GROUP ASSIGNMENT

Change Management Role Play

Subject: SCM201
Lecturer: Trinh Thi Chung
Class: IB1605
Group 2: Nguyen Kim Anh
Nguyen Anh Quan
Pham Van Son
Le Van Manh
Le Thi Trang
Nguyen Huong Giang

Summer 2022 - 15 July 2022

 Table of contents

I. Introduction…………………………………………………………….. 2

II. Summary on Logistics Issues for Upcoming Management Meeting....2

III. CEO Role Brief Note……………………………………………………4

IV. CEO’s agreed Action Plan……………………………………...………4

1. Logistics………………………………………………..………………4
2. IT….………………………………………….………..………………5
3. Marketing and Sales…………………………………….…………....6
4. Finance………………………………………..……………………….6
5. Summary………………………………………………………………7

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 I. Introduction:
Worldwide Widgets Limited (WWL I is an Australian-owned supplier of a range of
items primarily used by 'Level l' auto parts suppliers in the assembly of air conditioning
and brake systems. The company is 75 years old and 80% of the company has recently
been floated, leaving only 20% of the issued capital in the hands of the founders, the Smith
Family. The CEO is the founder's only grandchild. the company, Sir Frederick Smith
(OBE), whose CEO is widely recognized for driving the company public in 1999,
considers fundraising essential in creating a global instrument. Since taking control of
WWL, the CEO has actively pursued expansion goals through a strategy of closely linking
the business to global companies, supplying directly to manufacturers. Increasingly, these
alliances are enabling WWL to conclude global contracts with key customers, which have
been a key factor behind the 30% compounded growth in the past year. ng revenue for the
past 3 years, reaching $650 million P.A. The average gross profit margin is 19%, equal to
80% of the Company's gross profit from customers 'Tier l'.• Strategy: aligning the business
closely with global companies

- Overall strategy of the company: aligning the business closely with global companies
- In company activities:
+ In the short term: focus on business growth and reach Current key customers in
the Asian market.
+ In the medium term: access to foreign production capabilities of the finished
product.
- In the process of operation, the company has gained a number of advantages and
disadvantages

II. Summary on Logistics Issues for Upcoming Management Meeting.

● Relocation NDC to a new site for expansion and productivity increase:
The logistics manager of WWL has paid attention to overseeing the replacement of
the NDC to a new “green fields” 25,000sq.m site in Wetherill Park, west of Sydney. They
had well prepared for relocation plan. About infrastructure, a new facility was measured
to adjust significant expansion. When the site was constructed, more floor space was made
available to allow for the redesign of workflows to make simpler, more effective order
processing and deliver significant productivity enhancement.

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● Human resource and methodology:
About human resource and methodology, 60 employees work in the new facility by
conventional pick & pack procedure. The conveyor system that has operated for 15 years
was moved from the previous facility in Strathfield, NSW, which supplied the internal
WWL manufacturing function. To take advantage of the new facility’s structure, the
conveyor system was intended to improve with in-line scanners and zone-skipping to
exploit the layout of the facility.

● The difficulties:
However, an internal problem existed that logistics was not focused at this time, the
plans for this conveyor system upgrading were rejected. All budgets have invested in
implementation of the PAS software package to overcome the Y2K hurdle and prepare
WWL for worldwide expansion.
The relocation to the NDC is now being revealed that expected enhancements in
productivity have not become visible and many risks. Orders from small engineering
customers come to overtime. A large 'Tier l' customers have threatened to withdraw their
business if orders were unable to deliver in less than 3 days for a period of 4-5 weeks. “Out
of stock” meant that some orders from the main customer, Blush, could not be fulfilled.
Even though these orders are for products supplied specifically for Blush and order
quantities in line with forecasts received 4 months ago from that customer. These external
problems significantly affect the company.

● Business performance.
From that, the Board sees the serious unaccountable losses erased 3% from the value
of book stock and they have not yet received the latest financial reports. These losses will
result in the firm reporting a lower-than- expected profit for the past 6 months. Since going
public, the firm has fallen short of market expectations.

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III. CEO Role Briefing Note:
We will make WWL a global and market leader.
At the board meeting we will present the financial results for the last half year where
there was a decrease in EBIT compared to last year. We found that the extraordinarily high
write off from the last stock take is a major factor in this result.

We will be improving productivity at NDC, which will enable fast, planned growth to
be largely accommodated within the existing cost structure. EBIT as a percentage of sales
is therefore expected to increase as the company moves into new markets.

We are concerned about how the company will serve new international markets given
the recent substandard domestic distribution performance. The company's IT
infrastructures do not match the needs of a globally distributed company. We are planning
to outsource the distribution function to a partner that already has a global distribution
system. This will allow the IT and Logistics team to focus on Inventory Planning, rather
than implementing IT for distribution or warehousing.

IV. CEO’s agreed Action Plan

1. Logistics:
The company plans to expand its production scale and build a new factory. The
logistics department has not focused on upgrading with the rather old machinery system
with the used time of 15 years, the production capacity does not meet the orders. The peak
is that there are customers who have placed orders for 4 months but have not received the
goods. That makes customers unhappy and risks leading to loss of orders and revenue for
the company.

Some other problems like:

- Inventory Planning
+ No EDI with suppliers for either purchase orders or advanced shipment
notifications
+ Forecasting is not integrated with replenishment buying.
+ No easy way of overriding system-generated forecasts.
- Warehousing Functions:
+ No support for radio frequency devices in the warehouse.

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 + No dynamic task management for each unit of work (e.g. system-assigned
priorities for each pick task, each putaway task, etc.
- Transport
+ No load planning to optimize vehicle utilization.
+ No transport route planning.

So the solution to this problem is that the IT vs Logistic Department meets to plan to
upgrade and buy a new production system line to replace the old one. At the same time,
the finance and logistics departments make a financial plan and submit it to the board of
directors for review and approval of the plan. In order not to affect the production
schedule, the logistics department immediately implemented this plan

2. IT:
At the meeting, issues about the bad impact of the old management system and the
accuracy of the current inventory were resolved, but continued to maintain and promote
the company's e-commerce vision strategy.
The role of IT in supply chain management or SCM is crucial. IT provides tools,
utilities, can collect relevant information, break it down for proper analysis and execute it
for optimal performance of supply chain.
The company is currently having some problems with the old management system and
the internet system and has adversely affected the financial system of the company.
Therefore, the company should apply alternative solutions and update new technology
in operating system management.
Upgrade the internet network system, promote information exchange and ensure
stable operation of related departments.
Regularly search and build foundations and solutions for the management process in
order to reduce risks and save costs.
Objectives Build an e-commerce platform in the process of penetrating foreign
markets because today e-commerce is growing strongly and has more advantages than
traditional business.
Applying barcode and scanning technology in logistics management helps to improve
time and optimize productivity during operations.

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3. Marketing and sales:
● Marketing and Sales department has experienced two main problems.
- The first is a delay in WWL's delivery to the Stutter production facility and is
scheduled to be raised. At the upcoming management meeting, we must address
concerns about subpar distribution performance because Stutter accounts for 5% of
WWL's sales.
- Second, The PAS system only gives you a small amount of capability, and
adding more features would be expensive.

● Solutions:
To concentrate on the requirements of our organization, we must collaborate with the
IT division. In order for the director of that side to concentrate on his work and
demonstrate to his staff that their superiors are also working hard, I believe we need to
create a supplementary list of logictis management issues.
Challenge the Logistics Director's proposed Supply Chain Action Plan at the meeting
and counter any attempts by the executive to downgrade your priorities for developing new
reports. and when the work is done the Company should reward both groups when the
activity yields a positive result so that they can understand the value of cooperation.
During the meeting, we need to give ideas and formulas for Logictis directors to help
them complete well and need to give benefits to them so that it is difficult for the CEO side
to lower the opinions of Logictis side. Marketing and sales managers coordinate with the
logistics department to come up with the most harmonious solutions to avoid conflicts and
problems that slow down the company's activities.Additionally, once the task is completed
and a win has been achieved, the company should provide both groups a prize so they can
appreciate the worth of working together.

4. Finance:
There are 2 main issues related to the finance department in WWL, specifically as
follows:
- First, regarding the PAS system, which served to overcome the Y2K hurdle and
prepare WWL for global expansion, offers significantly improved controls for the
Company. Nevertheless, there were some rumblings about "bad data' following the
cutover. Financial manager had a team of accountants working for months to fix the

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problem and it leads to the blowouts in the IT project costs. In addition, the software
vendor has reported that the next release is running 4 months late, which puts signigicantly
negative effect on financial activities.
Solution: The procedural changes that financial manager pursuit cannot be verified the
next release of PAS software. So if it is running 4 months late, financial manager is likel to
encouter great risk. That’s the reason why he/she should find solutions to this issue. We
recommend that financial manager suggest IT manager to recruit an extra programmer to
custom-develop an interim cycle counting system.
In addition, Financial manager should pay attention to the cost of the IT project in
order to prevent it from rising too high.

- Second, inspite of the strong sales, the financial performance results of the company
for the last half experienced a fall in EBIT (Earnings Before Interest and Tax) compared
with last year. This problem results from that the extraordinarily high write off from the
last stock.
Solution: The high write off may partly result from weak controls in the old system.
Finance manager is required to work with Logistic Manager to discuss this problem, with
an aim to upgrading the logistic systems. There are also issues relating materials handling
procedures, so we need external auditors to evaluate, analysis and present in our meeting
so that the information is accessible to CEO and all managers. Financial manager should
also consider some measures to deal with stock take and create a financial plan for higher
EBIT.

5. Summary:
In general, our problem primarily results from the old system and the fact that it has
not been really focused on to be upgraded. This seriously affects our performance in recent
years. Therefore it is essential that a new PAS system should be implemented to fix all
issues our company encounters. To do that, we need the cooperation of all the department,
specifically four managers: Logistics, IT, Marketing and Sales, Finance. The most primary
position is Logistics Managers, but we hope other manager can work together to come up
with measurement that helps WWL overcome those issues.