capability. The proposal would benefit Home Help by providing shorter timetables that would not only reduce the cost of rescheduling but also improve cash flow and efficiency in product delivery. The company will have the chance to have independent distributors with delivery programs that are flexible. A major barrier that Home Help might face is the resistance to change. Owed to the fact that this is a company that is well-known and has been making huge profits, the management and even employees may portray great resistance to change. Some may be opposed to the idea of partnering with Woodmere Company.
4.- IF YOU WERE WOODMERE’S TOP MANAGEMENT, WHAT SUGGESTIONS WOULD YOU MAKE TO IMPROVE THE CURRENT PROPOSAL FOR LONG-RUN VIABILITY?
If I were Woodmere’s top management, I would recommend a thorough research on the proposed strategy. This is because neither Woodmere nor Home Help Company has ever tried using the strategy. It is therefore not a guarantee that the expected benefits would be achieved. Home Help Company has just been exposed to the new strategies and is intending to give it a try. It is always clear that even though a strategy may seem to work at a given company, the same results may not be achieved when the same strategy is used in another company. It is therefore essential to conduct intensive research and consider the outcomes from different perspectives.
Home Help is considering forming an alliance with a manufacturing company based on the fact that other firms have reported success by using logistic applications. This does not seem to be a solid base for making the decision to form an alliance with Woodmere. However, the business arrangement is a plan that is worth taking into consideration, owed to the fact that the benefits that would be achieved outnumber the potential barriers. Risk-taking is one of the characteristics of a good business venture and entrepreneurs. Hence, the proposal is worth trying. For long-run viability, effective communication is necessary. It is essential to communicate to all parties involved concerning the potential benefits and barriers to the proposal.
5.- IF YOU WERE HOMEHELP, WOULD YOU ACCEPT OR REJECT THE PROPOSAL? WHY?
If I were home help, I would accept the proposal. This is due to the fact that several companies that have formed an alliance with manufacturing companies to adopt a time-based logistical strategy have reported success. This implies that there is a high likelihood of increasing profitability by forming an alliance with Woodmere Company. Moreover, the plan would probably enhance the company’s competitive advantage. The fact that Woodmere plans to advance in Information Technology is also an added advantage.