Woodson's Problem

Woodson's problem is that their customers are dissatisfied with their customer service. It

has been growing for a long time due inadequate effort to maintain customer satisfaction. There

are many other causes as well, but here are a few: First of all, their distribution network is too

large and complex.

A great concern to Woodson's management has been the cost of distribution. There are

22 manufacturing locations, only five distribution centers, who then distribute to 325 stocking

points. There is too much workload for so few distribution centers. This has led to overcapacity

making managing very difficult. "Recent evidence shows that improving the quality of customer

service is a key to achieving a competitive advantage; a good "product" is necessary, but not

sufficient to compete in today's marketplace. As a direct result, organizations are actively

cultivating customer service as a valuable asset in strategically differentiating their products and

services" (Domegan, 52). This is exactly what has happened with Woodson. With the

company's diversification of products into specialty chemicals, the need for a higher, more

specialized level of customer service has increased, but Woodson hasn't seemed to make

adjustments for this change. They have accumulated more demand by catering to specialty

product users, but haven't made the necessary adjustments to their network, logistics, or, for this

case, customer service the overall problem from combination of all these issues.

A large cause for the problem is the fact that all three divisions have been, and even after

some improvement, still are, maintaining their own functional support. With each division

having their own separate functions, it's very likely that all three are not functioning the same

way. Not to mention, the money that's being lost in filling the positions for all three divisions,

when Woodson could have one central one to manage all three, and would have one standard

way of functions and procedures. And, according to the cost and expense areas of the network,

Woodson can't afford any other increasing costs, when their costs to manufacture are being

outweighed by expenses in excess of sales.

Woodson has shown a considerable problem with managing finished goods inventory.

With a timeline, Woodson will be able to establish and manage finished goods effectively. The

necessary timeline will provide the needed customer service that Woodson doesn't currently

have. With establishing a more precise logistic approach, Woodson reduces the difficulties

involved with the complexity of distribution networks.

To complicate matters; roughly one third of Woodson's businesses are conducted abroad.

To be able to manage such a broad scope of distribution, Woodson must implement a logistics

approach that reduces the overhead cost by utilizing a smart and efficient technological model,

which gives value to time and storage areas. Manufactured goods should be managed effectively

so Woodson doesn't have complications with wrong deliveries, wrong packaging, misplaced

locations, and time for sorting. It gives Woodson a good margin and makes their business much

more profitable and observable.

Since the major problem affecting Woodson is in the area of customer service it is time to

re-think everything about it. This starts with the customer service leadership.

Start by firing Director of Customer Service Barry McDonald. The problems have not

improved under his leadership; it appears that the problem has perhaps been exacerbated. After

all, Trent says "that the first step toward supply chain excellence is having the right people with

the right skills" (7). His position would be better served by a new director, preferably one with

experience in customer quality management and a better understanding of Information

technology. A new director can come into this position without preconceived notions of the

company and the company's current stand on customer service. He would not likely need to be

retrained in the more modern methods of quality and customer service, both technologically and

logistically.

The new head of customer service would need the support of a good infrastructure. The

customer support functions need to be connected to the information streams passing between all

divisions and departments of the company. It is also important for the customer service

department to have up-to-the-moment information provided by suppliers and inventory control

as well as shipping and other procurement. The movement of information is key, Lalonde and

Zinzser state, "Without good control of information flow within the firm and between the firm

and customers, the customer service function is usually relegated to reporting performance level