Wace Burgess

The Hong Kong Polytechnic University Department of Logistics and Maritime Studies

LGT2106 Principles of Operations Management

Case Study

Case C - Wace Burgess

Subject Lecturer: Dr King Wah Anthony PANG

Name: Ma Ka Kin Student number: 18091119D

Date of Submission: 11 November 2018

Case C Essay - Wace Burgess

Wace Burgess

Wace Burgess is a business belongs to Wace Group, which has a company specialized specializes in pre-press market and print technology. With the aim that being a world-class enterprise which’s product and service perceived values enhanced, Wace Burgess tries their best to provide a complete production service and improve the quality and efficiency of the communication process.

Wace Burgess contains different communication-related sectors, such as advertising, promoting print, flexible packing, etc., and with a major that producing cards include Christmas, everyday and special days’ cards. Many customers prefer Wace Burgess to be their supplier; however, those orders are usually with small amounts and different layouts. Thus, orders they received are typically less profitable as the high cost of production.

Opportunity from Marks & Spencer (M&S)

Since 1990s, the targeted customers of those companies changed, cards were beginning to be sold to the big retailers like supermarkets. In the autumn of 1994, Wace Burgess gained an opportunity to become the supplier M&S, a large retailer. However, this opportunity really was a challenge to Wace Burgess, as M&S’s order was different from those existing customers. Customarily, the size of orders were 5,000-10,000 sheets, with the average 8,000 sheets; and the popular card dimension was 175x125mm under the standard size up to 720x1020mm that 12-16 cards printed on it with thick paper and lithographic printing machines. Variously, M&S came with their own specifications that 600,000 sheets in smaller sheet and size with just five design variants are required under the hope of wasting less paper.

Also, in contrast to the normal delivery pattern, single delivery, M&S’s order were planned to be spread over a few weeks.

Risks of Accepting the order from M&S

Taking the order that differs from the ordinary cases faced, Wace Burgess needed to bear different risks. Therefore, before accepting the order from M&S, Wace Burgess should consider the below risks.

The first risk needed to be considered is the excessive capacity. Referring to the order history of Wace Burgess on August in the same year, 1994, there were five customers with a totally 158,000 sheets ordered. With a far apart, M&S demanded a production of 600,000 sheets, which almost four times to the number customers required Wace Burgess to do normally. Besides, Wace Burgess needed to follow all requirements, involve the design and delivery time of cards set by M&S; in which those specifications were not similar as what Wace Burgess faced in the past. Facing the differences, Wace Burgess may need to spend extra efforts, for example, the time and manpower cost, in the procedure. As a result, Wace Burgess may not able to handle or produce the stocks on time due to the sudden increased order numbers or discrepancies among the past order provisions.

Besides, mechanical and human failure are the other concerns Wace Burgess had.

Having insufficient experience of dealing with such a big case, Wace Burgess may have the troubles related to the limitation on mechanical and labor. Although the techniques and manpower Wace Burgess had been able to fix with M&S’s order, those resources were just enough and without extra. Therefore, failure on the production may happen when there was just a little error among the machines and labor force. For instance, if one of the printing machines raddled, cards may not capable to generate on schedule, or if some workers quit the

job due to the crashing on work, there may lack of manpower and lead unable to pack or deliver the products as planned.

Furthermore, Wace Burgess had to bear the risk that the excellent reputation would be destroyed. Certainly, Wace Burgess had already built up a good image by remaining the quality of services and products; therefore, many small brokers bought their services.

Reputation relates to the customer satisfaction, trust, and loyalty, with a favorable reputation, new firms are more likely to try Wace Burgess’s service as the reputation seems like a reassurance of quality (Gul, 2014). Therefore, if Wace Burgess failed to meet the mission M&S gave, their reputation would be damaged. Hence, no company, both the big and small one, would pick Wace Burgess into their considerations. In the worst situation, those small enterprises patronized, they would not choose their company again in the nearly future.

Thusly, less income may result from the ruined reputation while Wace Burgess fails to meet M&S’s expectation.

Rewards of Accepting the Order from M&S

Everything has their pons and cons, taking the risks of accepting the order, Wace Burgess may gain the following profits from this chance.

The first benefit Wace Burgess could obtain is the solidity of the leader position in the market. As a leader among the industry, having only clients with small demands was the weakness of Wace Burgess. The successful is base for carrying out M&S’s order was a proof of the strength and power of Wace Burgess, in which implies they could handle various types of order well; thus, they were valued to be the head of the industry. Also, under the change of the main target among the industry, small retailers to large companies, status of Wace

Burgess would be decreased if they still just serve those small retailers. Discovering the new serving pattern and target, the position of Wace Burgess would be maintained firmly.

Apart from the security of the leader position, a new partnership with M&S would be built though this opportunity. Developing a firm relationship with M&S, which is an oversea supermarket with certain strength, Wace Burgess would gain lots of advantages in the partnership (Milmo, & Butler, 2018). First of all, the loyalty and trust would be given by M&S under the requirements satisfied completely. Moreover, the more chances from M&S would be offered. Being a huge party among the retail industry, M&S may have a large demand of promotion or retailing cards, posters, leaflets etc., regularly. Last interest being considered is the referrals from M&S. Regarding to the size of M&S, it must have many cooperators. Performed well in this opportunity, M&S may recommend others to try Wace Burgess’s service. Thus, an abundant and stable revenue would be gained under the development of partnership with M&S.