Reference no: EM133402447

Case Study

Global Engineers is a decade old engineering organization engaged primarily in the manufacturing of switchgears of various ranges.

Its manufacturing unit is situated in Delhi but its sales are spread all over the country. Apart from Global Engineers, there are two other fierce competitors in the switchgear market who, between them, have captured 75% of the market share. During the initial years of manufacturing, Global Engineers concentrated in the northern region. After that, it has moved towards selling its products in the entire country. For this, Global Engineers required an efficient logistical distribution system. It has established hub warehouses at strategic geographical locations, but the problem of inadequate space and/or stock outs continue to pose a serious problem. The company is contemplating on outsourcing its distribution.

As regards transport, at present the company has its own fleet of transport. But delivery schedules get affected due to various reasons. One of them is absenteeism among the staff. The second is that many times trucks have to leave without adequate stocks due to various problems in production schedules. On return journey, the trucks are empty. The drivers delay in returning giving various excuses for the same. Because of its low share in the market, the pricing policy of the company has always been to charge lower than its competitors.

Discounts offered are flexible. Many times the company deals directly with the customers because they can offer better pricing terms and know the customers' requirements first-hand. On the other hand, competitors strategy has been to maintain high quality because they feel that the customers will not hesitate to pay a little more if they are assured of a product have better performance and efficiency.

For better sales and service, the company has appointed dealers in the various regions of the country. The dealers not only sell the goods manufactured by the company, but also those manufactured by the competitors. The dealers sell various other engineering products as well. There has been a general complaint among the customers of Global Engineers that the after-sales service provided by the dealers is not satisfactory. The company, on receiving such complaints, sends letters to the dealers to improve their services.

Beyond that, nothing is done.

The dealers of the company have got together to list their problems. They have stated that they want a higher rate of commission in comparison with that offered by the competitors. Secondly, they want the company to improve upon the quality of the product which will reduce the complaints by the customers. Thirdly, they want engineers from the company to visit them at regular intervals so that the dealers can apprise them directly about the requirements of the customers. Fourthly, the dealers want an efficient transport system to ensure timely delivery of the products and spares.

Questions

1. Explain your views regarding establishing of an efficient distribution network for the company. You have to envisage all possible alternatives.

2. What improvements do you suggest for improving the performance on the inbound and manufacturing cycles?

3. Discuss the various steps the company should take to win back the confidence of its customers.

4. Critically examine the dealers' suggestion that the company must send its engineers to their service centres at regular intervals.