The crack is appearing
The PEW (Precision Engineering Works Private Limited) is an equipment manufacturing company specialized mainly in plastic moulding for tele-communication industries. PEW is servicing the industry for about 30 years. The customers in PEW are majorly from the tele-communication service providers. The company of PEW is a very successful company in the tele-communication sector (Firestone et al., 2018). The problem that is arising in the organization is that the industry has become very lucrative and many new suppliers have come to the market. This is a serious problem that is faced by PEW. The company is difficulty to get net contracts as the customers are facing many options from different suppliers. Other competitors are providing better pricing option compared to PEW (Geerling, Chernofsky & Pratt, 2014). The issue that is faced by PEW has decreased its profit percentage to about 45 % from its original sales. Another problem that is faced by PEW is that as there are many new companies coming up doing same work, the employees are also flooding from PEW and is opting to join some other companies (Chen et al., 2016). As a result, PEW is losing its market value. Other competitors are providing the tele-communication industries same equipment with less price compared to PEW. As the demand is decreasing, the employees of the company are also not getting any benefit from the company, because of which they are switching to other companies that produces same equipment.
So, to mitigate this issue, the senior management of PEW has decided to take some serious steps for solving this issue. They are looking at ways about how to improve this situation in the organization. The management of the company wants to gain all its customer and serve them as their supplier. These issues are to be overcome for the company (Booth, 2015). Within three months the management wants to overcome this situation. For mitigating their issues, this report states the main problem that is faced by the company with the tool as well as techniques (Buechler et al., 2015). There is also a continuous improvement plan for ensuring the problems as well as the issues which will help the company to prevent these issues to appear again. The competencies of Pew are also explained elaborately in this report.
Root Cause of Problem Identified:
One of the main cause for the problem that is faced by PEW is that the competitors of PEW are producing better quality of equipment than PEW. The problem that arises by this cause is that the company is losing its market value (Adams, Tenney & Pew, 2017). The competitors of PEW are providing better quality products to the tele-communication industries with low price. PEW is unable to get contracts as there are many competitors in the market. The tele-communication sectors will naturally opt to buy quality products with low price. So, with other companies evolving, PEW is unable to hold the market competition.
Another root cause of the problem for employees joining other companies is that Pew is not providing its employees with extra benefit that other companies are providing (Agrawal, Panigrahi & Subbarao, 2017). With 45% of loss, the company is unable to give their employee extra benefit. Due to which the employees are deciding to move to other companies from where they can get benefit.
Management response
Tools and Techniques to be used:
For addressing the first problem that is identified above, firstly the “Definition of Quality” tools and techniques are to be used (Lee & Olson, 2016). Quality of a product is mainly determined by customer and as Pew is losing the market due to the low quality of product. So this particular techniques is to be applied in the company which will help to retain the customer, win back the lost customers, as well as get new customers (Head & Alford, 2015). To retain the quality, there is another tools and technique available that can help the company to come back in the market. The management of PEW can implement the quality of management concepts that includes Plan, Do, Check and Act (Hammer, 2015). This is known as Shewart Cycle or Iterative cycle. For mitigating the first problem, another technique that can be used by PEW is implementing Cost of Quality (COQ). Pew can implement Internal Failure cost or external failure cost for during or after the project failure.
For solving the second issue that is stated above, the tool and techniques that can be used is Seven Quality Control Tools, 5 Why’s tool and technique, Kaizen Events, and 5S problem. The Seven Quality Control Tool consists of data tables, Pareto Analysis, cause and the Effect Analysis, Check Sheet, Histogram, Scatter Diagram, and the control charts (Lee et al., 2017). From these seven tools and techniques involved, the tool that can be used for this is the cause as well as effect analysis which is shown by the fish bone structure. This will help to identify the problem and explore it graphically. In helps in increasing the detail which is detect the main problem persisting in the organization and what are the main cause of the problem. The 5 why’s is another tool and technique that can be used in the company that arise five questions. The questions are asked to the employees about the problems and how to address the problem (Liu et al., 2017). Kaizen tools and technique can be used taking small steps for effort leading to improve the processes that are involved in the business. This implements an action approach for quick improvement. There should be small members in the organization so that all the work are done in time.
Assumptions made:
For addressing the problem above, the assumptions that are to be made are stated below:
- The management official of Pew should firstly implement the tools and technique which will help to reduce the cost of the product and will increase the quality of the equipment (Wasson, 2015). The management.
- Quality of a product is mainly determined by customer and as Pew is losing the market due to the low quality of product (Peerally et al., 2017). Quality of management concepts is also to be implemented in the business process of PEW which includes Plan, Do, Check and Act. This is known as Shewart Cycle or Iterative cycle. For mitigating the first problem, another technique that can be used by PEW is implementing Cost of Quality (COQ).
- The company is to collect data about the present situation of the company. About where the problem arises and what can be done to mitigate those problems (Vidyasagar, 2016). There is a fish bone structure which will help to analyze this problem.
- Another assumption that can be made collect the data related to the company from the employees of the company and the customer who are involved in the company. They can give genuine feedback anything related to the company.
Problems Identified
Based on the analysis of the case study, the following problems have been identified.
- The quality of the materials manufactured by the company is not up to the mark and also the costs of the materials are significantly high due to the high production costs. Previously, the buyers had limited options to buy and hence, the business of PEW flourished (Holweg & Maylor, 2018). However, as new companies have started rising, the buyers are getting better quality products at lower prices. Hence, the business of PEW is facing significant downfall.
- Due to the use of age old technologies, the production costs are significantly high. On the other hand, the new companies are using latest and updated technologies and are manufacturing the materials at a much lower price.
- PEW offers very limited benefits to the employees in addition to long and non-flexible working hours. Thus, many of the employees are leaving the company to join the newcomers who are providing more benefits, remunerations and flexible working hours.
Actions Taken
Based on the identification of the problems, the following actions need to be taken.
Technical – The technical set up used for the manufacturing of the products need to be upgraded such that the production costs are lower and the quality of the materials are better.
Business – The company needs to ensure the buyers that they are providing the best quality materials at the best quality prices. Furthermore, they need to ensure their prices and qualities are on par or even better than their competitors. In addition, the marketing department should emphasize on proper marketing moves to gain new customers.
Root Cause of the problem identified
Strategic – The company also needs to emphasize on the strategic part of their internal operations. The company needs to identify the exact reasons behind the resignation of the employees and should revise the wage structures, shift hours and benefits for the existing employees.
The resources required for solving the problems are listed as follows.
Technical Upgrades – As discussed previously, the company needs to upgrade the existing technical set up in order to prepare better quality products faster and at lower costs (Alarcón, 2014). For that purpose, the company needs to buy new equipments and parts that are much more effective and efficient than the existing set up.
Payroll System – The payroll system is required to address the employee issues regarding wages and benefits. The new automated payroll system can be used to revise the entire wage structure of the employees such that benefits can be incorporated within the same. Furthermore, it can also be used to revise the shift hours such that they are much more flexible and better for the employees.
Marketing Resources – In order to perform the marketing duties, the company needs to procure marketing resources. For instance, the company needs to develop advertisements that can be published via various digital media.
Finally, it can be said that the company needs to make a considerable amount of investment in order to overhaul the existing operational processes in order to cope with the competition in the market and take back the market share. However, the investment should be balanced and spent appropriately in order to procure the resources mentioned above.
Follow up Actions and Status
After the actions are taken, it will be required to take up some follow up actions and monitor the status of the business accordingly. Some follow up actions to be taken are listed as follows.
- After implementing the technical upgrades, it is required to use the newly upgraded system is producing the expected results and the productivity has actually increased.
- After undertaking the marketing moves, the company needs to follow up whether new customers have been interested in buying products for them after watching their advertisements.
- The company needs to determine whether the employees are satisfied with the changes in the system and whether the retention of employees has improved.
Business and Strategic Management
In order to solve the problems PEW has been facing in business, it requires sufficient competencies in its ranks. For business and strategic management, strong competency is required in the individual or stakeholder who has been assigned for that specific role (Holloway, 2015). The recruited stakeholder must have extreme proficiency in business as well as developing of business strategies for a large sized organization. The desired competencies in the business aspect includes proper pricing strategy of the materials, control of supply of materials to the market and convincing the customers that these are the best possible products available.
Another major point of the strategic management is to provide the employees with better wage structures, benefits and flexible work hours. This will gradually bring happiness among the employees and the retention rate of the company will increase (Harrison et al., 2016). The main idea behind this is to always stay ahead of the competitors and provide the best quality services to customers and facilities to the employees.
Technical Management
Technical management competency is required to ensure the best quality of materials is being produced at the lowest possible price. Furthermore, it is required to ensure all the technical equipments are functioning with the highest efficiency and providing the necessary inputs within suitable runtimes.
Tools and Techniques to be used
Leadership
In addition to business and technical management competency, the company also requires significant amount of leadership competency. A person is required to lead all the other departments of the company and show considerable amount of leadership qualities. One of the problems faced by the company is the lack of sufficiently strong relationship between the employees as a result of which, there is not much coordination between them (Shokri, Waring & Nabhani, 2016). In addition, with the lucrative deals provided by the competing companies, the current employees feel insecure and leave the organization to join the others. Hence, the company needs to appoint a leader who will not only lead the other employees but will also take actions to ensure that the employees are convinced that this company is the best place to work.
Conclusion
From the above discussion, it can be clearly studied that main cause of the problems that are faced by PEW (Precision Engineering Works Private Limited). PEW is equipment manufacturer of plastic moulding for telecommunication industry. PEW is an old industry serving its customer for more than 30 years and was only one market holding company at the time back. But with increasing number of competitor in the market producing same equipment, PEW is losing its market. The company is not producing best quality of products and the prices are kept relatively high when compared to other companies in the market. As in the earlier times, PEW was only the leading brand of these equipment, prices were very high. But after emerging of other companies, equipment were sold at low price, But, still then PEW kept its price high for which they were losing the market competition. This problem is stated elaborately in this report. Another problem that is stated in this report is that with business loss, the company was unable to give extra benefit to the employees for which the employees are choosing to join other companies from where they can more benefit. This problem is also explained in detailed in this report. This report also states seven tools and techniques that can help to solve the causes that were involved in the company. To mitigate the problems of PEW, continuous improvement plan is stated in this report that will help to mitigate the problem in the company and ensure that this problems will not arise again in the company. This report also elaborates the competencies that are required for managing the process in PEW and how can employees bring change in the company to improve the situation.
References
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