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Mindanao State University

Graduate School

Masters in Business Management

BA 224 Total Quality Management

CASE ANALYSIS:

CASE OF THE ROTARY COMPRESSOR

Submitted to:

Dr. Aurea Pascual

By:

Celine Lorin Binas

Leah Leooldo

Lowell Valiente

March 27, 2017

Table of Contents
I. Point of View
II. Brief Summary
III. Statement of the Problem
IV. Situational Analysis
- Cause and Effect/ Opposing Forces/SWOT,etc.
V. Alternative Courses of Action
VI. Recommendation
VII. Action Plan with Time Frame and Responsible Person (matrix
form)
VIII. Contingency Plan
IX. Answer to Discussion Questions

I. Point of View
The case will be analyze in the company design and production
departments.

II. Brief Summary

General Electric decided to design and build a better model of rotary


compressor rather than outsource it from Japan and Italy. This decision
seems feasible and implementable at first not until the first compressor
failed, then eventually put GE factory out of operations.

III. Statement of the Problem

How will General Electric manufacture quality and durable refrigerators?

IV. Situational Analysis


FAVOURABLE UNFAVOURABLE
STRENGTHS WEAKNESSES
Invented and build in-house Market share and profits is decreasing
GEs technology was antiquated compared to
product (rotary compressor) competitors
Over confidence High time requirements in amking products
INTERNAL

(65mins vs 25mins)
Original services and product Labor cost is higher
Ignorance in designing the product pros and
cons
No learning from previous mistakes
Didnt evaluated option for outsoursing (Avoid
outsoursing)
Over confidence
Lack of testing process
Lack of supervision

OPPORTUNITIES THREATS
Purchase compressor from Japan High competitive
and Italy competitors
EXTERNAL

Joint venture with Japanese Competitors produce more


Changes in technology effecient products

V. Alternative Courses of Action

The table shows the alternative courses of action for General


Electronics with advantage and disadvantages to help the company improve
their current process by developing and designing quality products that
would achieve competitive advantage from competitors.

ACAS ADVANTAGES DISADVANTAGES

ACAS #1. It will direct Additional cost


Cost Benefit Analysis Management
what decision is
more feasible.
ACAS #2. Quality Check at Additional Cost
every phase. Requires constant
Quality System management
Security
ACAS #3. Few products to Timeliness and
be tested
Design for test against
Market (Product customer
Screening) requirements,
working and
reliability.
ACAS #4.
Readily available Willingness to buy
Outsourcing Lower labor Cost Higher Labor Cost

VI. Recommendation

Using the identified Alternative Courses of Action are (1) Build a


process development team department to enhance process modification for
in-house manufacturing, (2) Outsource the product and joint venture with a
Japanese Company and (3) Hire specialist/consulting service.

The group suggest to consider ACAS no. 2, outsource the product and
joint venture with the Japanese company, with this, GEs can adapt practices
and culture of Japanese that will help them become flexible in designing their
products.

VII. Action Plan with Time Frame and Responsible Person (matrix
form)

The proposed alternative takes time to resolve the disasters, but then
the company can expect a great improvement in their operations, if and only
if, the said adaptation was done properly.
Time Frame Responsibility
Activity Completi
Start Direct Support
on

Top
Contact the Japanese Operation
company
Month 1 Month 1 managem
s Team
ent

Discuss the companies Top


Operation
objectives and needs in Month 2 Month 2 managem
terms of product design s Team
ent

Work out the costs for Top Company


outsourcing and find a Month 3 Month 3 managem Financial
way to minimize them. ent Team

Adapt the standards Top


Operation
practices of the Month 4 Month 9 managem
s Team
Japanese Company ent

VIII. Contingency Plan

In the even that ACAS 2 would not worked, it is recommended to

proceed with ACAS 3. ACAS 1 may be more appropriate in production as in

manufacturing company. Besides, it requires much time, which may

aggravate the existing problems. ACAS 3 may help the company addressing

the disasters in the product development process as well as reducing and


eliminating defects in the product and processes for an effective Total Quality

Management.

For the Management:

Consider customers participation in designing new products

Evaluate the possible options in developing products

Design of quality control systems to eliminate the defects

For associates:

Review on job responsibilities.

Revalidate on skill-based training programs.

Briefing on Process Development

These interventions are expected to solve most of the other issues for

process designing.