Case 2 Coors Ceramics
I. Problem Definition
Coors needed a new information system that would allow the company to be more efficient in terms of managing the business. Having a new information system would allow the company to meet customer demand, have a well-organized delivery system and reduce costs.
II. Review of Background Information
With Coors’ old system, the company took two days to process new orders. Orders were not tracked, so the salespeople cannot determine if the shipment has been delivered on time. Due to this, the company was forced to build up inventory to meet customer demand. From this stems three main problems – not being able to meet customer satisfaction, long lead times, and high operating costs.
III. Analysis of Facts/Data
In the case, the company focused first on determining what the customer needs. In knowing their customer, the company was able to devise a process wherein Coors ...view middle of the document...
Alternative Courses of Action
1. Adapt a new information system that will address the needs of Coors Ceramics in terms of:
a. increasing customer’s satisfaction
b. reducing lead time
c. reducing operating costs
Among the perceived advantages of this course of action are the following:
a. The new information system will add value to the organization and will give it a competitive advantage.
b. The new information system such as Supply Chain Management and Customer Relationship Management will address Coors Ceramics problems on high inventory and long lead time
c. Can easily detect where in the process a problem lies.
d. If the problems on long lead time and high production costs are resolved by the new information system it will lead to increase in profit.
e. It will help improve the business decision making of management.
On the other hand the following are the disadvantages of implementing this course of action:
a. Involves long period of time to study which among its business processes is to be eliminated.
b. New information system specifically designed to Coors Ceramics may be acquired at high cost.
c. Coors ceramics may retrench some of its employees as a result of streamlining.
2. Maintain the status quo. In this course of action the only perceived benefit is that Coors ceramics will not incur additional costs in procuring new information systems to their organization.
The disadvantages on the other hand if Coors ceramics did not introduce any changes in their organization are:
a. The problems on high inventory, long lead time, and high operating costs will not be solved.
b. Customers may look for another supplier of ceramics and semi conductors who can deliver the products faster.
c. Profit may decline.
We recommend alternative no. 1 which is to adapt a new information system rather than maintain the status quo.
The benefits far outweigh the costs of adapting a new information system as it will lead to additional profits, increase customer satisfaction and low cost of production.
The new information system will also improve the business decision making of management as it has readily available information compared to the old set-up.