Westmills Carpets Limited

Essay by rainbow2000University, Master'sA-, June 2004

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What should be done?

Derek Mather should act as the turnaround manager and get everybody involved in his solution under his direct command. The most urgent thing is to get rid of non-profitable products and cut cost. On the other hand, he should improve cooperation between departments and fully develop the control and financial system in order to achieve on-time delivery and reliable product quality.

Why should it be done?

First, the degree of shareholder commitment would be impressive if CED is prepared to supply additional capital and personnel. Currently, Westmills need a turnaround leader to bring order to chaos. Derek, VP of CED is a good candidate to satisfy shareholders and bankers.

Secondly, Westmills has limitation in their equipment to produce multicolour carpets. Multicolour design is ill fit to the Calgary plat. In addition, due to imported material and exchange rate, its high cost forced Westmills into non-competitive situation.

On the other hand, they can make a good solid color fabric and reasonable upgrades will bring more profit for them.

Third, dependability of delivery and good quality are always important in maintaining good customer relationship. But Westmills' quality and delivery problem are the worst ever. One reason is the difficulties of coordination between some departments, such as urgent sales order cause manufacturing department unable to schedule properly, which rise up the quality problem and make customer unsatisfied. Then it will be difficult to get order from this customer again. The other reason is half-finished control system, with shortcoming from order entry to cost control, are unable to keep reasonable effective or efficient standard.

How should it be done?

At first, Derek should give up non-profitable products, such as multicolour carpets and upgrade its strong product--solid color design in order to get more profit from it.

Second, Derek should...