Solutions Issues Raised Case Perspective Global Chain

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ISOL case study

The ISLO + Group is an international organization focused on the creation of insulation products, serving customers in numerous industries and markets. The company operates facilities in Spain, France and Italy, with the highest sales volumes being registered in France, and the lowest in Italy.

Currently, the company is looking to increase the volumes of its production in an effort to further enhance its financial results. In this order of ideas, the developments to be engaged in by the firm throughout the duration of the following year (1994 as according to the case) are focused on an increase in the sales volumes, coupled with an increase in the quality of the services delivered by the firm, with the purpose of increasing customer satisfaction and also boosting sales.

Identification of issues raised

As it has been mentioned before, the ISOL + Group seeks to increase its revenues by stimulating sales and boosting the quality of the customer service. In both endeavors nevertheless, the company encounters specific issues, which are hereby named. In the case if sales increases, this objective would be difficult to be attained due to the low production capacity in France, where the plants are unable to meet the new production volume expectations. In the case of service quality improvement, the issues are pegged to the already existent weakness of the firm in increasing production, meaning that its resources would be allocated in this direction. With the organizational efforts focused on production, the quality of the services might suffer.

3. Analysis and discussion of issues

The volume of production is expected to be gradually increased throughout the following five years (up until 1997 and 1998) at all manufacturing plants in France, Spain and Spain. The increases in volumes expected vary from one country to the other, referring primarily to the following figures:

An expected increase in sales volumes in France by 5 per cent

An expected increase in sales volumes in Spain by 270 per cent

An expected increase in sales volumes in Italy by 250 per cent (case).

These sale increases are expected to generate direct increases in company revenues and profits, but the problem identified is that the projected growth model is not sustainable in France.

In the case of the service quality issue, this is raised by the shortage of production capacity in France. In other words, when the plant is already battling insufficient infrastructure and resources to complete its production expectations, how could it focus its energy and resources also on increasing the quality of its services? The core of this problem is represented by the operations in the distribution centers, such as warehousing, order processing or actual distribution. In other words, the difficulties are identified along the logistics network.

The targeted parties in the issues linked to customer services are represented by the smaller size firms that purchase insulation products from the ISOL + Group. These customers require special attention from the company since they purchase products from the whole sellers, and they as such solicit adjacent services linked to logistics operations.

4. Alternative solutions to the issues

In an effort to address the production shortage at the plants in France, the ISLO + Group considers the following three alternatives:

Investing in a palletizer, with support from a Dutch plant

Setting up a new production line in the same manufacturing plant in France, or Building up a new production facility in France.

In the case of increasing customer service and improving the customer experience to further stimulate sales, the solutions proposed above are the most adequate mechanisms for approaching the issue. This is explained by the fact that the customer service is linked to the production issues, and that the service cannot be improved unless production demands are satisfied. The table below lists the advantages and disadvantages of the three solutions proposed above.

Advantages

Disadvantages

Investing in a palletizer

Decreased costs of investment

Uncertainty