Free Parker Earth Moving Company Essay Sample
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Parker Earth Moving Company (PEMC) engages in the production of high-quality earth moving machines used in small business landscaping enterprises and homes. The company operates on a global scale, with one facility for manufacturing and distribution of its products placed it Reno, Nevada. In order to meet the customer requirements satisfactorily, it is vital to PEMC to address issues associated with limited space for production and storage for inventory, and a shortage of the qualified personnel for the production of small earth moving equipments. The sales forecast for the first quarter is 10,000 units on a monthly basis, implying that the firm must produce at least 10,000 units to meet the market demands. PEMC has hired a consultancy firm to analyze its system operation management to improve process. The team must conduct a number of consulting sessions for PEMC to make recommendations to improve the company’s process.
The requirements of the customer
There are three customer requirements that the firm must address. The first requirement that PEMC must deal with is the limited space used for production and storage of inventory. The second requirement is to increase the number of employees needed to meet the production requirements to satisfy the customers. This requires an efficient supply chain system that is responsive to the demands posed by customers (Russell & Taylor, 2009). The third customer requirement is to reduce the time required for employee training, which is needed to enhance the production of the Ultramover. In addition, the effective use of subcontractor A and Subcontractor B manufacturing firms offers an opportunity to increase the units of Ultramover produced within a small timeframe; PEMC can use this to reduce the production costs and offer the Ultramover at a relatively lower price than its competitors in order to achieve a sustainable competitive advantage.
The subcontractors have the capacity to meet the manufacturing and quality standard requirements of PEMC. Subcontractor A is recommended mainly due to the cost and the lead time associated with the production of Ultramover. It is vital for PEMC to adopt a cost leadership strategy by reducing the production costs. The firm can use this approach to reduce the price of the Ultramover and increase its market share (Russell & Taylor, 2009). In addition, the extra time that Subcontractor A takes to produce the item is adequate since it gives PEMC time to organize the transfer of the existing stock in the warehouse. PEMC also needs the additional time to increase the precision of aggressive production (Russell & Taylor, 2009). This is because having large numbers of products in storage is a significant issue for the firm because it results to extra storage costs and hinders inventory movement. The lead time advantage associated with Subcontractor B cannot be used to meet the customer requirements of PEMC because the existing storage requirements are currently dome using a leased off-site facility