Csu Mba - Case Study on Advance Packaging (M) S/B

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SME Cloud or Not?

Abstract - Advanced Packaging Technology (M) Sdn Bhd is a “small-medium” enterprise, or SME whose business is in packaging consumer products with an annual turnover of US$ 7.5 million. Like many small businesses in the industry, APT started out 30 years ago. Its IT system primarily consists of computers and a broadband connection with little or no integration across functions and departments. This has long supported the business that has until recently relied on near obsolete plant and machinery. As APT upgrades its plant and machinery in response to improved technologies and customer needs, it is our contention that the company’s archaic stand-alone IT application model will no longer be sufficient to support the demands of a competitive environment. A review of the company’s business processes and desired outcomes was carried out before comparisons in productivity gains and cost efficiencies were made between an upgraded in-house enterprise resource model versus an outsourced cloud model. It was found that the latter, besides being less capital investment intensive initially, would also bring greater productivity gains and significant cost efficiencies after process redesigns. It was helpful that the outsource partner already had its own enterprise software that was able to support the needs of multiple companies in the industry which allowed further cost savings.

1. IS CLOUD COMPUTING FOR ADVANCED PACKAGING TECHNOLOGY?

Experts disagree on its exact definition, but most concur that cloud computing includes the notion of web-based services that are available on-demand from an optimized, and highly scalable service provider. [1]

In other words, instead of designing, developing, implementing and maintaining IT services “in-house”, whether web-based or otherwise, there exists an alternative of outsourcing these services to a Cloud vendor that can bring benefits of resource optimization, business process efficiencies, scalability as APT’s business grows, improved customer relationships and cost efficiencies that going completely “in-house” is less able to provide. It is important to recognize that an enterprise like APT will not require the entire arsenal of cloud services available at its disposal as there are considerable trade-offs based on the company’s current size and financial means. It is therefore likely that a “hybrid” of both in-house and outsourced cloud capabilities (even Google Cloud can be “free”) is possible to implement. So the methodology in choosing from a host of available options will first consider APT’s business (process) application criteria before moving on to technical application criteria.

INTRODUCTION & OVERVIEW

Advanced Packaging Technology (APT) is a small enterprise that produces high-quality flexible packaging materials for snack foods, instant noodles, sweets, confectionery, liquid condiments, frozen foods, spices, beverages, milk powder, edible oil, rice, medical/surgical products and pharmaceuticals in the region. Its top customers include Unilever, P&G, Dutchlady, Ajinomoto, Lipton tea, Gardenia, Nestle & others. The product range of flexible packaging material comprises both single and multi-layers that carry appealing designs. Clients are able to order custom-made products through close consultation with the company. APT tries to bring exceptional quality and customer service to the clients.

The company has the following departments: purchasing, finance, production, warehousing, quality assurance, sales & marketing and HR/admin. The general manager, sales director and production director reports directly to the managing director. Finance, HR, quality assurance, purchasing and warehousing departments report to the general manager. Sales department comprises sales (international and domestic) and planning units while production department consists of printing, dry lamination, extrusion lamination, slitting and bag...
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