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Signal-Tek Corporation - Case Study Example

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Signal-Tek Corporation has a subsidiary operating in Denver Colorado that generates approximately $30 million in revenues primarily from signal generators. Its supply department at the Denver division consists of a supply manager and a staff of five who are experienced buyers that lack a formal engineering background…
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Signal-Tek Corporation
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Download file to see previous pages Two larger instrument manufacturers have been taking some of the division’s market shares by offering low-cost products at a quicker rate. STC has been unable to keep up with the competition resulting in a reduction in their workforce by 15 percent. In 2002 STC was awarded a contract with the U.S. Army by offering the lowest cost on signal generators. However, their calculated costs were based on old data. Their plan is to produce newer and more efficient models. Major Problem STC’s first major problem was their lack of focus on timely goals and their inability to produce low-cost, solid-performance, and high-reliability instruments. Due to the aforementioned, larger manufactures are taking over their division market shares and STC’s work force had to be reduced by 15 percent which also reduces their rate of production. Secondly, the supply department does not have a formal engineering background making their situation worst when compiled with the fact that there is no cohesion between the engineering department and themselves. For low-cost and efficient production of quality instruments both the expertise of the engineering and supply departments are needed to work collaboratively together from beginning to end. Lastly, STC should have never made a bid with the U.S. Army based off of old data for material and production costs. Possible Solutions/Alternatives A. The engineering department collaboratively working with the supply department can reduce costs and improve efficiency. B. Research and an assessment of production should be implemented before any new project and an assessment should be conducted on why the organizations old methods were not working. C. The engineering department collaboratively working with the supply department while conducting research to produce better results would be the best alternative. D. The advantage of both departments working together would be the result of better efficient instruments offered at a lower-cost. The disadvantage may be the clashing of ego’s that one department knows more than the other. The advantage of taking time out to conduct research and do an assessment would be the result of a better understanding of the situation at hand. The disadvantage of this would be biases getting in the way of containing valid facts. Choice and Rationale The best choice would be to start at the bottom level and get the engineering and supply department to engage in their projects together. I would set up a mandatory meeting for these departments and list the advantages of both working together and the great outcome it would produce for the organization as a whole including increased job security. Questions 1. Early supply management involvement can assist in low-cost and timely new product development by using their buying expertise to spot the best quality deal. 2. Supply management’s involvement enhances an early supplier involvement program by giving first-hand knowledge on their expertise of buying. The potential benefits of this are reducing costs and improving efficiency which creates better job security and a healthier work environment. 3. The division can increase cooperation/communication between the engineering and supply departments by first establishing a meeting and presenting factual data on the benefits of their collaboration which includes increased job security. 4. Standardization will greatly improve the new product development by keeping everyone on the same page which decreases confusion and increases efficiency. 5. More effective supply management involvement changes engineering’s role by adding buying knowledge to their list of skills. 6. The division can help to expand supply management’ ...Download file to see next pagesRead More
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