Pressure Vessel Manufacturer: Oceanic Inc - Case Study Example

 Pressure Vessel Manufacturer Case Study Introduction Oceanic Inc., an American based company intends to purchase a pressure vessel from one of the most competitive vessel manufacturing companies. Oceanic Inc. is an engineering company that charges its procurement department with a challenging task of identifying the most suitable company to supply the vessel under the specifications given. Areas to Investigate During the Visit Areas that Oceanic group highly required to investigate in its two visits mainly depended on certain factors. Such factors involve efficiency and effectiveness of the suppliers to deliver the pressure vessel within the specifications of Oceanic Inc. Each company’s quality control, past experience with such pressure vessels, general shop appearance, updated laboratories, ventilation, adequacy of lighting, inspection facilities, neatness and overall appearance of the supplier buildings. In addition, Oceanic group also focused on the availability and co-ordination of staff, efficiency and effectiveness of the available machines, production departments and material control systems. Evaluation of Suppliers Atomic Products Company Atomic Products Company is an average firm with great potential and capability. The company has adequate facilities capable of efficiently and effectively manufacturing vessel Oceanic Inc. requires. The facilities in Atomic Products Company have great ability to turn out comparatively more work in a considerably less time, making it efficient (SPVM, 2014). The company therefore shows great potential of handling any vessel size beyond even the one required by Oceanic Inc. In addition, the company displays a generally excellent appearance. It has clean isles, adequate lighting and ventilation together with modern laboratories. Further, Atomic Products Company notably has relatively good inspection facilities with extremely neatly appearing and well-ordered building. Moreover, Atomic Products Company also has both quality control and inspection departments that have proper staffing and updated equipment as well. Atomic Product suppliers, furthermore, proved to be sufficient in the chemical laboratories and metallurgical areas with good numbers of staff that are capable of providing enough test specimens to Oceanic Inc. as per the specifications. However, Atomic Products as suppliers also have inadequacies. Such limitations include its lack of experience in producing larger vessels similar to the size that Oceanic Inc. required. Secondly, it lacks the experience with Oceanic Inc. products to give it an upper hand in winning the contract. Atomic Product does not have enthusiasm and commitment more so from its top management as well as dangerous and frequent workers strikes. Finally, the Atomic products suppliers failed to show incoming materials control considered important for potential oceanic work. Nuclear Vessels Inc Nuclear Vessels suppliers show massive experience with the Oceanic pressure vessels making it a top contender for the Oceanic Inc. contract. Although most of its facilities are old aged with smaller capacities, such facilities are sufficient to handle the Oceanic Inc. task. Nuclear Vessels suppliers have a variety of machines in its subcontracting divisions such as boring mill that is large and vertical at El Paso, Texas, which is a subsidiary plant. Contrary to Atomic Products suppliers, Nuclear Vessels Inc. lacks adequacy in working conditions such as cleanliness, lighting, heating and ventilations. Nuclear Vessels suppliers also have higher estimated contract cost because it requires more man-hours to complete making the vessel. More hours are a consequence of its machines that are less adequate and aged for the Oceanic Inc. job. In terms of equipment available, Nuclear Vessels have pressure vessels that help in rolling and formation of the vessel. Nuclear employees do not have unions since they operate on profit sharing plan with the plant. Another outstanding feature that Nuclear Vessels celebrate is that the plant has effective control existing between the shop and management. Task force head who is a project engineer carries out proper co-ordination between quality control, supply, expediting as well as scheduling by assigning a member from each department a task to accomplish (SPVM, 2014). This task force has the responsibility of making the entire project follow up from the onset to the end and finally informs the project engineer about its progress on the daily basis. In addition, Nuclear Vessel suppliers enjoy massive experience after notably constructing large vessels including one that is larger than the one required by Oceanic Inc. This gives the supplier an upper hand in winning the contract over its rival Atomic Products. Nuclear Vessels gained enormous experience due to the problems it ran through during the manufacture of the large vessel. Consequently, Nuclear Vessels Inc. changed its organization to enable close follow up in the production process. For better material control, Nuclear also changed its records and paperwork by marking each piece of material for its intended use in the project. The step taken makes it easier to identify and avoid confusing materials in the process of production. Despite its large chemical laboratories and metallurgical, the facilities inside it remained very old. Company with Better Offer Both Nuclear Vessel and Atomic Products Companies had better offers and shortfall in almost equal measures. However, Atomic Products Company had a relatively better offer compared to Nuclear Vessels because it provided a favorable total price at $1,232,000 compared to Nuclear Vessel’s $1,560,001. Estimated rates for Nuclear Vessels Inc. looked comparatively higher than that of Atomic Products. After close evaluation, it was evident that the higher costs came to compensate for the long man-hour resulting from the effects of old aged facilities and machines. Further, Atomic Products gave a better offer because it has the ability to deliver the desired vessel with the right specifications due to efficiency of its new facilities. The machines are capable of working at faster rate to deliver at the prescribed time. Better Supplier Company Nuclear Vessels Inc. is the favorite candidate for the contract of pressure vessel for several reasons. Nuclear Vessel Inc. boasts of adequate experience when it comes to constructing large pressure vessels similar to the one required by Oceanic Inc. Nuclear Vessels is equipped with the challenges faced during the manufacture of such a big vessel as well as ways of curbing such challenges. Consequently, only Nuclear Vessels Inc. can deliver the pressure vessels as required by rigid specifications of Oceanic Inc. Furthermore, it is better if Oceanic Inc. would choose a company with already established business relations and experience rather than building new relationships and gambled experience (Branch, 2009). Secondly, the enthusiasm that both the entire staff and top management of Nuclear Vessels Inc. enjoy is an assurance that the staff has great commitment towards accomplishing vessels project. The company president, vice presidents and most top officials further showed commitment when they all attended the Oceanic Inc. group visit giving room for extensive and comprehensive discussion (SPVM, 2014). The commitment is an assurance that Nuclear Vessels Inc. is the partner that will give full effort to the project from the onset to its termination. There is more likelihood of success in a contract where there is enthusiasm than where there is none. Another reason why Nuclear Vessels Inc. beats Atomic Products is because it embraces the idea of total quality management within its operations. Total quality management is a full guarantee that its final products must be of top quality as well. In its operations, Nuclear Vessels integrates quality control to provide highest quality possible finished products. For example, the company has a project engineer who heads a task force that oversees all the pressure vessels production operations to guarantee top quality and value. Moreover, Nuclear Vessel Inc. has its other divisions in which it has the ability to subcontract some of its projects tasks. Consequently, the amount of time and operating cost spent on producing pressure vessels reduces significantly. Subcontracting ensures that the project work handling is a preserve for the professionals hence goods obtained have greater design and quality. Recommendations Nuclear Vessels, Inc. being the best company to take the supply contract, it should make various remedies to its facilities where there are weaknesses. 1. Nuclear Vessels Inc. should purchase new and up-to -date facilities and machines to improve on its efficiency. 2. Purchasing new and updated facilities should enable Nuclear Inc to cater for the high cost of production, making it highly affordable and time effective. 3. Nuclear Vessels, Inc should also give full guarantee to Oceanic Inc because it is capable of achieving high quality. 4. Oceanic Inc should settle for Nuclear Vessels, Inc for guaranteed high quality pressure vessel at the specified time. References Branch, Alan E. (2009). Global Supply Chain Management and International Logistics. London: Routledge. Selection of Pressure Vessel Manufacturer (SPVM). 2014. Anti Essays. World Wide Web. Retrieved from December 23, 2014. http://www.antiessays.com/free-essays/Selection-Of-Pressure-Vessel-Manufacturer-380775.html Read More