OPTION # 1: Continue to focus on improving output in the existing line.
POSITIVE IMPACTS: This move will significantly increase the technological outputs of the company, although it must come with appropriate production planning. Production planning is a necessary function within the company if it aims to improve output. In manufacturing and technological companies this process is often very difficult because of the fast rate of change and the occurrences of unplanned events. This company uses several methodologies depending on the rate of demand of the customer and the price of the technologies. Nevertheless, the objectives of the company for every transaction do not change: efficiency and effectiveness.
Production planning must be implemented by this company in order for its activities and resources to be coordinated over time. This enables the company o achieve its goals with minimal resource utilization. Production planning also enables the company to monitor the progress of their plans at regular intervals and maintain their control over operations. Production planning within the company must involve four elements: scheduling, labor planning, equipment planning, and cost planning.
- Scheduling involves the specification of the beginning, the length or the duration, and end of the planned activities.
- Labor planning involves allocating the necessary personnel and delegation of responsibilities and resources
- Equipment planning involves identifying the types and needs in terms of equipments.
- Cost planning involves determining the costs and the possibility of their occurrence.
NEGATIVE IMPACTS: Definitely, this move will entail millions of dollars in expenses in terms of purchasing new machineries and technologies as well as hiring the competent personnel in the job market. It is definitely a risk, but it is worth taking since the increase in output will be gradual and well-planned. In one to two years, the overall expenses will eventually be recovered.
OPTION # 2: Duplicate the existing production line.
POSITIVE IMPACTS: This is the most practical move, because there is very little risk involved. Since the existing production line of DTI has been very much accepted by their clients, there is a high probability that the current production line will still continue to deliver revenues for the company for the next 1-2 years. As the saying goes, “why fix it if it ain’t broken?” It is important for the company to exhaust all revenues that it can get from the existing production line while the new production line is still being conceptualized. This will give ample time for the company and its production team to fully prepare for the release of a much improved production line without prematurely shipping out in the market the existing production line.
NEGATIVE IMPACTS: Shima himself admits that the company’s workforce is still not ready to work with the new and current production lines at the same time. Their concentration will be affected by intense pressure once the improvement of the current production line and the development of the newer production line comes at full circle. Also, there will be financial risks that the company will have to endure once the new production lines take over the current production line. Hopefully, the revenues would outweigh the costs in the long run.
OPTION # 3: Invest in a radically new line employing new technologies.
POSITIVE IMPACTS: This is the riskiest option among the three but certainly worth the look. Surely, investing on new technologies is not an easy thing to do, but this is what every starting company does. However, to enjoy success is in this incredibly risky option, DTI must implement consumer research within the industry to help them get a reflection regarding the effective use of valuable resources such as money, materials, equipments, and people. Consumer research will help the company determine the most effective ways to coordinate these resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering.
Through this process, problems will be solved in different ways and alternative solutions are then relayed to the company’s management. The management then selects the appropriate course of action in line with the company’s goals, in this case investing in a radically new line employing new technologies. More often than not, consumer research analysis is concerned with complicated issues such as top-level strategy, resource allocation, designing of production facilities and systems, pricing and the analysis of large databases. Consumer research analysis actually may vary according to the structures and philosophy of the company. But in the case of DTI, it centralizes consumer research analysis in one department. Consumer research analysis may also have the possibility of working closely with top level managers in order to identify and solve a variety of problems.
No matter what the type or structure of the company is, operations research analysis operates under similar sets of methodologies in order to carry out the analysis to support the company’s goal to improve its overall performance. The process is started by the description of the symptoms of a problem, followed by the formal definition of the problem. For example, a consumer research analyst for DTI might be questioned regarding the most cost-effective new line employing new technologies.
NEGATIVE IMPACTS: The main risk in this option is the fact that the company will be investing a huge amount of money on an untested, new line of technologies that the public hopefully will embrace. Basically, the consumers will look at the name of DTI and trust the quality and convenience of its previous products. However, it will be hard to convince the consumers who do not entertain their previous products much more the new line of technologies. DTI would have to do some impressive advertising of these new technologies so as to persuade consumers to buy their new products or else, they would be facing financial handicap in the future.
RECOMMENDATIONS
The author strongly recommends that the Management pursue Option # 2 (Duplicate the existing production line). Along the process, a tie-up or merger with various local technological companies may offer tremendous benefits in terms of access to their operations management policies, infrastructure and even its resources. However, DTI must not lose sight of its core competencies while pursuing these tie-ups. Otherwise, the image of this company might be put in jeopardy.
Meanwhile, the collaboration of DTI with its major competitors can be seen as a ridiculous move at first. However, upon close examination, this move could pave the way for this company to improve even more its operations management, leading to the duplication of their existing production line. The bottom line is both sides would be able significantly gain in such an alliance. DTI’s strengths in product development combined with the operations management capabilities of their competitors can transform them suddenly into an unbeatable force to reckon with. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of DTI’s competitors has the need to form alliances.
The third option also focuses on alliances, but this time with either one of the suppliers specializing in their products. The benefits of these alliances should outweigh the costs in the long run.
CONCLUSION
The results of the analysis carried out on the three options available for DTI indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the operations management of the company could still be expected to improve faster than average.
The review of the three options revealed very little inconsistencies regarding the company’s strategies. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for DTI.
The analysis of the company environment as well as the operations management and capabilities of DTI revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the company’s competitiveness.
Also, DTI and Toru Shima has to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options.
Credit:ivythesis.typepad.com
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