Running Head: PA 1: Case Study – Customer Service at Woodson Chemical Company 1

PA 1: Case Study – Customer Service at Woodson Chemical Company

Miguel Moreno Alcántara

Westcliff University

Professor Jason Gateas

Oct. 31, 2018

PA 1: Case Study – Customer Service at Woodson Chemical Company 2

PA 1: Case Study – Customer Service at Woodson Chemical Company

Introduction

Founded in 1899, Woodson Chemical Company (WCC) is a manufacturing company

catering to chemical industries and personal needs. The case study pointed out, producing more

than 1,500 products, WCC North America has manufacturing plants located across the U.S., five

distribution centers, and 325 stocking points (Bowersox, Closs, & Cooper, 2002). Despite

apparent success in sales, the company is facing certain issues. In this paper, these issues will be

addressed and tentative solutions will be proposed and analyzed. Furthermore, the viewpoint of

Melinda Sanders, a lead distribution planner, will be examined. Last but not least, the

applicability of the problem will be evaluated across its global operations.

Critical Issues

As outlined in the case study, the company is fronted with the issue of poor customer

service performance and the lack of integration in its supply chain management (Bowersox et al.,

2002). Although the business is rapidly expanding across regions and its customer base is

growing, it is frequently impeded by the absence of communication between departments and

structural support.

Recommended Changes

In order to address the aforementioned issues, WCC North America should reorient its

supply chain operations to be more customer-focused; it also needs functional integration of its

divisions and supply chain operations. Since its customer dissatisfaction stems from the inability

to access real-time order status, the company can address such need by ensuring timely

communication between levels of supply chain (e.g., receiving orders, inventory, production, and

transportation) and information transparency. The introduction of knowledge management (KM)

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system – an information system in which logistics and customer information is hosted – can

effectively support the need of information sharing between customers and suppliers (Shakerian,

Dehnavi, & Shateri, 2016).

Risks and Benefits

As mentioned, the recommended changes can bring forth countless benefits: a) for

corporate management: implementation of KM substantiates information sharing both internally

(i.e., interdepartmental) and externally (e.g., with suppliers and peers) which provides an

indispensable competitive advantage (Shakerian et al., 2016); a customer-oriented approach can

improve customer service satisfaction significantly; b) for line distribution management: real-

time information sharing promotes better planning in various levels of supply chain and cost-

effective distribution (Shakerian et al., 2016); c) for customers: greater satisfaction is warranted

when customers feel heard and understood (Bowersox et al., 2002); more trust is cultivated

between customers and suppliers as WCC North America becomes more responsive to its

customers. It is also worthy to note that management cost can be reduced through successful

implementation of KM since data-sharing becomes more efficient and well-managed (Tjahjono

et al., 2017).

However, the company can take on potential risks while implementing these changes.

From the corporate’s standpoint, the introduction of KM requires collaboration between

departments and capital investment (Shakerian et al., 2016). The high cost of implementation

might be a major concern for the company since it is already spending a large amount in

management. Interdepartmental collaboration might call for extensive organizational structural

changes which could potential cause further capital investment. Moreover, the concern for high

cost also goes to its line distribution management. The additional investment from initial KM
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implementation means that the company will have to take a toll on its already sub-optimal

financial situation. Furthermore, the potential failure of initial implementation could loose some

of its clients. Customers may fail to recognize the new IT system or take time to adjust to the

new system and, therefore, further prolong the implementation process.

Impact of Recommended Changes

As already mentioned in the previous section, the proposed changes will positively

affected WCC if successfully implemented. The introduction of KM not only warrants effective

knowledge sharing and encourages collaboration but also provides a valuable tool for cost-

effective management (Merlino et al., 2017). Expertise exchange can also take place in KM

where industrial peers and experts share their research and experience. In addition to external

exchange, internal knowledge sharing becomes more frequent as WCC cultivates a collaborative

work environment (Shekarian et al., 2016). For the management team, the decision-making

process will be easier as this practice becomes more standardized across the organization. With

input from all departments readily available, management can formulate strategies accordingly.

Recommended Changes in Information Processing Arrangements

The case study mentioned that the company often encountered problems with inventory

management and distribution network due to its complex organizational structure (Bowersox et

al., 2002). As listed by Tjahjono et al. (2017), the introduction of technologies such as radio-

frequency identification (RFID) and automatic identification and data collection (AIDC) can

lessen the burden caused by high order volume and vast distribution network. With the

progressive advancement of technology, the concept of “smart logistics” is gradually becoming

standard practice across industries (Barreto, Amaral, & Pereira, 2017; Merlino et al., 2017). As

the idea of “Internet of Things” (IoT) is becoming more popularized, organizations are starting to
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adopt big data collection into logistics operations. RFID, for instance, is used for efficient

product delivery tracking and improves inventory control as measured by key performance

indicators (KPIs) such as “order fulfillment status”, “time from receiving to pick location”, and

“time to market” (Tjahjono et al., 2017; Witkowski, 2017).

Melinda Sanders’ Viewpoint

As stated in the case study, Melinda Sanders has a rich academic background and

experience in various departments in WCC (Bowersox et al., 2002). While she has demonstrated

good understanding of some of the issues, Sanders’ viewpoint might be limited by her position.

Working in the chemical and performance products (i.e., Division 1), she might lack exposure to

the operations of two other divisions, namely plastic products, hydrocarbons and energy

(Division 2) and consumer specialties (Division 3), and not overseeing the “big picture”. Given

the complexity of the organizational structure, her sole understanding of the problems is not

sufficient to propose an overall solution to all the critical issues. Therefore, input from other

department leads and top management team is also needed in order to strategically address the

identified issues.

Global Applicability

Given that one-third of its business is conducted abroad (Bowersox et al., 2002), WCC is

most likely facing similar issues in its offshore operations. As the company has already been

experiencing issues with inventory management and lack of department synchronicity, its

oversea operations could further complicate the existing problems (Thies et al., 2018). It is noted

that, in the case study, WCC is facing severe issues handling incoming orders in developing

countries such as China and Korea (Bowersox et al., 2002). Although the reason was not

explicitly pointed out in the study, the company’s inability to fulfill the overgrowing demand
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could be attributed to its lack of functional integration and poorly managed inventory system.

Thus, it is recommended that WCC should prioritize implementing changes to fix domestic

problems then apply successful practices to its international operations. Since it still has two-

thirds of business carried out in the U.S., it should focus on addressing the needs of its domestic

customers and, possibly, partially restructure the company to facilitate information exchange.

Conclusion

In this paper, the main issues WCC is facing are identified to be customer dissatisfaction

and lack of sufficient functional integration. Thus, it is proposed that the company should

promote customer-oriented operations and consider the implementation of KM system. Even

though the suggested changes possess the risks of additional capital investment and loosing

customer base, the benefits could significantly outweigh the potential loss. Furthermore, it is

recommended that WCC should adopt sustainable data-collecting technologies to improve its

information processing system. What’s more, Melinda Sanders might lack oversight of the entire

operation given her role in Division 1. Input from other divisions and top management should be

considered when making executive decisions. Last but not least, WCC is likely having similar

issues in its oversea operations and it could further exacerbate current problems. Since the

majority of the business is conducted in the U.S., it should address domestic issues prior to

solving problems overseas.

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References

Barreto, L., Amaral, A., & Pereira, T. (2017). Industry 4.0 implications in logistics: An

overview. Procedia Manufacturing 13(2017); 1245-1252.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002). Supply Chain Logistics Management.

Boston: McGraw-Hill.

Merlino, M., & Sproģe, I. (2017). The augmented supply chain. Procedia Engineering

178(2017); 308-318.

Shakerian, H., Dehnavi, H. D., & Shateri, F. (2016). A framework for the implementation of

knowledge management in supply chain management. Procedia – Social and Behavioral

Sciences 230(2016); 176-183.

Thies, C., Kieckhäfer, K., Spengler, T. S., & Sodhi, M. S. (2018). Spatially differentiated

sustainability assessment for the design of global supply chains. Procedia CIRP

69(2018); 435-440.

Tjahjono, B., Esplugues, C., Ares, E., & Pelaez, G. (2017). What does industry 4.0 mean to

supply chain. Procedia Manufacturing 13(2017); 1175-1182.

Witkowski, K. (2017). Internet of Things, big data, industry 4.0 – innovative solutions in

logistics and supply chain management. Procedia Engineering 182(2017); 763-769.