Business Policy & Strategy

Presentation on Case Study

Submitted to
PROF AITAZAZ KHURSHID

By
Muhammad Muneeb Ahsan L1S20MBAM0061
Muhammad Raza Naeem L1S20MBAM0056
Khawaja Ammar Akram L1S20MBAM0042
Haseeb Arshad L1S20MBAM0027
Objectives of the Case Study

• Clear Observation about the problems faced by Rheacho

• Company’s position before and after doing strategic planning

• SWOT analysis
 Introduction of the Company

Challenges faced over the time

 CONTENT
Strategic Planning in different aspects

SWOT

Financial Results

Conclusion
Company’s Introduction

Rheacho was a family owned Formed in heart of Dallas fort worth

business moreover a family metroplex grand prirare Texas ,USA in
owned machine Shop 1990.

Rheacho used to make products usually

It’s major customer was for defense Industry .About 90% of it’s
Lockheed Martin. business is in defense Industry .
1992
Lockheed Martin Reduced its suppliers from 1600 to 400 to consolidate
its supply chain

Long Production Runs Pressure on Compromise on Quality

Rheacho

Long Setup Time

• Hired third party resources

“Companyfor immediate problem
worked 7 days solving
a week with no letup”
• Volunteered for an in company assessment by TMAC that focused on creating a vision, changing
(Wallace)
company culture, and dealing with human resource issues, and then adopting process and
technology improvements.
Mid 1993
Introduced cellular manufacturing

Implemented 3 person prototype cell in metal

extrusion area

Improved output by 200% in second week

 Implemented cellular manufacturing throughout the facility

• 2 month to redesign
• Minimal financial loss
• Created 5 new manufacturing cells
• Cross training for managers & production level workers
• Eliminated foremen-Flat organizational structure

Production capacity Reduce need for Reduced need for

increased by 300% inventory- freed 5000 workers, terminated
square feet space 36 workers

What to do with Extra Capacity?

1996
Wallace asked TMAC to facilitate strategic planning process for company
Strategic planning process involved establishing
1. Statement of purpose
2. Internal/external strengths & weaknesses
3. Strategic goals
4. Actions for overcoming obstacles

Shift from production Identified customer needs that

driven strategy to customer Improved communications
resulted in most profitable
need oriented strategy business

“We were all on the same page”

The impact of this strategic planning on other aspects of business are
(Wallace)
described in following slides
Marketing- Targeting Valued Customers

Due to cellular manufacturing and high production capacity Rheacho had to deal with a number of
buyers and develop number of quotes which resulted in time shortage and less time to understand
customer needs

Strategic planning helped to focus on key customers to become preferred supplier

Improved quotes

More sales at higher margins

Sole-source provider for a number of parts

Manufacturing-Supporting Customer Needs
Cellular manufacturing improved efficiency and capacity, and freed up space

So strategic planning helped by identifying New business opportunities. Guided plant layout and
investment decisions-for example, investment in new penetrant inspection room
• Pursuit of DI-9000 certification
• Purified plating discharge
• Achieved OSHA exemption

Manufacturing capabilities matched company strategy and

market demand

Environmental, health and safety measures supported

community commitment in strategic plan
Investment in Human Resource
Investment in machinery and equipment favored over employee training while Cellular
manufacturing emphasized flat organization, self-directed teams
Following a strategic plan helped in by
• Investing in people—for example, hired penetrant specialist and retrained welders in penetrant
inspection – as well as equipment to implement its new penetrant cell.
• Departing from flat cellular organizational structure by hiring general manager

Human resources supports manufacturing, market demand, and company strategy.

New General manager relieved president of ongoing shop-floor management

President focuses on strategic issues

Information Systems: Improving Customer
Service
At Rheacho MRP System wasn’t there due to which weekly cash flow status not available, materials
were purchased late and sometimes already stocked items were purchased

After strategic planning New MRP system was integrated with manufacturing and accounting
systems

Materials orders on time or ahead of schedule

On-time delivery of parts and components to customers improves, consistent with quick-
turnaround customer satisfaction goal in strategic plan

Ordering material already in stock eliminated

Weekly assessment of financial status available

 Opportunities Strengths
Supply Chain consolidation Cellular Manufacturing
by Lockheed Martin Wallace’s leadership abilities
Strategic Planning

Weakness Threat
Identifying and implementing Major focus on Key
Potential solutions late accounts only
Rheacho Sales & Wage per employee

Results
• Strategic goals in the account
management area, new customer
orientation in marketing and other
areas resulted in substantial sales
increases over the time.

• Sales per employee also improved by

90% over the period
Conclusion

• Rheaco transformed itself because it made multiple changes throughout all major
company systems. Rheaco also had won quality awards prior to or simultaneously with
converting to cellular manufacturing—and well before it initiated strategic planning.
however, it was the strategic planning process that led to multiple and interrelated
changes—for example, improving the alignment in the company's systems in support of
market needs and business strategies.

• Lockheed Martin's supplier consolidation gave Rheaco oppor­tunities and Rheacho

encashed it by aligning the company's systems i.e. Rheaco moved from a capacity-driven
job shop to a customer-driven, high-precision supplier.
THANK YOU