WHITMORE PRODUCTS: TIME BASED LOGISTICS AT WORK

Introduction:
Whitmore: Top furniture manufacturer.

Homehelp: Major home decorating retailer.

 Nan Peterson has proposed John Smith (Sales representative) to adopt time
based logistic management.

 Furniture segment is coming more prominent in the portfolio of HomeHelp

and has the potential to grow by 20%.

 Furniture Industry: Less investment in Information Technology and maintains

high inventory throughout the channel.

 Whitmore is evaluating the benefits of adopting the proposal.

Question 1:

What are the major business propositions for Whitmore and Homehelp to
consider in evaluating this proposals? Is time based logistics the right strategy
for each company?

Answer:

Business proposition for Whitmore :

 Will get difficult to duplicate competitive advantage in high consolidated market.

 Dramatically decrease in business with Happy Home (25% of total business) : Erratic
purchase is causing under capacity of production.

 High growth potential of HomeHelp (from existing 10% to 20% in future)

 Will be needed to store less inventory in the whole Supply Chain.

 Will reduce lead time from weeks to days : will cause customer satisfaction and high
inventory turns.

 Good experience of QuickJeans about time based logistic system.

 Quick information about customer trends, will avoid obsolescence.

 More accurate predictions will cause improvement in stock-out performance.

 Will help in making direct relations with professional decorators to get information on
coming trends.

Business proposition for HomeHelp:

 In synchronization with business strategy of focus on furniture segment

 Whitmore has the potential to invest in new proposal of exclusive distribution arrangement
(Whitmore is investing in IT)

 Direct to store delivery will help in reducing extra distribution cost

 Will help in reducing the inventory at DC and warehouses

 Will reduce the waiting time from weeks to few days

 Company can promise the decorators about the exact delivery time

 Logistic partner is already working with other industry on time base logistic
Question 2 :

What are the benefits and barriers to this proposal for both Whitemore and
Homehelp? What other factors need to be considered?

Answers :

Benefits :

 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.
 Whitmore can benefit by having another secure source of revenue in
addition to its alliance with Happy Home & Living that is in financial
trouble .
 Whitmore’s reputation of providing low quality, outdated products can be
changed.
 Home Help can benefit 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.

Barriers :

 Whitmore: It would take a long time period to realize the expected benefits of
the time-based logistics capability.

 Distribution channel deloading leading to declining sales.

 Home Help: Resistance to change.  This company 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
Whitmore Company.
Question 3:

If you were Whitemore’s top management, what suggestions would you make
to improve the current proposal for long-run viability?

Suggestions :

 Whitmore for long term benefits, can go for self owned logistics instead of
relying on national for-hire carrier :  Cost savings.  Higher responsiveness. 
Higher reliability.

 RFID system can be used instead of barcode system :  Instant tracking by

both the parties.  Reusable RFID chips can save costs.  Time for order
processing and delivery reviewing can be reduced.

Question 4:

If you were HomeHelp, would you accept or reject the proposal? Why?

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 Whitmore. 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. If we were home help, we
would accept the proposal. Due to the fact that several companies that have
adopted a time-based logistical strategy have reported success. This implies that
there is a high likelihood of increasing profitability by forming an alliance.
Moreover, the plan would probably enhance the company’s competitive
advantage. The fact that Whitmore plans to advance in Information Technology
is also an added advantage. In conclusion, as per the proposal, the adoption of
time- based logistics strategies would benefit both Whitmore and Home Help
companies. Despite the fact that there might be challenges such as resistance to
change, effective communication would help in dealing with the potential
barriers.