Distribution Strategy Scenario, Essay Example

The benefits of centralized management for Wonderful Widgets will be explored.  The challenges which had been addressed in completing the scenario will be reviewed from the perspectives of  Jaffeux &  Weiser (2013) and Waters (2010). The benefits and the drawbacks of centralized management for wonderful widgets will be explored.

Centralized Management

Wonderful Widgets would be able to optimize their profits by applying a central management perspective.  The application of centralized management may derive more extensive delivery times on the fulfilling of orders, there are a variety of advantages which are conferred in comparison to decentralized management (Jaffeux & Weuser, 2013; Waters, 2010).

Customer Service Functions

In centralized management, the supplier is able to position the best personnel, inventory and equipment systems with a concentration over less space. This characteristic is advantageous to the client or retailer in that the supplier can more directly focus on the requirements of the clients. The Wonderful Widgets service representatives can focus their efforts on fulfilling the needs of the retail clients, in comparison to simply coordinating the transport of the wonderful widgets as needed by the purchasers or the administrators of the Wonderful Widgets storage facilities (Jaffeux & Weuser, 2013; Waters, 2010).

Decreased Inbound Expenses

The distribution of the wonderful widgets can offer the quality of larger inventory shipments and more rapid fulfillment of the Wonderful widget shipments that are ordered. The activities of centralized management enable the online marketers of the Wonderful Widgets to maintain the retailing expenses low. In turn the accrual can be conveyed to the final consumers of the wonderful widgets in the form of lower prices (Jaffeux & Weuser, 2013; Waters, 2010).

Less Employee Expense

An organization which applies the centralized management function has the potential of requiring fewer workers. This implies that there would be less need for workers who load and unload the Wonderful Widgets from the transportation systems, the inventory administration staff that keep track of the numbers of Wonderful Widgets on hand and the administrative and security staff. Fewer employees infer a reduced payroll expenses which is the causal attribute of increased savings to the consumer.  Considering that less inventory managers are required to be contracted, the outcome is that each inventory manager may command a higher salary and less inventory managers are required (Jaffeux & Weuser, 2013; Waters, 2010).

Simplified Inventory Administration

The application of centralized management causes the inventory administration of the Wonderful Widgets to become more manageable. The clients will be aware of the shipment times of the orders. The maintenance of organization wide inventory causes the tracking of the orders to become simplified. There is the need to compose only one inventory report as opposed to multiple inventory reports for decentralized management. This characteristic diminishes the potential of inventory error.  In addition, novel inventory administration policies will be able to be applied without the administration of endeavors at the multiple storage centers which are located in the Wonderful Widgets supply chain (Jaffeux & Weuser, 2013; Waters, 2010).

Potential Disadvantages

Centralized management is administrative option which can be applied by the suppliers which locate the inventory in closer proximity to the clients. The centralized management centers enable the inventory managers with greater control on the particular distribution needs or local market conditions which are not applicable in other situations. These market conditions may include inclement weather (Jaffeux & Weuser, 2013; Waters, 2010).

Conclusion

The option of centralized management was chosen in order to facilitate the flow of data between the various facilities. The decisions are implemented in the Wonderful Widget’s supply chain by the application of partnerships and alliances. Wonderful Widgets will save money by applying centralized management. The savings can be conveyed to the consumers.

References

Jaffeux, C. & Weiser, P. (2013). Essentials of logistics and management (3^rd edition). Lausanne: EPFL Press.

Waters, D. (2010). Global logistics: New directions in supply chain management. London: Kogan Page, Ltd.