Fabtek is a company specialized in fabricating and selling titanium and equipments made of titanium. Recently, Fabtek is failing to maintain market share and losing money because of long delivery schedule and late deliveries due to shortage of capacity and unreliable internal forecast.
Two executives of Fabtek recognize that marketing division and operations division should cooperate with each other to improve the efficiency and profitability of fabricating business. They agree to become more selective in taking orders. At this point, they have four prospective fabricating orders and must decide which order to take.
In this case, I see two issues. First, the inter-communication/cross-functional cooperation between operations and marketing should be improved. There should be more concurrently updated capacity information available both operations and marketing. Since this company is relying much on the skilled labor, the estimation of capacity is crucial for winning and doing jobs timely. Second, clear criterion must be set up for taking orders.
It'd be easier to judge which order to take or not with these criterion. In this case, there are two kinds of criterion and these two share some aspects and contradict some aspects. Among four orders offered, it is recommend to take one from Pierce-pike and one from Worldwide paper. Even though the capacity of welders is short in late 1991, it can be resolved by scheduling and these two orders will give the chance of diversifying the market to Fabtek. The order from Refco is a big deal but it's more labor-centric and hard to meet the delivery date with present capacity. The order from Kathco is one shot deal and can be executed within capacity but strategically might be discarded to hinder the expansion of the competitor.
* Issues should be considered to select orders
- What is the best order?...