Globe Construction Company Case

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I.Point of View
We take the point of view of the top management in resolving the problem of the Globe Construction Company particularly in their operations policies & procedures.
II.Central Problem
What system or design should the Globe Construction Company develop in order to improve the effectiveness & efficiency of their operations?

III.Case Facts:


Was established by Mr. Eduardo Concepcion & has been in the business for almost 40 yrs. •During the 70’s & 80’s, the company has been servicing mostly large government projects where they get the bulk of their profits. •But not until the Aquino’s regime when projects for private sector dominated government projects causing them to reduce their margins due to tight competition. •Central warehouse is located in Antipolo while Head Office is located in Paco, Manila with distance proximity of around 20-25km. •10M worth of materials in the Central Warehouse.




1.Wider clientele for construction service (government & private sectors) 2.Advancement in technologies
3.Calamities (more projects due to damages)Threats

1.Government policies
2.Other construction companies
3.Calamities (delays on on-going projects)
4.Inflation in the prices of construction supplies

1.Established company (40yrs)
2.In demand construction business
3.Sufficient manpower
4.On-going large projects (18 w/ at least 100M bid price) SO Strategies

1.Familiarize the manpower to the newly infused systems that can improve the operations of the company. 2.Explore more clientele in both government and private sectors by offering lower bid price.

ST Strategies

1.Get the project deal by bidding with lesser price.
2.Purchase supplies under long term PO basis to benefit from the price stability.


1.Concentrated on Government projects
2.Poor policies & procedures in their operational system
3.Poor communication system between the project managers & purchasing department.WO Strategies

1.Make use of new approach (EOQ and online purchasing systems) to enhance the productivity of the company. 2.Conduct regular coordination meeting for requirement updates of the Project dept. and PO status of Purchasing dept. WT Strategies

1.Schedule for monthly forum to have a venue for discussion, evaluation and performance measure of the company.

IV.Alternative Solutions

1.Retain & improve the current organizational set-up by the inclusion of systems & procedures among the department. This can be done thru: a.Grouping the buyers per project category to streamline reporting & monitoring updates on project requirement/purchase orders. b.Regular coordination meeting between the Purchasing & Construction departments.

2.Restructuring of the operations department by placing the Purchasing department under Construction department in order to facilitate faster approval of POs.

3.Restructuring of the operations department with Construction department directly reporting to the Purchasing to avoid reckless purchases & cost overruns.

Alternative AdvantageDisadvantage

1Purchase managers will have more focus in handling transactions due to specificity of projects There will be control in the management of funds
The management can easily identify the responsible person and address the issues in case of delays and other concernsWould entail additional investment with the infusion of additional position in the system Would cause delay in the processing of PO if not properly monitored & communicated

2Faster approval of purchase orders that can influence faster construction of infrastructures.The construction department may have the tendency to over buy construction supplies

3Help avoid reckless...
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