Westminister Company

Westminster customer composition and customer service

Executive Summary

This report focuses on the business issue of world's biggest pharmaceutical company- Westminster. The report emphasizes the two important aspects of customer composition and customer service requirements, which requires to be assessed in improving the supply chain practices. Further, Westminster needs to reevaluate the existing supply chain practices to provide accurate, timelier and efficient inventory delivery. The report analyze each of the three proposed alternatives and discusses about the effect of warehouse consolidation on inventory carrying costs, customer service levels and order fill rate. Enforcing a third party warehouse rather than a private warehouse has also been examined. An extensive analysis is also done about the proposed logistical system design and how that enhances the company cost and performance.

The recommendation that Westminster should execute is to redesign and upgrade its warehouse network to take full benefit of economies of scale and enhance performance. With this new and restored design there would be only five distribution centers all over the United States to distribute the products of Westminster. The section of network design emphasizes the shutting down of three distribution centers namely that of Company A and C at New Jersey and the DC of Company C at Los Angeles. On the basis of the assumptions given in the report, the total savings Westminster makes is $ 3,321,000. The individual company savings for Company A are $1,043,000, for Company B $802,000, and for Company C $1,476,000. The suggested implementation also results in a better product availability and efficient service. The overall advantages which spruce up are abundant- inventory carrying costs, reduction in transportation costs, storage costs, handling costs, fixed facility costs. Moreover, the inventory turnover and stronger customer relationship would slightly improve which would make...