Woodson Chemical Case

Woodson Chemical Case – Ryan Holzinger

        WCC North America is a large, diversified chemical provider of various commodity and specialty products. Upon reviewing the case study, it became very apparent that WCC is facing several significant issues which are negatively impacting operations (customer service performance being a critical item).  

        As WCC NAA operations has grown and expanded, they have experienced increased separation across management oversight across the three divisions of the coporation, also witnessing an increase in communication bottlenecks throughout the entire Supply Chain, which has been a major item called out in the customer service reports and feedback from customers. WCC is also realizing flat, or in some cases, declining sales revenue, though industry reports indicate that profit improvements are attainable in various product divisions.  In terms of the Hydrocarbons and Energy division, WCC is extremely vulnerable by maintaining their current business model due to industry overcapacity currently observed, and the addition of new capacity coming online in other geographical regions.  Finally, high costs of distribution, marketing, and from what I observe, year over year increases in SARD costs are only exacerbating the issues faced by Woodson Chemical US.  

        To address these issues, I would look to integrate business service operations across the three divisions of WCC NAA.  Reviewing the organization chart, obvious redundancies exist in areas of logistics and administrative functions.  By managing areas such as transportation and warehousing individually rather than utilizing a leveraged modal across their North American operations, they are failing to take advantage of leveraging better freight rates, consolidation of warehouse locations, and reduction of resource costs by streamlining these service lines across all three divisions.  Similar opportunities exist within Information Systems, Finance, and accounting.  Being that the primary issue facing WCC in terms of customer feedback is dissatisfaction with real time order information, it is imperative that a focused effort take place related to the company’s information technology, and ensuring that technology is consistent across all divisions rather than acting in individual silos.  

        Another opportunity would be for WCC to focus on key, strategic customers and work closely through their commercial organization to clearly understand they top priorities for those customers in terms of areas of success for WCC.  By creating some strategic “partnerships”, there would potentially be an opportunity to share in the costs associated with implementing key IT technologies, which would benefit both WCC and the customer.  

Risks and Benefits associated with my proposed improvements

WCC Distribution:  Risks include high cost of initial implementation and extensive change management required within the organization to ensure employee acceptance of the new structure, especially given a potential in headcount reduction by leveraging services across divisions.  Another risk is failure of customers to recognize the improvements and buy-in to the new IT technologies.  Benefits include a lower cost structure across the enter organization due to the following:

• Lower labor costs by streamlining leveraged Supply Chain operations across all divisions
• Improved communications and management synergies across the three divisions
• Consistent work process approaches in various functions including Logistics, Information Technology, Accounting, and Finance.  Customer service is a critical area where leveraging the model across all divisions could do more harm than good.  They are the front line contacts with customers and need to be directly linked to the businesses they support, thus keeping customer service as a “business aligned” service is critical to success.

WCC Customers:  A major risk to customers is failure of implementation success.  This would be detrimental to the trust customers would have in WCC’s ability to meet expectations.  The benefit though if successful is a significant improvement in customer happiness as well visibility to order status all the way through the supply chain.