Question

Case Westminster Company Company Profile Westminster Company is one of the world's largest manufacturers of consumer health products. Their distinctive name and company logo are recognized throughout the world. Originally founded as a family-owned pharmaceutical supply business in 1923, the company has expanded, by virtue of aggressive new product development, into a global vider of health care consumer products. Westminster maintains regional offices in Europe, Latin America and the Pacific Rim to support overseas manufacturing and distribution Westminster's domestic operations consist of three separate but wholly owned compa- nies that each manufactures and distributes unique product lines. Decentralized manage- ment has been a proud historical tradition at Westminster. According to President Jonathan Beamer, the policy of maintaining unique and independent companies encourages respon- sibility, self-ownership of the product development and marketing process and provides the incentive for entrepreneurial management. Westminster's products are marketed through a network of diverse retailers and wholesalers. Trade class as a percent of sales is 37 percent grocery, 20 percent drug, 35 percent mass merchandise and 8 percent miscellaneous. three companies sell and distribute products to several of the same customers. Westminster Today Pressure from domestic and global competitors, as well as large domestic Westmi customers has recently forced the company to reevaluate their traditional supply chain practices. In particular, attention has focused on the changes that customers are demanding well as other operational modifications in current practice that management feels are required to effectively compete in the 21st century marketplace. Westminster just completed several months of extensive study focusing on their cus- tomers' current and future supply chain requirements. The findings addressed a variety of issues, but two key topics were identified: (1) customer composition; and (2) customer service requirements. The most significant trend with regard to customer composition over the past decade has been the growth of key customers into very large accounts. Mass merchants now account for 35 percent of total corporate sales volume and have become the fastest grow ing category of trade. All three companies sell to this category of trade. This trend is expect not expected, however, to dramatically alter the historical composition of product sales. Approximately 70 percent of domestic consumer sales volume is concentrated with 10 percent of Westminster's customers. What may affect the composition of product sales large retail accounts, however, is the rapid growth of private-label nonprescription drugs and consumer health competitors. Cost-efficient private-label manufacturers offer large retail accounts higher profit margins, and willingness to provide private labeled products. The private-label health and beauty aids business sales exceeded $5 billion in 2008. ed to continue into the foreseeable future. The major shift in the mix of accounts is The second research conclusion confirmed senior management's belief that th large accounts have an increasing commitment to improved supply chain efficiency. To maintain and increase the percentage of sales volume Westminster generates from these important customer accounts, management has identified several key customer service improvements. These improvements specifically address the second issue of customer

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