For a company that is only starting to explore the possibilities that business world opens in front of it, change is a natural and essential process. By evolving into a stronger, more independent and definitely more experienced enterprise, a small company finally establishes itself in the realm of its target market. However, when a company hits its prime, an inevitable crisis comes.
As soon as the once successful strategies overstay their welcome, a company feels that it has to evolve, and, not knowing where to develop further, it gets stuck, therefore, not being able to keep in pace with its numerous and more initiative partners.
The given situation is exactly the case with the Bath King; even though its strategies used to work perfectly, with the changes that its partners have undergone to meet the latest requirements, Bath King has to change its current policies on logistics (Coyle, Langley, Novack, & Gibson, 2013).
In the given situation, several solutions are possible, depending on what Bath King considers its key priorities. On the one hand, it is necessary that the company should maintain relationships with its partners and, therefore, retain its position and revenues. Therefore, the company can possibly take its chances and try upgrading its management system, continuing its partnership with the companies in question.
However, it is worth keeping in mind that the process of improving the entire system, in accordance with which the company is run, will take much time, much effort and even more money. Therefore, it is doubtful that Bath King will be able to both develop its logistics system and continue cooperating with its current partners – the pressure of responsibilities may be too high for Bath King to take.
With that in mind, the solution that the leader of the King Bath has come up with, i.e., spending less on production process by reducing its quality in order to deliver the goods faster and with less damage.
However, the given solution also has its flaws. First and most obvious, reducing the quality mans decreasing the customer satisfaction rates, which is most likely to lead to Bath King losing its clientele. Therefore, the six-facility RDC network can be considered only as a temporary solution, while Bath King is looking for an adequate means to address the problem.
With the increase of order processing and freight costs, it is obvious that the financial concerns seem to be the issued. Therefore, it is necessary to pick the aspect of logistics that the company has the least problems with and cut its budget in order to maintain high quality standards when it comes to product delivery (Lai & Cheng, 2009). In regard to the Bath King policies, the inbound logistics seems to be the safest solution at present.
Indeed, by enhancing the process of receiving and disseminating the products, Bath King could speed up the process of delivery as well, while the aspect of outbound logistics, i.e., the choice of transportation service, the time for delivering the goods, etc., can be improved.
Therefore, it seems that, instead of adopting the RDC system as the basic means of dealing with the emerging issues, the Bath King Company needs to reconsider its inbound logistic, paying special attention to the information management aspect. Once an efficient information management system, such as knowledge sharing, is introduced into the company, Bath King will be able to tackle the current issues efficiently.
Reference List
Coyle, J. J., Langley, C. J., Novack, B. A., & Gibson, C. J. (2013). Supply chain management: A logistics perspective, 9th ed. Stamford, CT: Cengage Learning.
Lai, K.-H., & Cheng, E. T. C. (2009). Just-in-time logistics. Burlington, VT: Gower Publishing, Ltd.