Albatross Anchors part 3 - Case Study Example

? Albatross Anchors part 3 Introduction Being founded in 1976, Albatross Anchor operates as a family business in the USA. It was instigated by four people family members and currently performs with the manpower of 130 employees. The company has been engaged with the manufacturing and shipping of anchors in the wholesale market of the nation and other neighboring countries as well. Thus, the entire organizational process involves various phases which can be sorted as producing, storing or warehousing and shipping among others. With the intention of proposing the company to adopt changes, after taking certain beneficial strategic measures, the discussion henceforth will intend to address four challenges faced by Albatross in its current practices rendering recommendations to the identified issues. Furthermore, adhering to the changes recommended, the strategic selections will be justified along with a detailed plan of implementing those strategies and a timeline through Gantt chart. 1. The challenges for the company Albatross Anchors Challenge # 1: Cost Management Studying the current situation of Albatross, the production cost for mushroom or bell anchors accounts to $8.00 for every pound. Similarly, for snag hook anchors, the production cost amount to $11.00 per pound. As a result, the company has been recently witnessing a lowered profitability margin which further hindered its competitiveness by a substantial extent. For instance, the recent financial figures depicted that the profits for the company gradually diminished to almost 35% due to deficiencies in its operations. Hence, the company should intend to reassess the per unit costs incurred for the production of each category of anchors so as to monitor as well as control its profit margin efficiently. Furthermore, Albatross should also intend to examine its price per unit, offering certain allowances and discounts to the customers, which would yield better returns in terms of augmented market position and sales revenue (Deliz, 2011). Challenge # 2: Supply Chain Management The shipment processes of Albatross can be identified to take place in two dimensions, i.e. domestic and international. For domestic shipments, the company fundamentally focuses on using large trucks, whereas the products which are shipped in the international markets are carried either through railroads or ocean routes. It is in this context that the company needs to witness challenges in terms of legal barriers limiting the maximum weight to be shipped at a time. Owing to this particular reason, where on one hand the company needs to incur extra cost burden of transportation costs in case of railroads; on the other hand, it had to witness hurdles in transporting through ocean routes as well where the products were entitled to be initially shipped through rail to the dock and then loaded on the ship, which incurred extra labor costs for shipping goods in the international market. Furthermore, due to the increasing complexities in the shipping procedure, the organization also had to face hurdles in managing the manpower effectively. Hence, it can be recommended that the company needs to reframe its administrative staff arrangement along with absorbing more manpower in its transportation process. Although engaging greater manpower shall prove to be a costly venture in the short-run, it shall prove as highly beneficial in the long-run to gain enhanced sustainability and profitability minimizing the confusions arising in the shipment process. Again, as the company produces both domestic and international products incurring different production costs, it should intend to re-consider its pricing strategies which would neither hamper the interests of the wholesale customers, nor would inhibit the profit margin of the company (Rivers, 2012). Challenge # 3: Quality Management In relation to quality management, the products which are produced by Albatross, i.e. bell anchors and snag hook anchors, follow distinct procedures or mechanisms and techniques. For instance, the bell anchors are produced by a process called foundry where the ore is converted into a state of liquid and drizzled to molds. It is mainly used by marine crafts in fresh water. The other product category of snag hook anchors is produced by winding and repairing iron rods and flat irons giving it the shape of a hook which shows better results in salt water. Even though the company follows two completely distinct production processes for each of its product dimensions, only single undivided manufacturing area is used by Albatross. This in turn gives rise to wastage of resources and confusions in the working premises delaying the process of shipment. Thus, it is recommended that the company should intend to divide its manufacturing unit for a smoother production of the products. This in turn is likely to mitigate perplexities on the premises allowing easy monitoring and development in the entire process. Furthermore, the suggested change shall also assist in reducing wastage from a long-run perspective. Challenge # 4: Time Management As was mentioned above, Albatross produces two types of products, the bell anchor and the snag hook anchor. For producing these products, the operation department has been observed to take approximately 36 hours in order to switch from one manufacturing process to another. This in turn gives rise to the production costs along with wastage of manpower as well as resources. Therefore, the company should divide the two production processes where no switching over would be required along with purchasing advanced machineries to permit greater quantity of production within a stipulated time. 2.a. Five changes which need to be implemented i. With concern to the cost management practices of Albatross, the company should hire appropriately skilled people to supervise the two distinct processes efficiently along with rendering training facilities to the production staffs to yield better productivity. ii. The company needs to purchase advanced machineries for supporting its production quality which would yield better sustainability to the company along with advantages in terms of time efficiency and minimum wastage iii. Apart from the production labors, the administrative staffs of the company should also be trained after the implementation of a reframed, well-structured and organized operational procedure so as to minimize the issues related with rapid and efficient decision making iv. There should be separate departments to monitor the shipment processes for domestic markets and for overseas markets v. The prices for the products should further be structured in a balancing ratio with regards to the customer feasibility and market demand b. Three implications and three complications which may occur for the recommendations made Three Implications Three Complications Augmented sustainability owing to quality assurance Reluctance of the employees to adopt the changes causing time deficiency and wastage in the process implementation Refurnishing of the decision making procedure Requirement of additional cash flow in the initial phase Enhanced quality, time management and efficiency in the entire operational procedure Accurate identification of the skilled possessed by the human resources so as to determine the mechanism of training and recruitment procedure c. Gantt chart of Albatross Anchors In the first week the company needs to recruit employees in the newly designed production as well as operational process, either internally or externally after identifying the skills possessed by the existing team in accordance to the requirements of each particular department. In the second week, the company needs to purchase machineries to support higher productivity along with quality assurance in its production process. Simultaneously, in the 2nd week, the hired or transferred employees will be rendered with effective training facilities by conducting different sessions and seminars along with practical experiences which would further yield better productivity. Contextually, the duration of the training would be extended in the 3rd week. In the 4th week, the performances of every department, classified in the newly designed operational framework, will be measured so as to identify any hurdle at the primary stage and likewise mitigate it from a long-run perspective. In the 5th week, the company should obtain financial report of its product costs for both the product categories in order to determine the product pricing strategies. It is worth mentioning in this regard that while designing strategic plans for pricing, the company should take into concern the customer requirements along with the quality assured and its profitability margin. In the 6th week, company shall intend towards organizing better transportation system by purchasing improved trucks as well as ocean crafts which could carry the overseas products to the wholesalers in shorter period of time incurring lower shipment costs. Owing to the complexity of re-organizing the entire transportation system, the process can be extended in the 7th week so that the quality products are safely carried in domestic and overseas markets. Ultimately, in the 8th week, a further market survey would be needed to gain adequate understanding of the prices charged by competitors, both in the domestic and international markets along with obtaining awareness concerning the customers’ response to the augmented product quality. This would further assist in identifying any limitation of the re-developed process and thus support in mitigating such hurdles at an early stage. Conclusion Albatross is a small-sized wholesale business organization. The company has its limited number of divided in two categories, i.e. the bell or mushroom anchors and the snag hook anchors. It is in this context that owing to the distinctiveness to the production processes followed in the case of each product category and the inefficiency of its operational as well as administrative management practices, the company needs to alter its entire organizational process. Certainly this would give rise to particular complexities; nevertheless, it shall prove highly beneficial in yielding better sustainable growth in the long-run. References Deliz, A. ( 2011). Unit three written Assignment. Retrieved from http://www.scribd.com/doc/61061506/Astrid-Deliz-Unit-Three-Written-Assignment-MT435 Harper, L., Mudd, T. & Whitfield, P. (2002). Rough Guide to New Zealand. United Kingdom. Rough Guides. Rivers, D. ( 2012). Unit 3 Albatross Anchors. Retrieved from http://www.termpaperwarehouse.com/essay-on/Unit-3-Albatross-Anchors/68210 Bibliography Mata, V. ( 2011). Albatross Anchor Case Study. Retrieved from http://www.termpaperwarehouse.com/essay-on/Albatross-Anchor-Case-Study/41768 Read More