Kuiper Leda Manufacturing

Introduction

In today's world operations management plays a key role in maintaining competitive edge and long-term profitability for any business. Operations management is about getting the day-to-day work done quickly, efficiently, without any errors and at low cost (Chase-Jacobs-Aquilano, 2005). Lower the cost of producing and rapid delivery goods and services in their niche market make businesses highly profitable and huge competitive advantage against its competitors.

While Operations Management deals with day-to-day operations efficiently, there are various specialties of operations management such as Supply Chain Management, Quality Management and Business Process Re-Engineering. Supply Chain Management is consists of managing purchasing of supplies, Inventory control management, capacity planning and distribution planning (Chase-Jacobs-Aquilano, 2005).

Companies use supply chain management in order to gain competitive advantage in the market space. Organizations that use supply chain processes use various service and design strategies along with technology to manage their value chain process and interaction with suppliers and customers. In the current scenario Kuiper Leda is a small hi-tech manufacturer that has not yet implemented supply chain practices in order to manage its supply chain process.

Kuiper Leda has an opportunity to configure its supply chain in order to meet delivery needs for the order received from its customer Midland Motors. The problem is that Kuiper Leda will not be able to deliver the volume required to fulfill the order of Midland Motors with its current manufacturing capacity. Kuiper Leda will have to make a decision whether to increase in-house manufacturing capacity or to outsource manufacturing of products completely or partially.

Describe the Situation

Issue and Opportunity Identification

Kuiper Leda is a small Electronic Components Manufacturer with limiting manufacturing capacity but known for its quality and delivery responsiveness. The industry of Electronics Components manufacturing is highly competitive and strives on repeat orders and supplier relations and Kuiper Leda is unable to compete because most of its competitors are big and have repeat orders and better supplier relations

Kuiper Leda has received a large and urgent order from Midland Motors but does not have the production capacity in order supply for this order over existing orders.

Kuiper Leda will have to make a quick decision to whether increase production capacity or to outsource production in order to meet the time lines for order from Midland Motors.

Kuiper Leda's supply chain and manufacturing is currently not configured to able to handle large orders like the one from Midland Motors.

Kuiper Leda does not have a strong inventory management plan in place in order to handle delayed orders, re-purpose inventory for urgent orders from delayed orders and fulfill back orders from one customer with inventory from delayed orders of other customers.

Kuiper Leda's does not have proper distribution channels to reduce delivery times and to meet demands of growing customer base in United States.

Kuiper Leda does not have demand planning and sourcing strategy in order to meet urgent orders.

Kuipers Leda's supplier base is weak and needs to be rationalized in order to strengthen relationship such that suppliers act as partners in providing timely services.

Opportunities

Kuiper Leda has an opportunity to establish itself as a leader in manufacturing Electronic Control Units (ECU's) and RFID's through expansion and diversification leading to increased production capacity

Kuiper Leda also has an opportunity to use supply chain management practices like production planning, inventory management, capacity management, demand and distribution planning, outsourcing and supplier relationship to streamline its operations to meet the needs changing demands for products.

Kuiper Leda has an opportunity to diversify by setting up RFID manufacturing capacity to produce higher quantities RFID in future to meet increasing market demands.

Stakeholder Perspectives/Ethical Dilemmas

According to Zach Muir the CEO of Kuiper Leda needs to accommodate the needs of Midland Motors by back order other smaller customers as it is a big company and is known for long-term relationships with suppliers.

He also feels that Kuiper Leda should not over emphasize the service level and makes sure that with new distribution strategy does not increase carrying and ordering costs and result in excess inventory.

According to Natalie Zamora the VP of finance for Kuiper Leda thinks that strategically Kuiper Leda should keep manufacturing of RFID's in-house as there is a great deal of future growth potential and higher margins in RFID's.

Further she thinks that it is very important keep the unit costs under control in order to maintain competitive edge and use the new demand management strategy to reduce inventory and ship products just in time.

Nicole Swanson, VP of operations suggests outsourcing manufacturing of ECU's as Kuiper does not have the capacity to meet the order and any kind of pressure on existing production capacity may compromise the Quality of the product.

Further she feels that outsourcing will be temporary as Kuiper Leda has planned to expand its capacity by end of next year.

Frame the "Right" Problem

Kuiper Leda needs to implement efficient supply chain management strategy which involves Sourcing Management, Inventory Management, Distribution Management, Demand Management and Supplier Relationship Management in order to meet needs current and future demand for products, sustain growth, increase profitability and establish itself as a leader in the semiconductor industry.

Describe the "End-State" Vision

The end state goal of Kuiper Leda to able design and manufacture high quality and low cost electronics for various industries and flex its production ability dynamically in order to meet the demand of products to satisfy customer needs and establish itself as a global leader in semiconductor industry.

Identify the Alternatives and Benchmarking Validation

In order to achieve its end state goals following are alternatives that