Financial Analysis: Hershey Corp. & Tootsie Roll Industries

The Baker case presents a real-life scenario of a company that has had a great history and a strong reputation. As a plumbing parts manufacturer and distributor, the Baker Corp. has created a large cliental and an army of loyal customers. Customer retention is not a problem, most of the clients are repeat customer and whom continue to refer the Baker Corps new customers.

However, the problem seems to be within the company's internal policies and procedures. The lack of business policies and procedures has the company, working as several small companies instead of one corporation. Overall control and accountability has been lost, which has made forecasting a big problem. The direction of the company is looks well from a distance, which has kept the stakeholders interested in the Baker Corp. However, the robust company has forced itself into a corner and cannot continue to grow without complete accountability and control. The Baker Corp. needs accountability and control measures taken now, in order to maintain rapid growth and accurate measures for future forecasting.

Currently, all ten-distribution centers are warehousing an idle inventory worth $100,000 at each site, which is one in idle inventory for the Baker Corp.. The logistics of the Baker Corporation has had past problem from the past, which were never corrected and accounted for. Orders are constantly being damaged and misplace, which is costly the company loss revenues. However the main problem seems to narrowed down to the ordering system or lack there of. The number of errors from misplace orders, should concern and the need to work on training and an organized center for taking calls. The call center proposal could benefit the company and the report will simply outline the fundamental requirements of collaborative commerce and highlight the benefits of having a call center located in Phoenix, AZ.

The call center is financially feasible to establish, because it creates a great opportunity to restructure the current ordering and delivery process into one system that will streamline organizational process. The Baker feasibility analysis spreadsheet displays a clear example of the payback period over 10 years of the proposed call center. It shows how having a call center, a central ordering point will create a tracking system and enable the company to save $50,000,000.00 over the next ten years. Even though, this amount could be even greater if the company decided to outsource the call center. However, to implement a new system and a new organization culture, outsourcing would lead to more confusion and less control. Since, the call center will be our main center for taking orders, it is imperative that the staff be loyal work who are committed to the success of the company. The benefits of having a call center in Phoenix, Az. will enable the company to take advantage the great infrastructure and professional staff. The spreadsheet provided displays how the start-up cost for the call center will be recovered in five years of business, and the future saving greatly exceeds everyone's expectations.

Having a central point for order entry in a call center will enable the Baker Corporation to establish a streamline approach for the ordering process. The streamline approach will begin to establish standardize policies and procedures of how parts will be order. Commercial orders will maintain a high priority, and residential orders can be track, this data will be utilized to stock the distribution centers. A central call center creates a specialty sales staff which is easier to maintain and control, leading to fewer people taking orders, thus reducing the typographical error or miscommunication. Less people to train for sales, which will directly reduce the number of sales offices needed. The company website will further take the load off salespeople; customers can view the products and order with confidence to ensure the right part was ordered. Shipping information will also be available by website. More so, creating call center in Phoenix AZ will provide the following advantages;

a) Advanced telecommunications infrastructure, Phoenix is a well-established place for the call centers.

b) Large and growing labor pool of specialists in all areas of telecommunications and other research fields.

c) Relatively low business and labor costs.

d) Neutral-accent population.

e) Excellent weather without natural disasters- this is an added security feature.

f) High-quality lifestyle- excellent.

Furthermore, a central call center and a central order entry system will enhance the process of ordering parts and reveal any weakness in the logistics aspects of the business. Each distribution site will store parts on an as needed bases, each store will have a week's worth of inventory- just mostly commonly used parts. This order entry system will provide the needed data to support Just-In-Time Inventory. By reducing inventory, the Baker Corporation will be able to reduce the amount of storage need at each distribution center, the amount of personnel to maintain the inventory, but more so the ability to control and see exactly what is being requested and ordered. The logistical aspect of distribution center will change its standards and procedures. Mores so, the innovation of just-in-time inventory will enhance operations to controlling what is needed at the distribution center, which will acknowledge excess and provide the raw data need to make labor reduction.

The call center also be a data reporting center, and will monitor and report the constant improvement system of checks and Statistical Process Control is utilized in all areas of workflow. This means that all employees are to grade their manager and suggest improvement points.

The call center will track orders and minimize errors of shipping incorrect parts, thus leading to greater business efficiencies by managing the ordering entry and logistical operation through a new software program. Technically, call centers alone do not solve these type problems, since call center are nothing more than a central order entry point. Therefore, the project team will outsource a firm to create a software perform order processing, logistics management and a tracking mechanism for all orders, and errors made during daily operation. The call center will maintain this database and use it to provide customer resolution and inventory adjustments. This data base will provide the details of all supply bottlenecks, and provide resources to correct