Strategic Issues and the Operational Concerns Experienced by Commercial Technology - Case Study Example

Commercial Technology Case Study The aim of this report is to analyse the situation prevailing at Commercial Technology and identifying thestrategic issues and the operational concerns experienced by the company while conducting its business. In this regard, a proposal has been made on behalf of the company in order to make short, medium as well as long-term improvements and to address such issues. Most importantly, in order to help Comm Tech in managing the change or the above stated improvement programmes, various performance measures have been suggested to the company. It is expected that effective utilisation of these performance measures would certainly aid the company in developing its overall performance and attaining superior competitive positioning in the respective industry. 1. A Description of Comm Tech’s Current, Strategic, Quality and Operational Performance Commercial Technology Limited, which is also acknowledged as Comm Tech, manufactures electronic office and business equipments. The current, strategic, quality and operational performance of Comm Tech have evidently supported the company to attain a sustainable market share in its industry operations. This can be justified with reference to the fact that Comm Tech currently acquires third and tenth positions in the business markets of the UK and Europe respectively. However, the company requires generating higher sales margin, in order to attain a leadership position in the respective industry confirming its long-run sustainability and competitiveness in the market. According to the case study provided, the strategic performance of Comm Tech can be determined as emphasising successful collaboration with the leading suppliers of office equipments around the world. When examining its quality performance, it was apparently observed that the company invested substantial amounts over the years, specifically in the areas of research and development and in proto-type designing. Again, in its operational performance, the designers along with the engineers of Comm Tech have contributed in making attractive and sensational designs of several successful products, and thus, can also be regarded as a strength factor for the company. The operational performance of Comm Tech has enhanced in recent times as compared to previous years with the adoption and execution of objective-oriented effective business strategies. One of such business strategies can be apparently noted as its emphasis in developing a range of high quality products that would underpin penetration of the wider world markets and shape business growth. It is worth mentioning that the equity shareholders of Comm Tech pay utmost attention towards attaining its growth objectives within the stipulated time. This can also be regarded as one of the key potentials for Comm Tech towards developing its business and enhancing its overall performance by a considerable extent. Apart from the above discussed aspects, it is expected that certain other imperative factors have also contributed to the overall development of the performance of Comm Tech in recent times, when compared with the previous years. These factors can be apparently noted as producing quality products and delivering the same to the potential customers throughout the globe with utmost effectiveness. After acquiring a brief idea about Comm Tech’s current, strategic, quality and operational performances, it can be affirmed that the company has been following certain fundamental strategies based on which, it could attain a substantial proportion of market shares in the business markets of Europe and the UK. In this similar context, it is projected that Comm Tech has utilised the notion of quality management in its business owing to which, the market share of the company had increased by a considerable extent. Theoretically, the notion of quality management is described as a procedure, based on which, a business of a particular organisation seeks to make sure that its product quality is preserved or enhanced and most vitally, its operational errors are eliminated within time, to confirm the successful attainment of the predetermined organisational targets (Jain, 2001; Pekar, 1995). Thus, it can be affirmed from a broader understanding that Comm Tech has been practicing the concept of quality management, which supported the company in providing its business with a vibrant business focus; thus, enhancing its overall efficiency, raising customer satisfaction level, developing communications and augmenting cash flow along with profits. It would be vital to mention that the customers belonging to this modern day context are much concerned towards obtaining better quality of products and/or services rather than considering prices of the same (Crown, n.d.). By taking this factor into concern, Comm Tech might have applied the idea of quality management in its business, which resulted in attaining considerable portion of market share and profitability. As discussed earlier, Comm Tech has a history of successfully collaborating with world leading suppliers of office equipments. Hence, the fact can be assessed as depicting that the company had been quite successful in adopting the strategy of establishing better communication with its suppliers with the purpose of attaining the desired competitive benefits. Conceptually, communication in business is typically described as “the process of establishing a common understanding between or among people within a business environment” and certainly possesses ample significance in the contemporary business environment (Krizan & et. al., 2010; Singla, 2009). The company understood the importance of communicating and collaborating with its suppliers, as they play an imperative role in supplying the required products within a stipulated time period, before they are finally delivered to the consumers. This could also be another reason for Comm Tech to raise its market share along with profitability to the desired extent. In addition, the company has invested heavily over the years in the areas of research and development (R&D) and in proto-type designing. This can be regarded as one of the major factors, which eventually assisted and steered the company to attain third and tenth positions in the UK and European business markets respectively, in terms of its acquired market share proportion. Theoretically, the significance of R&D in a business lays in demonstrating the requirement of the customers and the customers for a specific product. Correspondingly, it is worth mentioning that R&D assists organizations in acquiring a better understanding about the changing preferences as well as tastes of the customers (Abrams, 2003; Roussel, 1991). Comm Tech’s designers and engineers have also contributed to the designs of several successful products that eventually resulted in raising the market share as well as profitability of the company within its targeted business segment. In this similar context, it can be affirmed that product design has played an imperative role on behalf of the company in attracting huge figure of customers. Theoretically, effective and attractive product designs helped in developing its business potentials through the generation of innovative products, business procedures and services. Specially mentioning, better product design might significantly add greater value to the respective products and/or services, which eventually may lead towards growing product sales, exploiting new business markets and consolidating the existing ones (Pride & et. al., 2014; Greylin, 2007; Cooper, 1999). Thus, based on the above discussion, it can be affirmed that the underlying factors contributed in raising the overall performance of Comm Tech include quality management, effective business communication, greater research and development and better product design. 2. An Analysis and Identification of the Main Strategic Issues and Operational Concerns With regards to the provided case study, it can be affirmed that the main strategic issues and operational concerns faced by Comm Tech was followed by its launch of the Office System 2012 (OS 2012). Identifiably, Comm Tech launched the OS 2012 several months ago as an extension to its product line. The product (i.e. the OS 2012) is viewed to be a single and very robust machine, which functions as a colour printer, scanner, copier and fax. Post launch, OS 2012 has been found to receive excellent reviews for its quality facets such as innovative design, reasonable price and better functionality, as compared to others, when participating in various trade shows and technical press. However, as observed in the provided case study, the product eventually led towards a severe backlog in unsatisfied orders, wherein the factory of Comm Tech simply could not cope with the volume of the demand of the product. This could be regarded as one of the crucial operational concerns for the company. The company became much concerned about the performance of the product as well as the factory, owing to which, there were even suggestions of sub-contracting the product manufacturing to far eastern suppliers and for coping up with this operational concern. Furthermore, due to severe backlogs in its sales operations causing unsatisfied orders, returns along with complaints from the clientele, OS 2012 was running five times higher in comparison with any other product belonging to the company raising another major managerial concern. Taking into account the business reputation on the line and the new pressure on behalf of the Board members, the Managing Director of Comm Tech, Janet (Jan) Johnson decided that this problem needed immediate attention from a number of perspectives and thus, she hired Kathy Blake Associates, a well-established consultancy group, to address and solve the problem. Notably, the major problem with OS 2012 lay in its casing. This strategic issue or operational concern has been clearly explained by the Supervisor of the Final Assembly section of the company John Allison. According to John, the case is basically comprised of a top and a bottom. The problem is that these two pieces rarely fit properly and thus, the respective operational authorities have to force them together. This ultimately exerts a massive level of stress on the cases. Based on his experience, John is pretty sure that the quality problem persisting within OS 2012 might be the cause for the stress cracked cases. However, John added that the company did not face this problem with the old suppliers. Hence, it can be affirmed that for making the process cost-effective, the company switched to other suppliers and thus, had to face quality related problems with its OS 2012. Apart from the casing issue, the problem was also observed in one of its machines, which was used to automatically fix electronic components onto circuit boards. However, as the printed circuit boards possessed certain issues, problems in OS 2012 were persisting. As a consequence, designers had to place the requisite components on the printed circuit boards very close to one another, which was too near for this type of machine restricting its proper functioning. It was due to this reason that numerous components with bent leads and boards ultimately went damaged beyond repair. Reviews from the distributors and the customer as well as those from the company official further revealed that about 30% of all the boards coming off the machine had some problem and were not perfect. These problems became apparent at the time when instructions were given to run the machine faster by 20%, which was the maximum speed for minimising the backlog. According to the Production Supervisor of Comm Tech, faulty boards or damaged components were the prime underlying causes for the problems identified within OS 2012. The workers of the company were under extreme pressure in order to get the boards through to final assembly. As per the viewpoints of David, the workers lacked is serving with adequate input while building the prototypes. These prototypes were supposed to be all hand built by highly skilled technicians. The prototypes were only built to provide feedbacks to the designers regarding the performance of their designs, rather than making deliberate efforts towards getting the boards through to final assembly. The other operational concern, which can be apparently observed with reference to the case study, is the hindered level of collaboration amid the factory workers of Comm Tech, imposing negative impacts on the production efficiency to design products as planned. As per the viewpoint of Engineering Director of Comm Tech Alan Teal, there was a degree of lack of training observed in the organisation owing to which, quality of the products were not maintained on behalf of the personnel. In conversation with Kathy, Alan highlighted that a few years ago, all the functions of the OS 2012 were now needed to be fitted into one box, which were previously scattered in individual products. This signifies that the products are going to be more difficult to produce with utmost quality. By taking into concern these crucial aspects, Alan strongly realised that manufacturing really needs to be developed, if the business needs to survive in the marketplace. As per the observations made by the Quality Assurance Director of Comm Tech Margaret Croft, utmost focus needs to be laid on selling the products more efficiently. Moreover, Margaret also recognized that the quality inspectors perform little more than checking products and tagging the ones that need to go off to rework. Thus, analysing and identifying the above discussed strategic issues and operational concerns, certain suggestions for making short, medium along with long-term improvements have been elaborated in the following discussion. It is anticipated that these suggestions will eventually aid Comm Tech in addressing the above recognized strategic issues and operational concerns, resulting in attaining superior competitive position over its chief rivals. 3. Proposal for Short, Medium and Long-Term Improvements Based on the discussion held in the previous section, certain strategic issues and operational concerns have been apparently observed as being faced by Comm Tech that eventually hampered the overall performance of the company at large. In this similar context, the company requires adopting and implementing certain important as well as effective measures for making long-term improvements and addressing the above identified issues. It can therefore be affirmed that quality issues should be regarded as the most crucial concern for the company, causing several issues throughout its marketing & sales functions. It would be vital to mention that the company is required to make improvements, especially in the performance of OS 2012 and the factory in its short-run operations so that the issue concerning severe backlog in unsatisfied orders gets addressed and mitigated efficiently. On the other hand, the company must resolve the crucial concern regarding returns along with complaints of OS 2012 that were running five times higher in comparison with any other products marketed by it due to severe backlog, when designing its mid-term strategies. Finally, the company ought to make long-term improvements in various spheres including resolving the casing problem, fixing electronic components onto circuit boards, developing manufacturing operations, providing effective training to the personnel and most vitally, establishing greater communication as well as collaboration amid the personnel. It is expected that the above discussed short, medium and long-term improvements would certainly aid the company in addressing along with mitigating the above identified strategic issues, operational concerns and quality problems persisting within OS 2012 by a substantial level. This, in turn, would certainly enable Comm Tech to attain its predetermined business targets such as attaining greater profitability in terms of market share and accomplishing competitive advantages thereon. There are numerous strategic options and measures based on which, Comm Tech can make the above identified short, medium and long-term improvements, resulting in resolving the different strategic issues along with operational concerns currently being faced by the company while performing its business functions. In this respect, the strategies and the measures of following the approach of quality control systems, implementing differentiation strategy and applying the conceptions of Total Quality Management (TQM), balanced scorecard and Six Sigma can be proposed to Comm Tech with the aim of accomplishing the above stated objectives. From the perspective of making short-term improvements in terms of enhancing the performance of OS 2012 and the factory, the company might apply the idea of balanced scorecard in its strategic development procedure. This would not only support the company in making greater improvements in the above discussed criteria but would also aid it in mitigating the issues related with severe backlog in unsatisfied orders. Theoretically, the notion of balanced scorecard is often identified to be an effective performance system, which enables a particular business enterprise to measure and control its performances in accordance with a pre-defined strategy (Niven, 2010; Figge et. al., 2002). This can be better understood with the help of the following graphical representation. As Comm Tech is facing one of the crucial issues, i.e. severe backlog in unsatisfied orders, it can apply the notion of balanced scorecard. This approach would certainly aid the company in improving this crucial situation and mitigating the issue through the diagrammatically represented ways as follows. Source: (Johnson, n.d.) In addition, it is worth mentioning that Comm Tech might follow the approach of quality control systems as well, with the aim of making mid-term improvements specifically in resolving the crucial concern regarding returns along with complaints of OS 2012. Based on the provided case study, it can be apparently observed that returns along with complaints of this product run five times higher in comparison with any other product belonging to the company, due to severe backlog. The approach of quality control systems would certainly support Comm Tech in mitigating this issue through various ways. These ways include designing the products in accordance with the preferences of the customers, developing the production as well as distribution procedure of such products and focusing much on checking the quality of the raw materials that are used in the production process (Fusion Systems Co., Ltd., 2012). Accordingly, the other ways of mitigating the above discussed issue include inspecting the production plant procedures and most significantly managing as well as advancing the servicing procedures among others (Thulukkanam, 2000). It would be vital to mention that Comm Tech might apply the conceptions of TQM and Six Sigma in order to make sustainable long-terms improvements, especially in the dimensions of the casing problem, fixing electronic components onto circuit boards and developing manufacturing operations. Moreover, the approaches of TQM and Six Sigma might also provide active support to the company providing effective training to the personnel and most vitally, establishing greater communication as well as collaboration amid the factory workers. Prior to discussing their applications in making long-term improvements and addressing the issues based on the above stated dimensions, it is essential to acquire a brief understanding about these two aspects. Conceptually, the notion of TQM is regarded as a scientific procedure of managing business from a futuristic point of view. It is duly considered to be an effective way of managing valuable organisational resources like workforce, ensuring the accomplishment of greater customer satisfaction level (Mukherjee, 2006). The prime constituents of TQM can be apparently observed as people, business procedures and operational systems (Misra, 2009). A pictorial presentation of the concept has been given in the following for gaining a better idea about TQM. Source: (Mukherjee, 2006) Specially mentioning, the concept of TQM could be applied by Comm Tech in fixing the casing problem by adopting the idea of zero errors/defects. This idea refers to the systematic process of identifying the errors with accuracy to the highest possible extent (Shingo, 1986). In relation to the case study provided, it can be apparently observed that the casing problem was mainly caused due to the ill fit of the two cases, which often necessitated forcing them together, causing stress on the cases and cracking them thereupon. This eventually raised quality problems in OS 2012 of Comm Tech. Similarly, the concept of TQM can also be applied in making long-term improvements regarding the development of manufacturing operations and solving the manufacturing defects currently persisting in the company’s production processes by training people for comprehending the importance of building customer-supplier relationship and eliminating barriers through managing the overall business or operational process (Zairi, 1991). Based on the case study provided, Michael Hartley, the Factory Manager of Comm Tech claimed that the workers do not work together and thus, the company had to face issues in its production process to manufacture products accurately as designed. This might adversely affect the production capacity of the company by a considerable extent. In response, the company could adopt and apply the strategic system of Six Sigma in order to address, mitigate and make significant improvements in this particular dimension. Conceptually, the notion of six sigma is viewed to be a statistical term, which is fundamentally used for measuring the overall performance of the products and the operational procedures in Comm Tech, in opposition to customer requirements. Another definition of six sigma is that it is often regarded as a management philosophy as well as a cultural belief system, which drives the modern business organisations towards gaining superior customer satisfaction and deriving world-class business performance (Nunnally & McConnell, 2007; Pande & Holpp, 2002). The perception of six sigma can be better understood with the help of the following graphical representation. Source: (Ketch Consulting Inc, n.d.) As can be obserrved, the conception of six sigma would certainly help Comm Tech to make significant long-term improvements providing effective training to the personnel and most vitally, establishing greater communication as well as collaboration amid the personnel. To be precsie, it can be affirmed that the notion of six sigma would enable the company to address the different strageic issues and operational concerns that it faces while conducting business through defining, measuring, analysing, improving and controlling every operational function and the overall performnace of the business (Tennant, 2001). Bassed on the above identified strategic issues and operational concerns faced by Comm Tech, it can be justified that the incorporation of a quality control system would certainly enable the company in making short, medium and long-term improvements by a considerbale extent. It is worth mentioning in this regard that a quality control system will help the company to make such improvements by taking into concern its four vital aspects. These aspects comprise efectively utilising the accessible resources, performing managerial responsibilities effectually, developing manufacturing operations and performing quality evaluation activities accordingly (FDA, 2006). When performing managerial responsibilities effectually, Comm Tech can make such improvements by demonstrating greater commitment towards maintaining its quality assured operational or business systems. From the perespective of efectively utilising the accessible resources, the company can make such improvements by preserving the appropriate facilities as well as equipments for consistently producing quality products. Relating to the aspect of developing manufacturing operations and performing quality evaluation activities, the company can make greater long, medium and short-term improvements by way of recognising as well as controlling important variables and determining the adverse impacts imposed on business procedures and its personnel further hindering the organisational productivity overall. 4. Details of Performance Management Measures The idea of performance management is simply regarded as a procedure based on which, business organisations can monitor impornat factors of their respective programs, procedures and systems. Typically, performance managemnt mainly determines the activities performed by the organisations towards the attainment of business targets. It can be apaprently observed that there are certain reasons that substantially increases the need of measuring their respective performances. These reasons primitively include making decisions on the basis of solid evidence, demonstrating changes leading towards greater improvements, recognising improved performnace and monitoring process changes ensuring that the improvements get sustained for a long-term period (HRSA, 2011). Relating to the case of Comm Tech, it can be affirmed that the company require measuring its performance for two vital purpsoes. One of these purposes is to make short, medium as well as long-term improvements in the overall business or operational procedures. The other purpose is to address and mitigate the strategic issues and the operational concerns that the company has to face while conducting its business functions in the markets where it operates. In order to manage the change or the improvement programmes, certain effective measures are suggestible for Comm Tech, as already mentioned above. In this similar context, the company might take into concern the approch of Business Performance Management (BPM) based on which, it can manage the changes while making short, medium as well as long-term improvements and addressing the strategic issues along with operational concerns. In the contemporary business environment, the idea of BPM has gained its significance owing to various reasons, among which, controling their respective businesses or operational functions is noteworthy (Kellen, 2003). The prime characteristics of BPM are often viewed as reviewing the entire business or operational performance and most vitally, determining the procedures based on which, the desired business goals can be attained (Axson, 2010). The notion of BPM can certainly be used within the business environment of Comm Tech in the form of an analytic procedure, which will not only assist the company towards managing change or managing the improvement programs, but also assist in enhancing its operational efficiency through constantly focusing on quality aspects. Based on the above discussion, it can be apparently identified that Comm Tech confronted several strategic issues as well as operational concerns while performing its business in worldwide business market segments. The major problem was found to be related to its quality assurance limitations when producing OS 2012, which eventually affected the overall performance of the company at large. In this similar context, the notion of BPM would certainly help the management to keep monitoring the entire performance of Comm Tech in various ways, majorly including the development of an appropriate definition to organsiational as well as business goals, monitoring progress, particularly on such goals, developing the appraisal proceudre specifically relating to the employees and most importantly, incessantly looking after and mitigating the quality issues in the overall manufacturing and selling process among others (Samsonowa, 2011). It would be vital to mention in this regard that the notion of BPM would enable Comm Tech to measure its overall performance with the aim of solving the witnessed strategic issues and operational concerns through constantly checking on the factors like employee productivity, performance feedback along with evaluation, dimensions of employees’ chief job performance and making effective decisions thereon (Striteska, 2012). Apart from the notion of BPM, the strategic process of balanced scorecard can be adopted and utilised for measuring the overall performance of Comm Tech. From a critical point of view, the approach of balanced scorecard has been observed to aid in controlling as well as measuring the overall performance of the organisations in accordance with a pre-defined strategy formulated by these organisations. The notion of balanced scorecard can be used throughout the business process of Comm Tech in the form of strategic planning and as a management technique, which will not only assist the company towards managing change or the improvement programs but also contribute towards enhancing its operational efficiencies by constantly focusing on the quality aspect. It is worth mentioning that the aforesaid approach would be used for measuring Comm Tech’s performance and mitigating quality issues through certain different perspectives. These perspectives include financial dimensions, customer focus, business procedure designing and learning along with growth concerns of the workforce and the organisation on the whole. From the financial perspective, the performance of Comm Tech can be measured based on fiancials such as operating income and rate of return on capital employed among others (Blokdijk, 2008; Elegant MicroWeb, n.d.). From the customers’ perspective, Comm Tech’s performance will be measured on the basis of the proportion of market share acquired by the company, degree of satisfaction derived from the customers and level of customer retention competencies enjoyed by the company. With regards to the business procedure perspective, the entire performance of Comm Tech can be measured based on the quality as well as costs associated with the business procedure followed by the company. Finally, from the standpoint of learning and growth perspective, the performance of Comm Tech can be meausred on the basis of knowledge management, satisfaction derived from the employees and employee retention experienced by the company (Blokdijk, 2008; Elegant MicroWeb, n.d.). Thus, based on the above discussion, it can be affirmed from a broader understanding that the performance measures of balanced scorecard and BPM would not only enable Comm Tech to determine its current business performance but would also facilitate the company to address and mitigate the above identified strategic issues and operational concerns. References Axson, D. A. J. (2010). Best practices in planning and performance management: radically rethinking management for a volatile world. US: John Wiley & Sons. Abrams, R. (2003). The successful business plan: secrets & strategies. US: The Planning Shop. Blokdijk, G. (2008). 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