Question

Case Study Analysis

Read carefully the following case/scenario and answer the questions given at the end.
A manufacturing company, involved in the business of food processing, faces a technical problem
at one of their major plants. Recently they faced a technical issue which resulted in loss of
production and was fixed by engaging their mechanical staff. Now this technical problem can result
in even bigger loss of production and if it gains attention of public through social or electronic
media, then company’s reputation will be at stake. Senior management of the manufacturing
company is really worried on this current scenario. After brainstorming, the senior management
decided to consult a specialist firm for help. This time senior leadership wanted to get a detailed
technical analysis of their production machines. The specialist firm conducted a detailed technical
audit of all 15 manufacturing machines and presented the following findings.

Risk Level	Quantity	Percentage
very high	1	7
high	7	47
medium	5	33
low	0	0
very low	2	13

The audit revealed that 1 very high, 7 high and 5 medium risks for machines required immediate
reduction measures. The senior leadership entrusted same specialist firm to fix these technical faults
with aggressive schedule so that manufacturing company does not bear a huge loss. The specialty
firm performed the rectification measures in production machines within due time and presented the
following updated data.

Risk Level	Quantity	Percentage
very high	0	0
high	0	0
medium	0	0
low	7	47
very low	8	53

As above table indicates, by involving a specialized firm at high cost, senior leadership of the
manufacturing company was able to retrieve the production setup back on track.

Question 1: Should the manufacturing company involve the specialist firm in first instance of
technical fault? Explain your view point with reasoning in minimum 300 words.
Question 2: State FIVE measures that the manufacturing firm should take at this stage to avoid
such technical issues in future. Measures should be specific and self-explanatory.

Answer 1

1. The Management should keep the decision to involve the specialist firm in first instance in case of technical default. Manufacturing company to appoint specialist firm in first place is good decision due to following factors:

a. Fierce Competition - In food processing business, there is fierce competition in the market, if company is not able to manufacture and supply its products on timely basis in the market it will lose its market share.

b Reduce Downtime or Breakdown – By removing the very risky, risky, and medium risky machine. It will lead to reduce the chance of breakdown and downtime to faulty working and improve company’s output.

c Quality Assurance – Quality is prime factor for food processing, since due to breakdown food work in process food material can get detoriated and leads to bad reputation for business.

d Focus on Other business – Since, identification and replacement of faulty machines was done by specialty firm, company can focus and utilise its resources on the main business.

e Reduce Cost – Speciality firm replace the faulty machine. For which company has to incur heavy one-time expense, however it will reduce recurring repair cost, reprocessing cost and opportunity cost of sale forgone due to delay in manufacturing.

f Reduce Incidents – Due to faulty machines there are high chances of accidents which will lead to damage of human life and resources. By appointing speciality firm company remove this concern.

2

The five measures company should take to avoid such incidents in future are:

a Inspection - Regular inspection of output by qualified staff to check that the process is in control or not.

b Preventive Maintenance - Regular risk assessment by specialist team to check that the machines do not have any high risk of malfunctioning.

c Test checking - Under production pressure or extreme climatic conditions or at full capacity to test that they operate consistently.

d Training to Employees – providing proper training and guidance to how to use machine and how to do maintenance of the machine will reduce chances of incidents.

e Standard Operating Procedure -Setting up standard operating process for running of each machine to avoid any experiment by worker.