Financial Analysis: Hershey Corp. Tootsie Roll Industries

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