Lambert-Martin operations are decentralized and each Group runs its own affairs. From the details of the case, one of the most apparent issues is the high cost of production. It is revealed that the cost of sales amount to just over 80% of the total revenue generated. In economic terms, this is too small and a lot needs to be done to reduce these costs. With a decentralized system, it is difficult to control individual costs and the new chief purchasing officer (CPO) Arthur Thomas should propose adoption of a centralized system. On a different note, the practice of holding dual roles by a top manager as seen with the Jeff Trudell and Arthur Thomas cases is detrimental for operations.
During the meeting with group vice presidents, there are …show more content…
For optimization of focus, top managers should be allowed to hold a single docket especially if the duties and responsibilities are many. The current status of the supply chain is hurting the company as a whole because with separate reporting from each group, it is difficult to keep track of costs. More so, there is a tendency of a decentralized system to lose focus of the general direction of the company because attention will be fully on departmental targets. On his research on industrial trends, Arthur stumbled upon a document that indicated that large organizations were moving away from a decentralized system. In many ways, this shift was caused by the realization that a decentralized system has many challenges that can be resolved by centralizing certain components such as administration, procurement and manufacturing. In the case of Lambert-Martin, a centralized system would ease the burden of the numerous cost centers and a massive organizational structure. Close to 70% of mid-sized and large organizations maintain a hybrid system while 20% have a fully centralized …show more content…
Upon reviewing the pertinent issues at Lambert-Martin, there are two huge adjustments that the company should adopt in order to save its growth and operations. By centralizing supply chain operations, the company would accrue benefits that range from scale economies to standardization of procurement procedures. It is also recommended that the company rethinks its organizational structure by shelving off replicated duties such as vice presidents of procurement under each group. Adoption of these two recommendations would help Lambert-Martin realize an increase in profits as proposed by Bill Mclaren, the current
During the meeting with group vice presidents, there are …show more content…
For optimization of focus, top managers should be allowed to hold a single docket especially if the duties and responsibilities are many. The current status of the supply chain is hurting the company as a whole because with separate reporting from each group, it is difficult to keep track of costs. More so, there is a tendency of a decentralized system to lose focus of the general direction of the company because attention will be fully on departmental targets. On his research on industrial trends, Arthur stumbled upon a document that indicated that large organizations were moving away from a decentralized system. In many ways, this shift was caused by the realization that a decentralized system has many challenges that can be resolved by centralizing certain components such as administration, procurement and manufacturing. In the case of Lambert-Martin, a centralized system would ease the burden of the numerous cost centers and a massive organizational structure. Close to 70% of mid-sized and large organizations maintain a hybrid system while 20% have a fully centralized …show more content…
Upon reviewing the pertinent issues at Lambert-Martin, there are two huge adjustments that the company should adopt in order to save its growth and operations. By centralizing supply chain operations, the company would accrue benefits that range from scale economies to standardization of procurement procedures. It is also recommended that the company rethinks its organizational structure by shelving off replicated duties such as vice presidents of procurement under each group. Adoption of these two recommendations would help Lambert-Martin realize an increase in profits as proposed by Bill Mclaren, the current