Atlas Tire and Rubber Company 1) What were Atlas’ major challenges prior to the promotion of Walter Harrison as CEO? The main challenges faced by Atlas’ were competitive and financial challenges. As for the first time from 1905 the company was facing losses for consecutive 2 years in row as the company was facing a severe downturn. This was all because of the new challenges, which the company was facing due to their growth and expansion policies
The company was also facing the competitive challenges from the low prices import products which were affecting their price strategy resulting in low profits, heavy slump in the automotive market in America also pulled back Atlas to regain its flagship. Due to all these the stock prices dropped down to 20 years low resulting in cutting down of credit rating to junk – bond status. So during this declining phase, the company needs some major transformational changes so that Atlas can regain its position and pride back. 2) Why did Harrison focus on an integrated supply chain as a significant element of Atlas’ new strategic plan?
As Harrison and his team found that Atlas lacked integrated supply chain capabilities due to which disjointed distribution network was there and various third – partly logistic companies were used which lead to many problems and challenges. And logistics was only considered as a storage and distribution function rather than a strategic supply chain process. As Harrison came out with a strategic plan “ Seven Principle of Growth” for turning around the Atlas’s fate. Harrison special focused on a superior and integrated supply chain.
He focused on Integrated Supply Chain because he strongly feels that this would streamline the order and its fulfillment process so that they can be more accurate and easy to use because of their simplicity. The main focus was to deliver “the right tire to the right place at the right time while keeping costs and inventories low. ” Harrison wants to create an extra edge over the other tire manufacturers by creating the much better service capabilities. 3) What did the UST President, Michael Brogran, do to better understand customer needs? UST business defines Atlas’ s U. S.
Tire business, which has the worth of producing, and selling 100 million tires per year and was generating approximately 50 percent of Atlas Revenue. Michael Brogran strongly feels that the superior supply chain was a vision that existed only on paper so he just made a team to understand customer needs in a better way. The main step the team had taken was to work across customer verticals, which were Consumer tires, Commercial Tires and Off Highway Tires. This structure help Atlas to better understand the customer needs in different segment and to meet them in different ways as needs were also different.
As the part of this new alignment to understand consumers needs better Brogran facilitates cross company collaboration to identify interactions and collaboration and to share the best practices so that every department can better understand their customer needs for better visibility and control. 4) How did USTSC address the talent gap that they had in the organization? U. S. Tire Supply chain organization’s main objective was to integrate the planning and functional operations which included the responsibilities of contact centers, order management, pricing administration, distribution and delivery, billing and accounts receivable.
USTSC was structured so that Atlas can understand & meet the needs of its customers that are classified under various segments likes consumer, commercial and off highway tires. The key goals of USTSC were – Lower the supply chain costs, – Boosting the customer services, – Improvement in the inventory management and associated working capital, – Simplifying the supply chain processes & management of the business. Initially USTSC came across major challenge with regards to talent gap.
Reduction in headcount from several years impacted the internal supply chain analytical and execution capabilities. Moreover with five different 3PL (third party logistics) the focus was emphasized in managing the suppliers rather than the operations. After a thorough evaluation USTSC concluded that SCM (Supply Chain Management) was never a core competency of Atlas. In order to bridge the gap USTSC obtained assistance from organization that had expertise in planning and managing the complex supply chains.
The synergy of these organizations was mutually beneficial to all the parties. Collaboration in supply chain planning, process development and service execution fetched superior results. Due to this synergy Atlas was able to leverage the expertise of Global’s supply chain & Global was in a position to gain a broader insight of Atlas’s requirements and supply chain capabilities. USTSC experienced a synergistic effect because of the Atlas-Global team and experienced more effective customer-supplier 3PL working model. Thus the talent gap was bridged by USTSC . Comment on the effectiveness of Atlas’ efforts to improve team-based strategic collaboration ? With the synergy of Global and Atlas, Atlas was in a position to leverage the expertise of Global’s supply chain & Global was able to derive a broader insight of Atlas’s requirements and supply chain capabilities. Alas-Global USTSC was able to develop team-focused, strategy-driven relationships that were unique in the 3PL industry. The organizations consistently maintained an active & effective coordinated participation across the supply chain sphere.
Interactive teams from the three organizations facilitated the planning, developed and executed the key supply chain activities in order to achieve superior supply chain. The collaboration in team was very effective and was result oriented. The SCM team and the steering committee used to do brainstorming sessions to figure out new supply chain initiatives & at the other end the operations team and the SCM team evaluated and ensured the potential projects that could be implemented effectively and are favorable.
The relationship building between the organizations was effective and there was a strong executive support from the top management. The organizations attained mutual benefits and they experienced more effective customer-supplier 3PL working model. There was effective synchronization in the strategies with regards to process design and execution. Allocation of resources was well planned and the responsibilities were well defined. More focused on the opportunities available. The integration of the team performance was able to create superior supply chain capabilities within the industry. . As O’Brien, what strategies would you recommend to Atlas to: A) Gain greater control over inventory; B) Optimize the flow of products in the supply chain. In order to gain control over inventory & to optimize the flow of products in supply chain: Implementing a centralized system within the 33 company owned regional distribution centers so that the information regarding supply chain, any innovations and critical information are accessible to everyone at one single point of time.
Effective integration of the 4 third party logistics providers’ services would generate superior results. Forecasting should be done collaboratively by the Atlas sales group and manufacturing group in order to arrive at accurate estimates. Implementation of the ERP system like SAP would make it easy to figure out inventory analysis.
A centralized system like SAP would also create transparency, easy availability of data, accessible to concerned department in a timely manner, constant flow of information, demand and supply of inventory can be balanced and can avoid instances like stock outs or over inventory carrying costs, more reliable and realistic, helps in decision making process, implementing a centralized approach in the transportation system, a well defined standard service parameter should be set and should get authorized by the compliance, regular audits and inspections should be done in order to check if there are any violations.
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