Operations and process Management
March 30th, 2011
Table of Contents
Environmental and Root Cause5
Alternative and/or Options7
Recommendation and Implementation8
Monitor and Control10
Mr. Li has an opportunity with Unicon to direct it in a new focused direction. With its competitive advantage it has established with the Hong Kong Housing Authority (HKHA). I recommend pursuing the blanket approval process with HKHA. These efficiencies could prove beneficial for both parties as this will greatly reduce lead time and costs. Façade and slabs is the growing trend in the industry and will allow Unicon to take advantage of the cost savings that come with it. * No need for engineered documents, saving on time and engineering costs. * Job security
* Operational efficiencies
* Holding inventory
* Reduced lead times
* Product standardization
* Increased quality
The tradeoffs that implied with this move is worth the risk of this approval process. This could be savings upwards to HK150,000 per block. An approximate saving of over 1 million based upon the 179 blocks per year projection from the HKHA. Once this approval is agreed upon and the contracts awarded. I recommend a detail review of Unicon current product lines and completely outsourcing the stair production line. After a 6th month time, I recommend we review our production efficiencies and look into expanding our production facility as our three remaining products are now made-to-stock.
There are several issues that need to be addressed that will determine how Unicon will be successful moving forward. 1. Should Unicon decide to increase its current plant space to be better prepared for future business, or take full advantage of the current boom in Hong Kong and not miss out on the current opportunities in the industry? With Unicons current product lines, Façade, slabs, stairs and portioning walls. Increasing Plant space would be costly and could possibly jeopardize current opportunity for business. However, this decision would solve a long term issue and would allow Unicon to be better prepared to grow as a company. 2. Would it be beneficial for Unicon to pursue a blanket approval process with their current number one customer, the Hong Kong Housing Authority (HKHA). With a recently announced four year construction program that will indict contracts for a total of 179 blocks, a blanket approval could prove very lucrative as it would save dramatically on costs and time. This could also allow Unicon to pursue industry-wide standards for the precast industry. The HKHA does have the authority to approve this type of proposal if it was convinced of its benefits. This move would be putting a lot of focus on one customer, leaving many opportunities for the competition to acquire the other projects/customers. Unicon will not be able to devote full attention to all of its current product lines, and has limited space. 3. Currently Unicon has 4 main product lines. Façade, slabs, stairs and portioning walls. Unicon began its foundation with portioning walls, it is slowly becoming the legacy product as more and more operations are leading to precast structures. Should Unicon proceed with all four product lines or focus on three or less products that are becoming more recognized. This would have short term implications as the resources saved could be better used in another product line. Environmental and Root Cause
Mr. Li must take a look at the industry and where it is going to be in five, ten or even twenty years. What will Unicon need to do to stay competitive in the industry and be “one step ahead” of the competition? Lets first take a look at Unicons current products.
Products| Pros| Cons| % of Sales|
Partitioning Walls| * Still used regularly * Can be...