MBA HRM BATCH (2021-23)

Written Analysis & Communication

Individual Assignment - 03

Case Analysis – SchmidtCo (A)

Date of Submission- October 11, 2022

Submitted to- Submitted by-

Prof. Harismita Trivedi Lakshita Pabuwal 218014

 Executive Summary

The main distributor for European companies and cars in North America was Schimdt Co.,
an importer with headquarters in Philadelphia. The core of the $40 million family-owned
company was its technology infrastructure. Schimdt was well aware of the major difficulties
facing the endeavour to adapt the information system to his distribution of auto parts. The
new system would incorporate all of the business's processes. The level of job quality,
however, was much below expectations. When the ERP system he had bought from DTech
was having deployment issues, John wasn't sure whether to stay with the current vendor or
move because he had already made sizable investments in them.

(100 words)
 Situational Analysis

John Schmidt oversaw operations for SchmidtCo, a 1950-founded family-owned distributor of

car components with headquarters in Philadelphia. The business has a net worth of $40,000,000.
Each year, SchmidtCo distributes almost 10,000 distinct products from 21 manufacturers to 21
different locations, shipping 20,000,000 pieces of equipment. SchmidtCo was replacing their
outdated information system with a better, more efficient system and server in order to improve
the efficiency of their intricate distribution system. But the project was having significant issues.
The project was already three months late and $50,000 over budget. The upgrade's quality fell far
short of expectations.

John had been working tirelessly to update SchmidtCo's old inventory system. However, even
after multiple improvements made with the assistance of a freelance consultant (who had since
left) and an IT manager, SchmidtCo discovered that the outdated system had serious issues. John
put together a group of eight managers to figure out what needed to happen in order to address
these issues. The group chose to put into place an Enterprise Requirements Planning system,
which takes into account all crucial facets of a business. Warehousing, Inventory, Accounting,
Customer Relationship, etc. were crucial elements for ScmidtCo. They chose the DTech system
after thorough consideration due to its superior capabilities in warehouse and inventory
management. With installation, the system was roughly $400,000 in price. Even with thorough
preparation and training, it became evident within the first three months of the project that
something was wrong. The business has previously invested $600,000 in a number of areas.
Ineffective DTech consultants, John's lack of time, an incompetent IT manager who was unable
to transfer data from the old system to DTech and set up reports, and an unreliable old system
were among the issues.

SchmidtCo has explored a number of solutions, including recruiting John's friend David
Goldberg to assist with the deployment process. DTech also made a few major personnel
changes. John had a number of options, including employing a new IT Manager and a project
manager on a full-time basis. He also had the choice of completely abandoning DTech and
switching suppliers. Given that it was one of his company's largest investments, John was in a
difficult situation.

Problem Definition
To figure out a solution to keep working with the same vendor while preventing any additional
delays or cost overruns.

Decision Objectives
1. To immediately begin utilising the new system.
2. To prevent project overrun and implantation delay.
3. Must deal with the IT workers and infrastructure of his firm. He needs to broaden the
internal knowledge of the IT manager and IT consultants.
4. Must choose an IT manager and a project manager who can handle the position
diplomatically.
5. To completely replace the old information system with the new one provided by DTech
after the pilot testing is over.
6. Must make sure that no resistance from the workforce exists.

Options
1. Should inquire with the vendor about providing the services required to create the system
fast.
2. The choice of a new project manager, who will have access to all of the project's
information.
3. Deployment of the ERP system in phases. Utilize the inventory and purchasing modules
initially.
4. To look for a new vendor to implement the ERP

Evaluating the options

1. Should inquire with the vendor about providing the services required to create the system
fast - John, the SchmidtCo implementation team, the DTech consultant, and the DTech
VP of sales would make up the team. The quantity of work that has been completed and
the amount that is still outstanding must be regularly monitored. John has to be more
involved in the project and there should be stronger deadlines. A task force strategy
should be used for the project.

2. The choice of a new project manager, who will have access to all of the project's
information - By selecting a new project manager, the team's leadership would shift,
bringing energy and discipline. New concepts will also be available for the team to adopt
in order to progress in the desired direction. David is qualified to be employed as a full-
time project manager because he is a current employee of the company, has significant
expertise in this field, and has been involved with the project from the beginning. A new
IT staffer will increase costs and postpone projects.

3. Deployment of the ERP system in phases. Utilize the inventory and purchasing modules
initially - An inventory and purchasing system should be implemented into the business
immediately away because they are advantageous. They can initially just evaluate their
utility using these two modules. After some time, they can go on to other modules like
accounting, sales, warehousing, and customer relationship management. By doing this,
the project's scope would be limited, making it simpler to manage and monitor the project
and giving the implementation team more area to work.

4. To look for a new vendor to implement the ERP - The project might not get the original
payment and will have to start over if it is further delayed. The cost of deployment and
 business operations may also go up as a result. The previous system must be maintained,
which lowers operational effectiveness.

Option-Objective Matrix

OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE

1 2 3 4 5 6
OPTION Yes Yes No Yes Yes Yes
1
OPTION Yes Yes Yes No No Yes
2
OPTION Yes Yes Yes Yes Yes No
3
OPTION Yes Yes No No No No
4

Decision
The best thing for John to do is to donate SchmidtCo's resources without giving up on the
undertaking. He may create a management group that consists of Implementation team members,
lead DTech consultants, and the vice president of DTech's sales. Run the project using a task-
force approach, imposing more stringent work deadlines, and keeping a close eye on it. John
must also commit the required amount of time to the task. If he can't for a valid cause, he should
offer David the job or the letter.

Action Plan

• John should relinquish control of the project to David Goldberg since he raised his
concerns early on and appeared to have been involved from the start.
 • His educational background and professional experience at companies like IBM and Intel
can also be helpful while making their case to the Mumbai team.
• It's necessary to swap out the IT manager. Continue collaborating with DTech to improve
their response time.

Contingency Plan
The next best course of action would be to switch vendors. Instead of relying on the vendor, who

is unreliable and dishonest, we may start afresh after forfeiting the investment amount. It's still

preferable to lose a $200 000 down payment than a $40 million company.