Free Business Dissertations - 1.) There Are A Number Of Ways To Assess The Success And Potential For Even
1.) There are a number of ways to assess the success and potential for even greater achievement of Programmable Logic Controllers at Hypergol. One method that properly addresses key variables in this scenario is to utilize the manufacturing audit framework which is a synthesis of the work of such luminaries as Hill, Skinner, and Wheelright (Platts, K. & M. Gregory 1992, pp. 32-33). In this framework, the manufacturing system of choice is based upon key variable such as speed, cost, quality, flexibility, suppliers, and capacity among others. Each of these choices are contingent upon the amalgamated forces of what the market wants, how the system performs and balanced by the existent and potential opportunities and threats. Of all these factors, it is not possible to indicate one factor weighs more heavily than another; to do so would be to defeat the purpose of a contextual perspective of the a given firm in a specific market(s) desiring to achieve a certain outcome with specified inputs and tolerances.
Despite these situationally defined criteria, there exists one common benchmark standard for success: firm profitability. With this in mind, the real outcome of the contest now becomes the ability of Hypergol to assess and meet the markets desire for product. Though the case presents only the barest of indications of what the market wants, by closely examining the data given for each for the PLC models, it seems a reasonable assumption that certain models are demanded more and also seem to be within the ability to the firm to produce and sell them without the expenditure of a disproportionate amount of resources. The table below illustrates this fact:
Model
%Revenue
Revenue (000 £)
SysHours
% TotHrs
% Rev / % Hrs
P
3.2%
1970
29950
8.9%
35.66%
M
17.7%
11000
48125
14.3%
123.93%
C
21.1%
13090
84150
25.0%
84.34%
LC1000
5.3%
3270
65400
19.4%
27.11%
VF2000
52.8%
32850
109500
32.5%
162.65%
100%
62180
337125
100%
Based on this rudimentary cost analysis, PLC model M and VF 2000 seem to be the ‘future of the firm’ in that each produces more revenue than the other products based upon the resources of the firm as measured by time (time is money).
With this in mind, in order to maximize firm profitability, a number of recommendations emerge:
Determine if the ‘less profitable’ models are indeed the voice of the market or, perhaps they indicate an area of opportunity in which Hypergol is not getting their fair share of the total category revenue.
Shift sales and marketing efforts to these more profitable products using strategies such as reducing advertising/marketing funds to less to profitable models or perhaps by ‘upselling’ on value-added on enhanced features of the M or VF2000 models.
Rationalize the product line. For example, the two clearest cases of disproportionate time to revenue ratios is the P and LC1000 models.
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