Analysis of Draper Engineering - Essay Example

Name Course Tutor Date Introduction Modern day business is dynamic, and the organizations are constantly working to make sure that they are not only competitive, but they are making profit. The strategic management and strategic thinking play the main role in the success or failure of a business. Strickland and Thompson (2003, as cited by Unhelkar, 2009), pointed out that a strategy of a company comprise of business approaches and competitive action employed by the management with the aim of pleasing the customers and maintaining their competiveness and attain the goals. Strategic mismanagement comprises of decisions and actions that can be used to devise and implement strategies, which can provide competitive advantage between the organization and the environment (Unhelkar, 2009; Brown, et al., 2013). In this respect, organization should have good knowledge of the present condition of the business and the potential opportunities that may be exploited so as to realize its goals. The main aim of strategic management is to provide a roadmap for utilization of its resources depending on the internal and external factors that can affect long term goals. In other words, the condition of the environment, whether it is complex or stable would affect the efficacy of the strategy assumed by the business unit. Thus, in a stable environment, the strategy is likely to work, but dynamic or complex environment, the case may be different (Unhelkar, 2009). In a dynamic environment, organizations need to revise their strategies regularly so as to maintain their competiveness and profitability. This is done by constant monitoring of the environmental change with the aim of developing effective strategies. In this paper, SWOT analysis of would be applied on Draper Engineering in order to identify ways through which the organization can improve on issues identified in strategic analysis. In addition, ways in which the organization can be reorganised in relation to maintenance, as well as how to deal with contracted companies in relation to performance would be discussed (Scott et al., 2008). 1. SWOT Analysis of Draper Engineering Organizations undertake business analysis through stakeholder involvement with the aim of formulating business strategy. Thus, strategic analysis is the main component of strategic planning (Hill et al., 2007). What performing strategic analysis, the organization should seek to get an informed knowledge of the environment and how to interact with it. The information obtained will be used to improve the effectiveness and efficiency through improved utilization of the company’s capacity in terms of competence, resources and capabilities. Strategic analysis is used by an organization to identify relevant organization goals and objectives that can facilitate decision making process (Scott et al., 2008). It is used to predict what may happen, evaluate on how it may occur, and make the preparation for it. Internal analysis evaluates the internal variables so as to identify strengths and weaknesses, while the external analysis assesses the external environment in order to evaluate the future situation and the probable effects on the profitability and competiveness of the organization. The main tool used in strategic analysis id SWOT analysis. It assesses the strength, weaknesses, opportunities and threats on the firm (Hill et al., 2007). SWOT analysis is a tool used understand the business situation in decision making process in order to deliberate on that can be done well, while minimizing the weakness to enable the available opportunities (In Osman et al., 2014). In SWOT analysis, the company identifies the objectives and favorable and unfavorable condition in or outside the firm. The strengths are those things which give the firm a competitive edge over their rivals. Weaknesses are those factors that put the firm in a disadvantage position over other firms such as those things that other firm are good at. Opportunities are factors that can be utilized by the firm to its advantage. These include technology, market gap and socio-cultural factors that are favorable to the firm. Threats are factors which may not be favorable to the firm such as the environment factors that can affect the profit and competitiveness of the firm (In Osman et al., 2014; Rouse et al., 2011). SWOT analysis for draper engineering is provided below. Strengths 1. The firm has highly regarded customers like major European car makers and truck manufacturers from America 2. It has devoted labor force 3. There is low Staff turnover especially in managerial and technical level. 4. The firm uses up to date manufacturing processes that are rarely used. Weaknesses 1. Poor planning and coordination in project development 2. High staff turnover in production section in the last five years 3. Poor plan for maintenance which has led to late completion of maintenance 4. Departure of technical grades and management staff after appointments of operation managers 5. Friction between the members of due to different skills levels amidst the shift engineers and electricians 6. Poor operation performance Hardy contractors, causing damage of stock and late deliveries stock. 7. Problems resulting from outsourcing the site services to Bang IT and Bend IT leading to late completion of jobs, which has affected production. 8. Reduction of high staff turnover failed. Opportunities 1. The technology used in manufacturing by Drapers Engineering is not widely used, thus providing competitive advantage for the firm. Threats No threats was identified in the case study provided How Draper Can Improve Five of the Issues Identified From the SWOT Analysis The issues identified in SWOT analysis can be put into different categories that include issues related to organizational structure, logistic issues after outsourcing logistic operations to Hardy, problems related to outsourcing site services to Bang IT and Bing It Company, inefficiencies in the organization and personal problems. All of these issues are crucial and needs to be addressed in order for draper to maintain competitiveness and profitability. a) Improving Logistic Operations Logistics include information and material flow in and out of the firm (Havaldar & Cavale, 2007). It includes movement of product and services to be rendered through proper handling of production, storing goods, and delivery to the customers. The importance of logistics has been growing because companies are going global to realize more production, acquire new markets and tab technology beyond the physical borders. The common problems which may arise in corporate logistics are wrong and delayed information, unfinished services, inefficient operations, and damage product (Bryson & Daniels, 2007). In the present case, the logistic operations are out of order, and the third party, Hardy Logistics ltd is responsible for this mess. The existing issues include late deliveries to the customer and damaged good after deliveries. Logistics is crucial in business, because it plays a role in shaping the image of the Draper Engineering business. For example, late deliveries will result in customer dissatisfaction, which affect the competiveness and profitability. The problems which are likely to be encountered in a corporate logistics, as in the case of Drapers include inefficient and slow operations and damage of products. This has resulted in high cost of operations, poor flexibility when dealing with changing demands and failure to provide high-quality services. In spite the fact that outsourcing logistics is costly, it enables the company to focus on the main competences. The solutions in logistics operation can be divided into three sections. This include: creating in-house logistic department, renegotiate the contract with Hardy logistic through setting of the least service level for undamaged good (Havaldar & Cavale, 2007). b) Improving Inefficiencies in procedure and Processes Improvement in efficiency improves the overall productivity and helps a firm to be more competitive. In draper engineering, there is inefficiency in organization processes which include planning and coordination of work associated with the project, developing engineering by buying new equipments without the knowledge of its purposes. Another problem related to inefficiency resulting is poor maintenance leading to late completion. The company should adopt process management where they can be able to control, monitor and improve the production processes (Bonham, 2008). By analyzing the current inefficiencies, a framework can be devise that shows the strategic plans to be used by the company to coordinate its activities required for plans to be executed. The outcomes of the plans can be monitored using feedback. A plan can be executed at a functional level; however, coordination can be undertaken at the organization level. In draper engineering, it is ideal for the matrix organization structure to deal with planning and coordination of activities required to solve the issues, but the implementation requires a collaboration of the functional units. This will not only eliminate inefficiencies in the implementation of the organization processes, but it will also ensure coordination and efficiency in the transfer of information within the organization (Sims, 2002; Brown, 2013). c) Improving Site Operations Site operation is very importance in the production process as it affects the production process, as it is a core part in the operation of engineering department. Site operation involves task scheduling, design and productivity with aim of accomplishing performance that accomplishes the clients desires within a time and budget limit, with acceptable workmanship and quality of materials. The main objective is good performance, but in order to achieve them is especially complex, since it is affect by varying characteristics. Thus, the organization should be fully involved in the management of operations in the site. In the case of draper engineering, the services at the site are in disarray as the jobs are completed six months behind schedule (Pride et al., 2013). Thus, it is the responsibility of Draper Engineering to formulate strategies which are aimed at reducing the production problems in the site. This can be addressed by revising the contract agreement with Bang IT and Bend IT with the objective of improving the services in the site by the contractor or by establishing in-house team which will take care of site services. Since the later solution may not be viable in a short term considering the time and the cost, it will be advisable to ensure that Bang IT and Bend IT improve its performance in such a way that the firm is not affected by the poor performance. d) Reducing Personnel Issues at Draper Turnover is serious problem in a corporate setting as in the case of Draper Engineering ltd (Gallo & Reichel, 1999). This is may be caused by change of employment and presence of individual or family issues. The turnover is costly to a firm and can significantly affect the performance of an organization either directly or indirectly. It affects the both time and finance which in turn affect the overall production of the firm. Direct cost may include recruiting and training of new individuals. Indirect cost includes reduced production due to low employee morale and increased workloads on the employees (Branham, 2000; Sims, 2002). To address this issue, the company should begin by establishing the possible causes of turnover in the firm which may include the labor market and economic condition which can be solved by improving the working conditions in the firm. Other causes can easily be managed. In the present case, it includes poor communication, poor supervision, monotony and inadequate training of maintenance personnel (Gallo & Reichel, 1999. The company should develop the retention plan, by assessing the current situation and measuring turnover rate in the company, and by measuring the cost of turnover. This assist in developing the retention plans, strategize for anticipated turnover and changing labor force culture. There should be more focus on the quality of work life which is very important to employees (Branham, 2000). In summary, Draper engineering should hire qualified workforce and continue developing their careers through skills training program or career development program so as to eliminate friction between shift technicians and shift engineers. The opinions of employees can also be very crucial in management of the issue, because the employees must believe that their contributions heard for their. Loyalty and trust are two way and open communication encourage employee input. Strategic compensation is also very crucial. These include bonuses, incentive compensation, and health and welfare benefits. Others include leave and vacation policies, health insurance, retirement and investment plans (Sims, 2002). How Draper’s can Re-Organise the Maintenance Department to Improve Efficiency The organization structure is the manner in which a firm organizes human resources to perform its work so as to achieve the goals (DuBrin, 2009). The departmental or organization structure is directly related to efficiency. Communication is complex in a large organization, in case of decision making. Therefore, procedures are set which allocate responsibilities for different functions. The efficiency can also be improved by incorporating lean operations to business organization. Due to the fact that human resource is responsible for the largest expenditure in an organization, the firm should find better structure that can minimize human resource with maximum profit. The problems in maintenance in drapers emanate from the structure of maintenance. Thus, they should reorganize the structure of maintenance to ensure efficiency in operation. The management should identify redundant processes that minimize the profit, and ensure the resources potentials are maximized, as well as creating a new work system that can ensure quality production. The efficiency is also affected by the organization culture and the morale of the employee (De, 2011). For example, if the Draper Engineering inflexibility may be the reason for the inefficiency. Efforts meant to improve efficiency should be done across the system, and flexible organization structure that enable transparency and free flow of ideas should be adopted. The maintenance structure should be structured so as to create less hierarchical and flexible management. The existing line of command begins with shift maintenance personnel reporting to shift manager, who also report to shift manager, then production manager. New functional unit should consider reducing the hierarchy such that maintenance personnel can report maintenance manager who in turn report to production manager as shown in the figure below. It is also necessary to group maintenance personnel basing on the level of their skills, so as to eliminate the potential causes of conflicts among shift maintenance personnel (De, 2011). Other factors which may affect efficient production should also be addressed when restructuring the maintenance department. Such factors include adopting decentralized decision making process to enhance efficiency, encouraging teamwork, and adopting efficient procedure and processes through which shift personnel has similar skills managed by immediate maintenance manager. In addition, the maintenance manager should not just delegate duties and wait for reports. Decentralized decision-making will eliminate potential delays related to top-down decision-making. In this respect, shift maintenance personnel will make appropriate decisions without waiting to consult their managers (DuBrin, 2009). How Draper’s should deal with Bang IT and Bend IT in order to improve the performance of this contractor The performance of a sub-contracted company affects the overall image of the company. This is the reason why drapers have encountered problems after contracting site services to Bang IT and Bend IT Company. Therefore, Draper should develop a strategic solution such that the contract cannot negatively affect the performance of the company. Draper engineering should sign Performance based contracting (PBC) with Bang IT and Bend IT to encourage better outcomes and quality services (Griffiths, 2005). PBC include performance measures in the contract agreement and attached compensation to the measures like renewal, extension and payment based on the performance. PBC may include the following specification: a) quantifiable performance standards in terms of time, quantity and quality, b) incentives related to the performance, c) specific process for assessing the performance of the contractor, d) a statement that specifies the work in terms of quantity and performance (DeMoss, 1998). PBC modify the specification technique, from focus on design, that include input and process to performance focus such as focus on the outcome, quality and the output, by clearly stating the desired outcome that are required from the contractors, while allowing the contractors to prescribe techniques to accomplish the objectives. PBC will enable Draper managers to detail the desired results for contract services, by focusing the attention of the contractors on the result of the delivery of services. This will encourage Bang IT and Bend IT Company to promote quality services, better outcomes and efficiency by attaching compensation to performance. In addition, the contractor is given more freedom in services process, and the contractor gets more energy and time to design innovative and quality services to satisfy the need of the clients. The contract encourage efficiency with less work done, by requiring the contractor to work for the desired output , which increase the productivity, less monitoring and reduces the cost of management (Griffiths, 2005). In summary, PBC will provide Draper Engineering with a framework for describing the performance requirements to be satisfied by Bang IT and Bend IT Company. The risk is also transferred to the providers of the services, thus performance is guaranteed. The agreement will also stipulate the remedies for non-performance like price reduction in case of failure to meet the requirements (Griffiths, 2005). On the other hand, draper engineering may decide to give Bang IT and Bend IT another chance to rectify the mistake without increasing the fee. References Bonham, S. S. (2008). 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