lPL lnc

8ackground of the Study

lPL lnc ls a manufacLurer of pumps and relaLed fluldhandllng equlpmenL LhaL supplles
producLs used Lo Lransfer all Lypes of llqulds LhaL varles from palnL Lo food producLs and pumps
Lo varlous lndusLrles such as Lhe auLomoblle and appllance Lo perform duLles ln vehlcle
servlclng home consLrucLlon eLc lPL lnc ls a mulLlmllllon dollar company LhaL has lmproved
sales and proflLs over Lhe lasL flve years Lhrough aggresslve newproducL lnLroducLlons
lPL's hlerarchy ls as follows resldenL uan !ones vlce resldenL of CorporaLe uevelopmenL
and MarkeLlng hll 1homas who oversees boLh MarkeLlng and Lnglneerlng deparLmenLs and
vlce resldenL of ManufacLurlng norman ParL

AlLhough Lhe pasL flve years have been successful for lPL !ones began Lo wonder wheLher
Lhere was a way Lo lmprove Lhe procedures organlzaLlon and pro[ecL conLrol sysLems ln order
Lo make newproducL lnLroducLlons go more smooLhly As sLaLed above 1homas ls ln charge of
boLh MarkeLlng and Lnglneerlng lPL chose Lo do Lhls ln order Lo faclllLaLe cooperaLlon
beLween MarkeLlng and Lnglneerlng parLlcularly wlLh newproducL lnLroducLlons Whlle Lhls ls
good ln Lheory lL seems very llkely LhaL 1homas ls sLreLched Lhln over so many responslblllLles
ln addlLlon wlLh Lhe markeLlng and englneerlng deparLmenLs so lnLegraLed many Llmes lL ls
dlfflculL Lo Lell whlch deparLmenL ls ln charge of cerLaln responslblllLles and who ls Lo blame
when problems arlse

Ieas|b|e So|ut|ons
Cne blg concern wlLhln Lhe englneerlng deparLmenL ls Lhe flucLuaLlon ln Lhelr servlces
workload 8ecause all newproducL developmenL pro[ecLs demand Lhe help of varlous
englneerlng servlces Lhere conslsLenLly seems Lo be a boLLleneck slLuaLlon for Lhe englneers
1hls ls llmlLlng efflclency and slowlng down Lhe lnLroducLlon of newproducLs Whlle Lhe
Lnglneerlng Servlce and AdmlnlsLraLlon Manager has requesLed several Llmes for more
advanced noLlce for Lhese pro[ecLs Lhe response glven was LhaL Lhere are many uncerLalnLles ln
Lhe pro[ecL schedules and many requlremenLs are ofLen unknown unLll Lhe very lasL mlnuLe
AnoLher lssue ls LhaL Lhe manufacLurlng deparLmenL seems Lo be excluded durlng Lhe deslgn
sLage of newproducLs and suddenly has a producL deslgn LrusLed upon Lhem wlLh llLLle
knowledge abouL Lhe deslgn yeL hlgh expecLaLlons for Lhelr work 8ecause of Lhese lssues Lhere
are many problems LhaL arlse durlng manufacLurlng and someLlmes producLs musL be recalled

LasLly lPL ls conslderlng a new CAuCAM sysLem LhaL would coordlnaLe Lhe Lhree
deparLmenLs 1hls compuLer sysLem promlses Lo ellmlnaLe many errors encounLered ln
LranslaLlng beLween englneerlng and manufacLurlng lL would also speed up Lhe newproducL
lnLroducLlon cycle and ellmlnaLe many currenL producLlon problems and save Lhe company
hundreds of Lhousands of dollars

na|ys|s
lPC has been sufferlng from dlfflculL newproducL developmenL and lnLroducLlon wlLh as many
as LwenLy pro[ecLs boLLlenecklng ln Lhe englneerlng servlces deparLmenL aL once and Lhe
englneers puLLlng ln 266 more hours Lhan Lhe pro[ecL managers 1hls ls due Lo over
lnLegraLlon and lack of role clarlLy beLween Lhe markeLlng and englneerlng deparLmenLs and
requesLlng llLLle lnpuL from manufacLurlng deparLmenL durlng producL deslgn sLage

value Analysls
CosL
8eevaluaLe and creaLe a model of prlmary responslblllLles and $8000
speclflc duLles for each deparLmenL

CreaLe a new deparLmenL lnLegraLlon plan LhaL lncludes $7000
MaLerlals Manager ln ueslgn SLage

urchase and lmplemenL new CAuCAM sysLem $200000

CreaLe speclflc schedule for fuLure pro[ecLs and englneerlng $9000
servlces needed

1oLal CosL $224000

value
WlLh lPM's currenL shared responslblllLy delegaLlon Lhere are Lasks LhaL have Llme spenL on
Lhem by boLh Lhe MarkeLlng and Lnglneerlng deparLmenLs WlLh a new preclse model of Lasks
and duLles for each deparLmenL efflclency has Lhe poLenLlal Lo lncrease by 30 ln each
deparLmenL whlch wlll be a savlngs of $16000 a year Along wlLh a new plan for responslblllLy
delegaLlon brlnglng Lhe MaLerlals Manager aboard durlng Lhe ueslgn SLage wlll cause fewer
problems Lo arlse laLer on durlng Lhe ManufacLurlng SLage Lhus savlng money ln recalls and
posLproducL release 1hls wlll save abouL $18000 ln manufacLurlng cosLs per year 1he
lmplemenLaLlon of Lhe CAuCAM sysLem wlll speed up Lhe newproducL lnLroducLlon cycle and
ellmlnaLe many of Lhe currenL producLlon and communlcaLlon problems LhaL Lhey are faclng
Cver Lhe course of flve years efflclency wlll lncrease by 60 and 40 of currenL producLlons
problems wlll be ellmlnaLed Lhus savlng a LoLal of $860000 ($240000 ln Lhe flrsL year and
$133000 each year Lhere afLer) A pro[ecL schedule for new producLs and englneerlng servlces
needed wlll decrease Lhe currenL boLLleneck lssue LhaL Lhe englneerlng deparLmenL ls currenLly
faclng and lncrease efflclency by aL leasL 30 savlng $140000 ln Lhe flrsL year So ln Lhe flrsL
year Lhere would be a grand LoLal of $414000

8Cl

value $414000
CosL $224000

value/CosL 8eLurn on lnvesLmenL
$414000/222000 184

1he 8Cl for all of Lhe recommendaLlons sLaLed ls 184 whlch ls noL consldered Lo be unusually
hlgh buL esLabllshlng buL lL ls lmporLanL Lo remember LhaL Lhls analysls [usL covers Lhe flrsL year
and LhaL Lhese changes wlll remaln favorable for years Lo come lL would be favorable for lPL
Lo lnvesL ln Lhese recommendaLlons

SLraLeglc lnlLlaLlve uecrease Lhe amblgulLy of prlmary responslblllLles delegaLed Lo each
deparLmenL by clearly ouLllnlng Lasks and speclflc goals lncrease Lhe uLlllzaLlon of
manufacLurlng deparLmenL lnpuL by lnvolvlng Lhe MaLerlals Manager ln producL deslgn sLage
creaLe speclflc schedule for fuLure pro[ecLs and englneerlng servlces needed ln Lhe nexL year
and lmplemenL new CAuCAM sysLem as a way of coordlnaLlng Lhe Lhree deparLmenLs wlLhln
Lwo years

uLLC?MLn1 l8AMLWC8k

AcLlon 1lme lrame erson(s) 8esponslble CosL

| |8egln (CLr/?r) |Lnd (CLr/?r) |
| |
|1 Analyze currenL slLuaLlon of deparLmenLal lssues and meeL wlLh managemenL Leam Lo | |
|resldenL vlce resldenLs and ManagemenL 1eam |n/a |
|dlscuss recommendaLlons |C1/?r1 |C1/?r1 |
| |
|2 Asslgn a manager currenLly aL lPL Lo revlse currenL deparLmenL responslblllLles |C1/?r1
|C1/?r1 |resldenL vlce resldenLs and ManagemenL 1eam |$8000 |
|3 LsLabllsh a plan and goals for Lhe lmplemenLaLlon of Lhe new delegaLlon of Lasks for |C1/?r1
|C2/?r1 |resldenL vlce resldenLs and ManagemenL 1eam |n/a |
|each deparLmenL | | |
| |
|4 8evlse ueslgn SLage lnvolvemenL Leam Lo lnclude MaLerlals Manager |C1/?r1
|C1/?r1 |ManagemenL 1eam and MaLerlals Manager |$7000 |
|3 MeeL wlLh new ueslgn Leam and dlscuss new meeLlng process and agenda |C1/?r1
|C2/?r1 |ueslgn 1eam and MaLerlals Manager |n/a |
|6 CreaLe speclflc schedule for fuLure pro[ecLs and forecasLed englneerlng servlces |C1/?r1
|C2/?r1 |Lnglneerlng Servlce Admln Manager and MarkeLlng |$9000 |
|needed | | |lannlng Manager
| |
|7 lmplemenL schedule for new pro[ecLs |C1/?r1 |C3/?r1
|Lnglneerlng and MarkeLlng ueparLmenLs |n/a |
|8 urchase new CAuCAM sysLem |C1/?r1 |C1/?r1
|resldenL vlce resldenLs and llnance |$173000 |
|9 lmplemenL new CAuCAM sysLem |C1/?r1 |C1/?r2
|resldenL vlce resldenL ManagemenL 1eam |$23000 |
|10 | | | |
|

onc|us|on
lPL lnc ls a large mulLlmllllon dollar manufacLurer of pump and relaLed fluldhandllng
equlpmenL 1he company supplles producLs used Lo Lransfer all Lypes of llqulds conLalners and
pumps 1helr sales and proflLs have lncreased over Lhe pasL flve years however lL has become
clear LhaL Lhere ls room for lmprovemenL wlLhln Lhe procedures organlzaLlon and pro[ecL
conLrol sysLems 1he problems LhaL have rlsen ln Lhese areas are due Lo lack of clarlLy ln
deparLmenL Lasks and responslblllLles Lhe overlnLegraLlon of Lwo deparLmenLs and Lhe
excluslon of lnpuL from Lhe oLher
1o remedy Lhese lssues lPL musL address Lhe lnadequacles of Lhelr currenL deparLmenLal
lnLegraLlon by mapplng ouL deflnlLe duLles requlred from each deparLmenL Lhe lnLegraLlon of
Lhe MaLerlals Manager lnLo Lhe ueslgn Leam a new and speclflc schedule drawn up for servlces
needed from englneerlng and lasLly Lhe lmplemenLaLlon of Lhe new CAMCAu sysLem





ecommendat|ons

uecrease Lhe amblgulLy of prlmary responslblllLles delegaLed Lo each deparLmenL by clearly
ouLllnlng Lasks and speclflc goals lncrease Lhe uLlllzaLlon of manufacLurlng deparLmenL lnpuL by
lnvolvlng Lhe MaLerlals Manager ln producL deslgn sLage creaLe speclflc schedule for fuLure
pro[ecLs and englneerlng servlces needed ln Lhe nexL year and lmplemenL new CAuCAM
sysLem as a way of coordlnaLlng Lhe Lhree deparLmenLs wlLhln Lwo years

1 8evlse Lhe currenL prlmary Lasks performed by each deparLmenL and seL speclflc goals Lo
ensure LhaL all lssues are belng plnpolnLed addressed and remedled ManagemenL needs Lo
ensure LhaL Lhere ls no amblgulLy abouL whlch deparLmenL ls responslble for each Lask lan
should be fully revlsed and seL ln moLlon by Lhe end of Lhe second quarLer

2 8rlng Lhe MaLerlals Manager on board Lo Lhe ueslgn 1eam so LhaL durlng Lhe ueslgn SLage
poLenLlal manufacLurlng problems can be addressed and prevenLed wlLh Lhe help of a member
wlLh manufacLurlng knowledge 1hls wlll reduce Lhe number of problems LhaL have rlsen ln pasL
manufacLurlng sLages and recalls LhaL have occurred 1he decrease should apparenL by Lhe end
of Lhe second quarLer

3 CreaLe speclflc schedule for fuLure newproducL pro[ecLs and forecasLed englneerlng
servlces needed for Lhe nexL year 1hls wlll help Lo sLagger Lhe servlces needed from Lhe
englneers and avold boLLleneck slLuaLlons wlLhln Lhe englneerlng deparLmenL 1here should be
a noLlceable lncrease ln efflclency by Lhe end of Lhe Lhlrd quarLer

4 urchase and lmplemenL new CAuCAM sysLem WlLh new sysLem all Lhree deparLmenLs
wlll be elecLronlcally coordlnaLed communlcaLlon wlll become easler and more efflclenL and
errors encounLered ln Lhe pasL beLween englneerlng and manufacLurlng wlll be ellmlnaLed 1hls
sysLem wlll also creaLe a fasLer and efflclenL newproducL lnLroducLlon cycle for lPL and
ellmlnaLe many of Lhe producLlon problems lL had been experlenclng