Written Analysis and Communication

Individual Assignment No. 4

Case Analysis Report
On
SchmidtCo (A)
Submitted by
Name : Varun Verma
Roll No : 131158
e!tion : "#A $%&' ( A
Institute o) "anagement* Nirma +niversity
,ate o) u-mission: ..(O!to-er(./13
%or O))i!e +se:
0rade
Executive Summary
!1midtCo* an inter(!ontinent auto(part distri-ution !ompany is in pro!ess o) in!orporating a ne2
3R4 system. It is e5pe!ted to en1an!e t1e management !apa-ilities and redu!e !osts signi)i!antly.
#ut t1e pro!ess is a 1er!ulean tas6 in itsel) as t1e e))orts and !osts involved are 1umongous. &1e
pro7e!t 1as already over(s1ot time and !ost -udgets due to poor pro7e!t management. &1e !ompany
needs to ta6e a stand 21et1er to !ontinue 2it1 t1e !urrent vendor or repla!e it altoget1er.
Considering t1e situation* t1e !ompany s1ould !ontinue 2it1 t1e vendor and !ome up 2it1 a ne2
plan to !omplete t1e su!!ess)ully.
Word Count: 97
4age 2 o) 1
Situational Analysis
!1midtCo
i
is into import o) auto parts )rom 3urope and distri-uting t1em in Nort1 Ameri!a.
#usiness is mostly inventory driven and operations are !omple5* all o) t1is ma6es importan!e o)
Inventory "anagement ystem very important.
&1e !ompany 1ad an out(dated inventory management system 21i!1 1as 2ay too many
s1ort!omings. It8s in pro!ess o) implementing ne2 3nterprise Re9uirements 4lanning $3R4' system
t1at 2ould repla!e t1e out(dated one ones t1e migration is !omplete. &1e salient )eatures o) t1e ne2
system are:
1. Conne!t all t1e e5isting modules* some o) 21i!1 are not !onne!ted due to limitations o) t1e
old system.
.. Redu!e all manual inter(module in)ormation e5!1ange 2or6.
3. #etter management o) -usiness modules li6e pur!1ase* sales a!!ounting* Customer-
Relationship-Management and t1e most important ones* 2are1ousing and inventory
management.
&1e !omple5 implementation pro!ess and 1uge investment re9uirements are t1e reasons )or !on!ern
o) :o1n !1midt* t1e operations manager and son o) t1e !ompany o2ner. %ailure o) su!1 pro7e!ts in
past 1ave proved )atal )or many !ompanies. :o1n 1as spent ; mont1s in planning t1e system(
migration and sele!tion o) pro7e!t implementation team
ii
. A)ter 3 mont1s* t1ey )inally !1ose 3urope
-ased ,&e!1 systems over t1e ot1er +.. -ased vendor )or t1eir edge in 2are1ouse and inventory
management.
#ut t1e pro7e!t 1as not -een pro!eeding as it 2as e5pe!ted. "ain reasons )or :o1n8s !on!ern are:
1. 4ro7e!t 1andling and 9uality o) 2or6 -y t1e vendor ,&e!1 system is very poor. 3ven t1e
,&e!1 !onsultants are not )amiliar 2it1 t1e 3R4 system t1emselves.
.. &1e !1midtCo !onsultant 21o 2as 1andling t1e old system 1ad le)t une5pe!tedly and t1e
I& manager 1as -een assigned mu!1 !omple5 tas6s t1at 1e !ould do* resulting in poor
per)orman!e.
3. In)rastru!ture upgrade* -eing !arried -y a t1ird party 2as 2ay -e1ind t1e s!1edule and 1as
proved to -e 1ig1ly e5pensive.
4age ! o) 1
&o add to t1e pro-lems* :o1n is not a-le to devote mu!1 time to t1e pro7e!t and is a-out to leave
)or 3 2ee6(e5e!utive program at <arvard #usiness !1ool. ,&e!18s V4 admitted t1e )la2s 2it1
t1e pro7e!t management and -roug1t in t1eir dire!tor o) !onsulting servi!es )or 1andling t1e
pro7e!t. <e also suggested )e2 !1anges li6e )inding a )ull time pro7e!t manager )rom !1midtCo
and repla!ing t1e I& manager to speed up t1e pro!ess. :o1n8s )at1er 1as advised 1im to ta6e 2ise
de!isions as t1e pro7e!t is going to a))e!t t1e -usiness seriously in terms o) !osts* personnel and
management. One o) t1e implementation(team mem-ers suggests :o1n to repla!e ,&e!1 2it1
t1e runner(up vendor arguing t1at investing )urt1er in ,&e!1 mig1t not prove -ene)i!ial. No2
it8s up to :o1n* t1e manager and* t1e o2ner8s son 21at 1e must do so t1at t1is pro7e!t proves to
-e one o) t1e 6ey su!!esses o) 1is !areer.
"roblem Statement
&1e -iggest pro-lem )or !1midtCo is t1at t1e pro7e!t implementation 1as overs1oot t1e time and
!ost estimates too mu!1 and :o1n is in a dilemma* 1o2 to pro!eed 2it1 pro7e!t !ompletion.
#b$ectives
1. u!!ess)ul !ompletion o) t1e ne2 3R4 system implementation.
.. 3))i!ient pur!1ase* inventory management* and !ustomer servi!e improvement.
3. Redu!e overall !osts in t1e long run.
#%tions and Alternatives
1. Continue 2it1 ,&e!1 systems and in!orporate !1anges suggested -y t1em.
.. 0o )or damage !ontrol -y repla!ing ,&e!1 systems 2it1 t1e runner(up vendor.
Evaluation o& Alternatives
1. in!e ,&e!1 1as -een 1andling t1e pro7e!t and t1eir V4 seems to -e !onsiderate* !ontinuing
2it1 t1em seems a )easi-le option in order to !ontrol !osts and !omplete pro7e!t 2it1out any
)urt1er delays. As suggested -y t1e V4* a ne2 I& manager 1as to -e -roug1t in to ta6e !1arge
o) all tas6s )rom t1e !urrent one. Also* eit1er :o1n s1ould dedi!ate more time as pro7e!t
manager or 1is )riend ,avid 0old-erg !an -e given t1e !1arge.
.. ,&e!1 systems do not seem to 1ave enoug1 e5perien!e. &1eir o2n !onsultants are not 2ell(
versed 2it1 t1eir system. As t1ey admit t1e mista6es at t1eir part* partial reim-ursements o)
4age ' o) 1
payments is possi-le and t1e pro7e!t s1ould -e 1anded over to t1e ot1er* more e5perien!ed
vendor.
(ecision
3valuation o) alternatives suggests :o1n s1ould !ontinue 2it1 ,&e!1 systems. As t1eir dire!tor
1imsel) is ta6ing !1arge )or t1e pro7e!t* 1e 2ill see to it t1at t1eir team 2or6s at to t1e -est o) t1eir
e))orts in order to !omplete t1e tas6 at 1and and sa)e(guard t1eir mar6et reputation. Costs 2ould
only in!rease 2it1 !1ange o) vendor. Also* -ringing in ne2 vendor means more time )or t1em to
understand t1e 21ole pro7e!t and its intri!a!ies.
Action "lan
1. &1e )irst t1ing is )or :o1n to dedi!ate more time to t1e pro7e!t. <e s1ould drop t1e plan o)
going to t1e <arvard program. &a6ing !are o) !urrent pro-lems is more important rat1er t1an
ta6ing management learning8s at t1is stage.
.. C1al6 out a ne2 pro7e!t s!1edule 2it1 ,&e!1 team and rede)ine t1e milestones to -e
!ompleted.
3. ,&e!1 system8s dire!tor s1ould -e !ommuni!ated !learly t1at no )urt1er delays and
un2anted e5penses 2ould -e entertained. &1eir team s1ould -e more !losely )ollo2ed 2it1
t1eir pro!eedings -y t1e !1midtCo team.
4. Clearly t1e I& manager is overloaded. 35!ept )or t1e net2or6ing part* all o) 1is ot1er tas6s
must -e immediately reassigned to ,&e!1 !onsultants so t1at everyone 1andles 21at t1ey
are good at.
Contin)ency "lan
I) ,&e!18s dire!tor ne2 plan does not seems to -e promising enoug1* t1ey must -e immediately
repla!ed -y t1e runner(up vendor and ,&e!1 must -e as6ed to re)und as mu!1 amount as possi-le
-ased on t1e milestones !ompleted 2it1in time limits. &1e ne2 vendor must -e !learly made a2are
o) t1e pro7e!t state and must -e as6ed to su-mit a solid plan )or pro!eeding 2it1 t1e a!tivities 21i!1
seem propitious enoug1.
Word Count: 9*'
4age * o) 1
+e%ort Exhibits
1, SchmidtCo Com%any "ro&ile
Com%any -ame !1midtCo
Com%any .y%e &1ird generation )amily(o2ned !ompany.
/ey %ersons in the com%any O2ner: "r !1midt.
Operations "anager: :o1n !1midt* son o) "r
!1midt.
0usiness Area Auto(parts import and distri-ution. 1/*///
di))erent to!6(=eeping(+nits $=+s'.
1eo)ra%hical Area o& #%erations Nort1 Ameri!a: +A and "e5i!o
2m%ortin) +e)ion 3urope $.1 di))erent manu)a!turers'
.y%es o& "arts Su%%lied 3veryt1ing )rom nut -olts to radiators. ./*///
parts s1ipped in a year.
Com%any3s 4inancial Si5e >4/(million
Em%loyee Stren)th ?/
-umber o& Warehouses 3* 4rimary in 41iladelp1ia $3ast Coast'* .
ot1er in @os Angeles $Aest Coast' and
"e5i!o(!ity $"e5i!o* sout1ern end o)
!ontinent'.
0usiness Com%lexities Inter(!ontinent operations
<uge variety o) parts distri-ution
Aare1ouses lo!ated at e5treme ends to
!over all over t1e !ontinent* re9uire very
e))e!tive inventory management.
u-stantial lead(time involved in pla!ing
pur!1ase order.
I" used is o-solete and unrelia-le.
4age 6 o) 1
2, Exhibit72: E+" System 2m%lementation .eam
4age 7 o) 1
8nderta9in)
&o A1om It "ay Con!ern:
I* Varun Verma 1ere-y de!lare t1at t1is assignment is my original 2or6 and is not !opied )rom
anyoneBany21ere. I) )ound similar 2it1 sour!es* I s1all ta6e !omplete responsi-ility o) a!tion ta6en
t1ereo) -y AAC &eam.
ignature
-ame: :arun :erma
+oll -o,: 1!11*;
Section: A
4age ; o) 1
End -otes
4age 9 o) 1
i
Re)er R3(1: !1midtCo Company 4ro)ile
ii
Re)er R3(.: 3R4 system implementation team