Summary of Woodsynergy Inc Case
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Summary of WoodSynergy Inc Case:
The case provides an interesting description of the so-far successful implementation of an IT environment in WoodSynergy Inc company and how the CIO executes a phased strategy to integrate the suppliers and distributors-customers side of the supply chain using Information Technology.
The CIO of WoodSynergy plans on a two phased approach of integrating the supply chain entities through IT. He built a project team which referenced the standard best practices of SCOR – Supply Chain Operations Research – to come up with best-in-class performance measures and identified and prioritized improvement opportunities. By deciding on the “Remediation” strategy, which involves working closely with existing middlemen in the supply chain for more transparent data and information sharing, the CIO and his project team built a gateway prototype aimed at data synchronization and real-time interface. This constituted Phase – I of the IT integration and took nearly 5 months of effort to put the gateway in action.
While the cost of implementing this gateway was approximately $400,000, the benefits derived were quite satisfactory. A feedback survey on the gateway
among the Regional Distribution Managers (RDMs) indicated the following positive results:
90% of RDMs were satisfied with the gateway and 85% of the RDMs experienced productivity gains over the 3 months post its implementation
Efficiency of RDMs was increased by reducing time required to prepare an order and demand information by 15%
Improved communication processes by optimizing information flow to RDMs
Enhanced access to company information with faster access speeds and simplified navigation to information and applications
Most importantly, WoodSynergy recognized a cost saving of $1.5 million through a more efficient use of employee and IT resources.
To continue with this successful SCM integration process, the CIO now plans to take up Phase-II of the project where the integrity and timeliness of the overall reporting system will be improved and integration of suppliers and distributors into WoodSynergys supply chain will be finalized. Phase-II of the project would take about 9 months with an estimated labour cost of $150,000 per month and an additional system cost of nearly $ 500,000.
With phase-II implemented, the CIO hopes that the enhanced supplier-distributor integration would increase revenue and profit growth by having access to new process innovations and accelerating time-to-market cycles. On the supplier side, a seamless integration would assist in exchange of BOMs and component performance data. Certain key metrics of performance improvement such as processing accuracy, upside flexibility,