Through effective use of operations management, project management, and information systems management Ohio Star forge will be able to ensure that expanding into a larger automotive ball bearing market will add value for the stakeholder. Operations management is critical to securing the needed resources from their parent company Daido Steel. Project management is essential to ensure that all resources will be used efficiently. Finally, information systems management will facilitate both operations and project management through information exchange and collaboration.
The challenge at Ohio Star Forge (OSF) is to be able to capitalize on the ...view middle of the document...
To prove to Daido Steel that this is the right move for OSF they must be able to show that the market demand is there and how much this will increase the total sales revenue. Management must show with an increase in sales and a larger profitability in the new market this investment makes sense. OSF is a premier ball bearing manufacturer in the US but Daido Steel knows this and wants to invest their capital into projects that will give them the highest return on investment (ROI). Other sister companies will be competing for these resources as well.
OSF will need to put together a proposal for this project to give to Daido Steel to convince them to invest in OSF. This proposal would include a budget, sales projections, profitability, and additional salary needed to run the new machinery. OSF would need to show how and where the machine would be placed in the factory. OSF would need to prove to Daido Steel that management has the ability and resources to manage this additional machinery. OSF would need to show to Daido Steel that the additional needed skilled labor force is here in Ohio.
OSF has been able to maintain high marks in machine efficiency. They have been able to make a profit every year for the last ten years. This shows Daido Steel that the operations management is in excellent shape. Entering a new market OSF would be able to bring in new customers. Finally, with the expansion, OSF would employ an additional 25-30 people making them a steward of the economy in north east Ohio.
A project according to Schwalbe (2012) is “a temporary endeavor to create a unique product, service, or result” (p. 4). A project involves five phases and they are initiating, planning, executing, monitoring, and closing (PMBOK Guide, 2008, p. 6). The project in this instance is the acquisition and installation of new machinery to compete in a new bearing market. This project would improve profit margins, increase production capacity, improve customer relations and raise worker morale. The scope, time, cost, quality, risk and resources of the project must be established (Schwalbe, 2012, p. 7). The first part or initiation phase of the project, scope, would involve research as to what type and size of machine to purchase. There are several forging machine makers as well as induction heater manufacturers. Being that OSF currently has four Hatebur forging presses it makes them the most likely option. However OSF has one Cefi and three Newelco induction heaters. The Cefi is the newest machine and has outperformed the Newelco’s so it is likely another Cefi will be purchased.
Once the size and type of machine is determined pricing would need to be negotiated. The pricing is very flexible due to the high cost and number of spare parts required to operate each machine. A long relationship developed with each manufacturer lower aides in lowering the purchase price. They are willing to sell the machines at cost to keep...