Case Scenario:
Parker Earth Moving Co. has experienced a reduction in their market share because of foreign competition.
Resource: Parker Earth Moving Company Consulting: Business Process Recommendations
Read the scenario and apply the current principles of system operations management to help Parker Earth Moving Co. be more competitive.
Create a 300- to 500-word memo that contains recommendations to improve the company's business process.
Address the following requirements:
A) Recommend ways to implement revised business practices and processes that will achieve profitability for Parker Earth Moving Co.
B) Describe how your recommended revised business practices and processes will affect the company.
Parker Earth Moving Company: Business Process Recommendations
Read the scenario:
BACKGROUND:
Parker Earth Moving Company has been in business for 34 years and has traditionally been profitable. The company has an excellent reputation for producing high-quality small earthmoving equipment used in the home and small-business landscaping industries. The company produces four models of earthmoving equipment. The owner and founder of the business is a person who likes to act on instinct instead of establishing formal plans and is a genius in designing and building small home-use equipment. Taylor, however, is not well suited to leading a team-oriented and fully coordinated business effort. Sales forecasting and determining specific customer needs have never been high on his list of priorities. While the four models have many interchangeable parts and some assembly line operations and activities could be consolidated, Taylor has refused to do so and maintains four separate assembly lines for the four models.
THE CURRENT SITUATION:
Foreign competition has reduced market share of PEMC from 47% to 29%. Quality is still regarded as the best in the industry. PEMC has suffered losses of 3%, 7%, and 11% in the last 3 years. Inventories of raw materials and work-in-process are too high. Severe interruptions in the manufacturing processes on the assembly line are occurring with increasing frequency due to the correct parts not being immediately available. The parts are in stock but not in the right place at the right time and not stored in racks that are compatible for use at the assembly line. There is widespread bickering and finger pointing between department heads and workers on a daily basis. Effective coordination and communication between departments is virtually nonexistent. The manual inventory system leaves much to be desired. Productivity in the plant is down sharply and customer complaints are mounting because ship dates of finished equipment are often 45 to 60 days late. Understanding of customer needs is at an all-time low.
AN ENLIGHTENING EVENT:
Taylor’s youngest son, Jack—one of four brothers in the business and the only family member with a college degree—received an invitation from a former classmate, who is the production manager for an electronics manufacturing company, to visit his firm to view its processes. Jack was amazed at the smoothness and coordination of all business processes at the firm. One of the most interesting facts was that all planning for satisfying customer demand starts with a well-defined sales forecast that includes precise service levels, products demanded by individual stock-keeping units, and the geographic area of demand.
A NEW ERA BEGINS AT PARKER EARTH MOVING COMPANY:
Jack returns to the family business in a very upbeat state of mind regarding the possibilities of the firm. He points out to his father and other family members that there is a better way to do business. Not all family members, especially Taylor, are convinced that Jack is right. They know, however, something must be done or the business will go under. The family has agreed to let Jack bring in a team of consultants that his friend highly recommends.
Your team, as the highly regarded team of consultants, has been selected to analyze the current operations and activities of Parker Earth Moving Company. Your team of experts must make specific recommendations for the implementation of revised business practices and processes that will achieve profitability for Parker Earth Moving Company. These recommendations must include sound operations-management principles.