PacSci has been a successful medium size aerospace/defense company. It has been in business since 19760s. (1) The company has very good reputation in price and quality. However, it always has problem with OTD (on time delivery). Ten years ago, the OTD problem was not an issue, because there weren’t too many competitions. But in the last few years, due to stiffer competitions, OTD has become a big issue and been hurting the company’s sales. And lots of loyal customers slowly turned to its competitors.
Several problems contributed to OTD have been identified by the management of the company. The first one they identified was the failure to recognize the lead times of the raw materials. The purchasing department always had to order materials at the minute when the parts in the stock room were almost empty. The company had to pay extra to expedite their orders, which drove the company’s operating cost high. Notification between Stock room personnel and purchasing department was not automated. And the receiving department didn’t notify the stock room when they received raw materials packages. Another one was no automated process in place across the company, too many manual entered communications between departments. Some sales men made unrealistic delivery date to customers because they couldn’t access older sales order information. The engineering projects took too long to be transferred to Manufacturing because of lack of project management. Lastly, the manufacturing department still relied on too many manual labor steps in manufacturing process. (2)
The management decided to implement Microsoft ERP across the whole company to stream line their Supply Chain Processes so that the inventory control can be managed, and the purchasing department can order the raw materials when they see orders come in, receive automatic notifications from stock rooms. The shipping and
Citations: (1) http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=118423755 (2) Narrated by former employee of PacSci, Don Yang