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Fabtek Case (1)

Fabtek Case (1)

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Published by Urooj Ansari

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Published by: Urooj Ansari on Mar 25, 2011
Copyright:Attribution Non-commercial

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05/12/2014

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Case: Fabtek
EXECUTIVE SUMMARY
Fabtek has the ability to position themselves for profitablegrowth, but they need to fix their business, focus on keybusiness drivers, and re-evaluate the area. Listed below arethe key issues they face and the recommendations forimprovement. Focusing on these issues and developingselection criteria for quoting would help Fabtek improve theircurrent profitability and position them for growth. Fabtekshould accept the Pierce Pike order as it closely matchesFabtek's selection criteria for selecting orders.
Key Issues
Lack of Skilled Workforce
: Fabtek has failed to acquirehighly skilled workers.Fabtek also states anyone can make asell. This indicates the company places a low priority ontraining sales people.
Erratic Pricing
: Manufacturing Costs are unreliable and theBidding Process has a low success rate.
Lack of Capacity
: The company is currently facing shopbacklog and delivery times have increased from 8-10 weeksto 16-60 weeks. Some employees of the company were of the opinion that customers continued to place orders withFabtek in spite of the delays and backlog, because of thequality.
 
Customer Dissatisfaction
: There have been 18 deliveryorders that have not been as per the specifications of the
 
customers. Fabtek should focus its efforts on maintaining itsquality.
Critical Decision:-
Which potential order should Fabtek pick and how should itbid for it.
Constraints
Limited possibility to add new welders very quickly.
Fabtek’s limited facility size.
Added volume from any one of the orders will affect metalpurchases.
Recommendations
Skilled Worksforce
: Fabtek needs to strengthen its corecompetency by adding as many skilled workers as possible.It should not just confine its hunt for welders but they alsoneed to focus on direct selling and train salesrepresentatives to accomplish market growth and to sellcustomer value.
Consistent Pricing Strategy
: Fabtek needs to train itsmanufacturing and marketing group to work together inestimating accurate costs, lead-times and understandingcustomer value in quoting a job.
Increase Capacity
: Fabtek must either be more selective inorder intake or plan for capacity expansion.

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