A Comprehensive Case-Study On Value Proposition, Resource Management And Sustainability Of CoLinx

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27-07-2015

Question: Write a case study on CoLinx?

Executive Summary

CoLinx is a shared services organization who does not deal with customer. Manufacture-members are included in the business operation. One website is provided by the organization to access the information by the members, distributors and customers. This study based on the answers of three questions. First one is related the elements of value proposition for the manufactures of CoLinx. Second one is based on the major sources available to the company for saving the manufacturer-members and third one is related with the keys to long-term sustainability of relationship.

Table of Content

Elements of the Value Proposition
Major sources of savings for manufacturer-members
Keys to long-term sustainability of a relationship
Conclusion
References

Elements of the Value Proposition for the manufacturer-members of CoLinx

Value proposition refers to the total benefits available from an organization or what promise is done by a vendor as the return against the payment of the customer (Kachru, 2009). Value proposition is the marketing statement that describes why a customer should purchase a product or render a service. There are basically three elements of Value Proposition: Capability, impact and cost (Stolarczyk, 2010). Capability refers to the level of benefits provided by the organization to the customer. It defines the ability of an organization to provide the maximum benefits to its customer. Impact is the reaction of the customer against the benefits provided by the organization (Gattorna, 2009). It explains the success of benefits given by the organization to its customer. Cost is associated with the benefits. It is required to know what the customer must pay for getting the benefits from the company.

CoLinx is a manufacturer-owned provider of shared e-commerce and logistics services in North America. It was established in 2001. It includes four competing manufacturers. The founders of CoLinx are Rockwell Automation, SKF Group, INA Holding Schaeffler KG, and The Timken Company.

In business world, each entity wants keep their separate or individual business interest. The focus is to make their own brand identity in the market at a minimum cost (Grawe, 2009). It is observed that shopping mall enhances the visibility of the stores it houses (Wang, 2013). Each storeowner will be benefitted if large number of people passes from the front of stores. On the other side, a mall provides such kind of environment where wider range of complementary products and services are available (Routroy, 2009). The benefits offered by the CoLinx is almost identical with the benefits offered at shopping mall. The exposure will increase to the manufacturer to a considerably wider array of distributors (Borgman and Rachan, 2009). Distributors can also gain benefit from varieties of products and services because the products and services are available at vast and more convenient than the accessibility via individual sites.

At this venture, the founders are focused on the return on investment and capacity utilization. Each founder has their own interests to involve in e-commerce. Each individual feel discomfort relating to the level of investment. Purchasing at CoLinx, the founders can able to obtain all the functionality of e-commerce which they required for what the organization explains as regarding a quarter the price of doing it themselves. The expectation of the members is to obtain the substantial return on investment. They also expect to avoid the costs except the cost incurred related to the activities which is not possible to share.

The founders try to emphasize on the improvement of relationship with their distributor customers and ensuring that all individual manufacturer keeps control for retaining the relationship (Klaus, 2009). According to those criteria, CoLinx tries to keep in ensuring that PTplace avoids the characteristics of an exchange. Co-Linx takes actions for preserving the relationships between the manufactures and their customers. ColLinx is success in enabling the individual control. The Website interface is controlled by the BroadVision Software and the personalization functionality. Where, all sensitive data are kept by the manufacturer’s individual proprietary systems. It is observed that the CoLinx does not maintain the order information despite log of orders done through PTplace. It is the responsibility to the each manufacture what to present to the customer. Each manufacturer is also responsible for dynamic pricing, invoicing and retaining the distributors (Gomez-Padilla, 2009). Through those functions of manufacturer, CoLinx maintains the relationship with customers. Each manufacturer has their own log in id and password to access the websites. Each individual has the right to tailor the information visualized to each customer and the protection available to keep that information confidential from the other unauthorized users and other manufacturers.

Shared logistics operations are observed among the manufacturer-members. The efficiency and accuracy of the logistics functions of CoLinx is so well. It provides service to the distributor branches in 93% of the time within 24 hours. After the sale is done, the manufacturer-member is liable for integrating the information (Bretzke, 2009). Flow of information occurs from PTplace to each legacy system and from legacy system to the logistics system. CoLinx is success to provide facility of shipping service with more frequent.

Elements of the Value Proposition for the distributors of products that are shipped from CoLinx

Distributor can obtain benefit with working with CoLinx. The distributor need not to access large numbers of sites for serving their customer. The four large manufacturers are available in one Web site. Distributor can easily access and check the information. As a result, they can increase their responsiveness for their customer. CoLinx can train them easily through their website. A one password can access all information regarding the fifteen thousand products which are offered through PTplace. CoLinx is success to strengthen the relation between distributors and their customer and between the distributors and their suppliers by making easy the learning for adjusting to operating commerce online.

Major sources of savings for manufacturer-members of CoLinx

There are several options to save the manufacturer-members of CoLinx. CoLinx is a one type of nonprofit organization. A nonprofit organization does to give focus on the increasing the earnings. Nonproft organization tries to gives more benefit to the customer reducing the cost as much as possible. CoLinx does not focus to promote itself by building the brand image. The mission of the company is to be the best choice for the manufacture-members. The members of CoLinx obtain the advantage of reduced cost accumulated by the company. Members have the right to access the all services offers by the company. Each and every member has the own password to access the website and they can keep their information confidential from the other members. The various services involves packaging, labeling, warehousing, kitting, light assembly, freight bill payment and audit, system to system connection with the customer, PTplace web stores, logistics management, cross-docking , consolidation of shipment and processing of returned goods (LeeYongKeun, 2009). The cost is reduced by the company by providing more frequent deliveries (Tian, 2010). So, that is the also benefits for the members. Employees can be shared from one member to another member which is also help in saving the money. Proper training is provided to the employees to handle the service operation. CoLinx try to save the money of the manufacturer-members by sinking the cost of shipping which is paid by the each and individual manufacturer-members (Jiang and Wang, 2013). CoLinx provides such platform and control to manufacturer where they can build a good relationship with the customer. The company has the ability to provide robust vehicles to the manufacturer for marketing their product to the large number of customers.

Keys to long-term sustainability of a relationship such as CoLinx

CoLinx is a 3PL company or third party logistics company. 3PL company works with shippers to control and manage the logistics operations (Pienaar and Vogt, 2012). There are various elements are included in logistics such as warehousing, freight rate negotiation, transportation management software, forecasting, in depth reporting, freight bill auditing and many more (Sople, 2010). The tasks are different to the several 3PLs. Their operational models are different according to their tasks. Relationship is important to the marketing for keeping sustain in the market. A long term relation needs to build with the members or customers. Satisfaction is the key thing to build the long-term relationship with the customers, suppliers or distributors. They sick the maximum benefits from the products and services of the company. According to the traditional marketing, the companies tried to increase the new number of customer. But the present scenario explains that customer retention is more important than increasing the new customer to sustain in the market (Bockholt et al, 2011). The parties related with companies looks for both financial and social benefits. Co-operation is another important key to sustain in the market. A good co-operation with the members, suppliers, distributors or customers helps to sustain the long-term relationship with them (D.A.S. et al, 2010). Companies need to apply proper technologies and methods of operation to coordinate the collaboration within the network.

Trust and cooperation based relationship is required by CoLinx for long –term sustainability. Shared risk investment and the unique goal are also important factor for sustainability. Each and individual members engage to contribute the services and can achieve their own objective as well as help in achieving the overall goals of the company (Koseki and Noda, 2010). CoLinx has several options to keep sustainability for long-term. Members do not feel the PTplace site as an exchange or e-market place. If they feel, they do not go for the business with the customers. The sale is not done directly by the CoLinx to the distributor or the customers. The manufacturer-members can only sell the product to the distributor or customer. So, it helps to keep the member tending to use their services. By involving the manufacturing-members in the business, a legendary customer service is allowed to provide to their customers.

Conclusion

In conclusion, it can be said that the company is success to build the good relationship with the members by providing maximum benefits. Shared services help to retain the members and control the logistics operation. Further, the company should give more effort to maintain the long-term sustainability.

References

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Bretzke, W. (2009). Supply chain management: notes on the capability and the limitations of a modern logistic paradigm. Logist. Res., 1(2), pp.71-82.

D.A.S., A., Sequeira, A. and G.S., R. (2010.). Supply Chain Management & Logistic Strategy at S M Electronics for Reducing Cost & Improving Service. SSRN Journal.

Gattorna, J. (2009). Dynamic supply chain alignment. Farnham, England: Gower Pub.

Gomez-Padilla, A. (2009). Supply Chain Coordination by Contracts with Inventory Holding Cost Share. International Journal of Information Systems and Supply Chain Management, 2(2), pp.36-47.

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Kachru, U. (2009). Exploring the supply chain. New Delhi: Excel Books.

Klaus, P. (2009). Logistics research: a 50 years’ march of ideas. Logist. Res., 1(1), pp.53-65.

Koseki, T. and Noda, T. (2010). Run-Curve Design for Energy Saving Operation in a Modern DC-Electrification. Journal of Mechanical Systems for Transportation and Logistics, 3(1), pp.349-357.

LeeYongKeun, (2009). A Study on the Activation of e-Logistics Service in Global Logistics, 7(1), pp.41-63.

Pienaar, W. and Vogt, J. (2012). Business logistics management. Cape Town: Oxford University Press.

Routroy, S. (2009). Evaluation of supply chain strategies: a case study. IJBPSCM, 1(4), p.290.

Sople, V. (2010). Logistics management. Delhi: Dorling Kindersley (India) / Pearson Education.

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Tian, Z. (2010). An Empirical Study on Operation Efficiency of China’s Logistics Industry Based on Super-efficient DEA. Contemporary Logistics, pp.3-5.

Wang, X. (2013). Model Innovation of Exhibition Logistic Supply Chain. AMM, 397-400, pp.2672-2676.