Southern Toro Distributor, Inc.

Name

November 18, 2018

Week 4 Case Study

Southern Toro Distributor, Inc.

Summary

        The entire case is presented as a conversation between a father and son in Galveston, Texas. Southern Toro Distributor is an irrigation system company who I ran by owner and general manager Joe Melaney. Joe has reached a crossroad in his career where he wants his son Joe Jr to start considering taking over the family business. Melaney wants his son to be more apart of making decisions especially the decisions needing to be made for spring season. Melaney questions his trust of a system that he recently contracted and Joe Jr questions his father’s ideas with how he runs the company and manages inventory. Joe Jr is faced with the decision of not wanting the stress to continue to run the family business or finding a way to run the family business more strategically and getting a greater ROI.

Discussion Questions

What would you recommend that Joe Jr. do, assuming he takes control of Southern Toro?

        Joe Jr.  should review their financial analysis over the past few years to determine where they can cut cost. During the conversation Melaney mentioned 25% of their stock collecting dust. It would be effective for the company to use EOQ and a reorder point on every item as suggested by a consultant. The numbers don’t lie and if the company uses the data from previous years along with some of Melaney’s ideas they have a better chance of survival and not having to finance. Joe Jr. should continue to review weather expectancies to assist with inventory since their business relates to nature. I would also suggest that Joe Jr. considers a sales team who can connect with potential clients and give bids to gain more customers prior to the spring. Having a sales team gaining consumers during slower months will allow for them to be prepared for the spring for multiple reasons.

• Inventory management
• Start on projects that are time sensitive and need to be ready for the spring
• Getter ROI (more consumers more profit)
• Longevity of the company

Joe Jr could consider quality control and retention for the contracts that they lost due to stock issues. The company seems to focus on quality for the most part with understanding you can not please everyone. However, some of their quality can be more efficient considering they revamp their order process(es). Joe Jr. should consider the products that are predominately selling such as series 230 valve. It would also be wise to consider cutting products that are not selling or keeping less stock. If he decides to continue to use RyTech he should be re involved with the process and ask more questions to make sure that the company is a right fit. I would suggest that he investigates a way to get rid of the unused inventory to clear up space for much needed inventory. He could sell the products to another distributor or consider doing a blow out sell to customers to rid themselves of the unused inventory while they still have the opportunity to get an ROI.