Case Study: A Pain In The Supply Chain
Key Players
• R. Foley Vinton, CEO Exceso
• Andrea Valdini, analyst
• Martin Wu, Head of Sales
• Alice Dias, Midwest Regional Manager Flemings ValuMart
• Wendell, intern from business school
• Fred, manager of sales
Summary
Exceso is a manufacturer of gizmos with ClickZipPlus as the flagship of the company.
Internal Factors:
• Their Objective Control System (set by CEO Foley) fosters unrealistic sales goals of 9% sales growth per year which was based on raw data which is causing a stress on not only the sales team, but is overloading the manufacturing division as well.
• Foley, the CEO, has a bad habit of withholding necessary information from analysts who then relay this to shareholders.
• Machines running at 60% optimal speed with many unexplained breakdowns.
• The sales team only believes that they are capable of a 3% sales growth due to the machine breakdowns.
External Factors:
• Competitors, like Carlex, are catching to ClickZipPlus in sales by offering a similar product with comparable quality at a lower price.
Outcome
• Because of these internal and external factors, the sales team is forced to give deep discounts to their clients in order to reach unrealistic sales goals. This then gives retail stores the opportunity to resale Exceso’s products for their personal profit, benefiting only them and not Exceso.
• These deep discounts are being given in hopes to load up the distribution channels.
• Working within the framework of an Objective Control System puts too much focus on things like share price and sales goals, without consideration of such factors as employee satisfaction.
Solution
• Paying more attention to manufacturing aspect of Exceso as oppose to promotions
Questions:
• Should Exceso continue using the tactic of loading up the distribution channels to meet their high sales...
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