Case Study 11

1. Original predicament

The group was short of professional skill and needed time to implement corrective action. Various problem areas existed and the urgent action was overdue. The need to divisionalise a subsidiary, investigate utility costs group wide, control inventories at a distribution centre, analyse scrap at a manufacturing plant and also replace outmoded systems there. Various incidental matters all needed high quality and permanent solutions.

2. Suggested solutions

In house computer development was slow and an alternative fast track proposal was made for the new enlarged divisional reporting structures to connect seamlessly to the existing systems. Expert help was offered to persistently reduce utility costs. Also better controls needed introducing in other identified areas within the organisation. The frequency of inventory inspection needed to be increased to create more control and then be incorporated within a newly standardised umbrella. Unexplained manufacturing scrap required an in-depth investigation and, once solved, incorporation into relevant production costings. The old system at the heart of the manufacturing process needed immediate surgery to ensure survival of the business and then urgent total replacement to give guaranteed operation and future expansion. Other positive solutions were proposed for the various other problems.

3. Results

The proposed solutions were accepted by the board and APS set about implementing them. The new system development gave far greater analytical capacity than expected and became the cornerstone for divisionalised management information. Control of utilities was better directed and cost savings began to quickly flow. Inventories became more visible, records more accurate and staff perception greatly enhanced. The major source of manufacturing scrap was identified, evaluated and included in the costing system. The old system was prevented from collapse whilst the replacement was quickly programmed, tested and successfully implemented. The project delivered many years equivalent of spare capacity and guaranteed the future viability of the whole operation.

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