Grill Rite is an old-line company that started out making wooden

Subject: Business    / Management    

Question

Case:

Grill Rite, page 611
Write case analysis. Four points for case analysis:

1. Problem definition (keep short, 1 to 2 sentences)

2. Analysis

3. Alternatives (minimum of 3)

4. Recommendation (solves problem, specific and actionable)

Assignment is due before class.

Note: Please limit to < 2 pages
Grill Rite is an old-line company that started out making wooden
matches. As that business waned, the company entered the electric
barbecue grill market, with five models of grills it sells nationally.
For many years the company maintained a single warehouse
from which it supplied its distributors.
The plant where the company produces barbecue sets is located
in a small town, and many workers have been with the company
for many years. During the transition from wooden matches
to barbecue grills, many employees gave up their weekends to
help with changing over the plant and learning the new skills they
would need, without pay. In fact, Mac Wilson, the company president,
can reel off a string of such instances of worker loyalty. He
has vowed to never layoff any workers, and to maintain a full employment,
steady rate of output. “Yes, I know demand for these babies
(barbecue grills) is seasonal, but the inventory boys will just
have to deal with it. On an annual basis, our output matches sales.”
Inventory is handled by a system of four warehouses. There is
a central warehouse located near the plant that supplies some
customers directly, and the three regional warehouses.
The vice president for sales, Julie Berry, is becoming increasingly
frustrated with the inventory system that she says “is antiquated
and unresponsive.” She points to increasing complaints
from regional sales managers about poor customer service, saying
customer orders go unfilled or are late, apparently due to shortages
at the regional warehouse. Regional warehouse managers,
stung by complaints from sales managers, have responded by increasing
their order sizes from the main warehouse, and maintaining
larger amounts of safety stock. This has resulted in increased
inventory holding costs, but it hasn’t eliminated the problem. Complaints
are still coming in from sales people about shortages and
lost sales. According to managers of the regional warehouses,
their orders to the main warehouse aren’t being shipped, or when
they are, they are smaller quantities than requested. The manager
of the main warehouse, Jimmy Joe (“JJ”) Sorely, says his policy is
to give preference to “filling direct orders from actual customers,
rather than warehouse orders that might simply reflect warehouses
trying to replenish their safety stock. And besides, I never
know when I’ll get hit with an order from one of the regional warehouses.
I guess they think we’ve got an unlimited supply.” Then he
adds, “I thought when we added the warehouses, we could just
divide our inventory among the warehouses, and everything would
be okay.”
When informed of the “actual customers” remark, a regional
warehouse manager exclaimed, “We’re their biggest customer!”
Julie Berry also mentioned that on more than one occasion she
has found that items that were out of stock at one regional warehouse
were in ample supply in at least one other regional warehouse.
Take the position of a consultant called in by president Mac
Wilson. What recommendations can you make to alleviate the
problems the company is encountering?