Agricultural Engineering Limited is a small, UK based, company that specialises in the manufacture of a wide range of special purpose agricultural equipment, usually individually made to order for a diverse customer base. The previous owner, now aged seventy, wanted to sell the business and retire. Five months ago, four of the twenty employees borrowed money against their houses and bought the company. The previous draughtsman bought 35% of the shares and now acts as Company Director with the production engineer, now Production Director, buying 30%, the inspector, now Quality Director, buying 20% and the storekeeper, now Logistics Director, buying the remaining 15%. The fifteen production workers were employed in their existing roles with no change of pay or conditions.
Erfunden is a rural country relying principally on agriculture with thousands of small farmers each owning a patch of land that they cultivate, mainly by hand, to produce enough to feed themselves and have a little to sell at the local market. The country is technically a democracy, but several powerful families have undue influence on government policy. The minority (45%) government rules with a coalition made up of six out of the ten smaller parties with the opposition (35%) party constantly trying to split the coalition and form the government.
The Prime Minister of Erfunden, wants to bring his country into the twenty-first century by improving the current very primitive farming methods, amalgamating many small farms into larger, more economic, units and concentrating on cash crops. As part of this plan he wishes to place an order with Agricultural for three hundred of their patented automatic ploughs at £6,000 each for delivery within twelve months. The value of this order is more than twice their usual annual turnover.
With their current process layout and working practices, even concentrating exclusively on this order, Agricultural does not have the capacity to produce this quantity of ploughs within the timescale. The Production Director, however, believes that by concentrating exclusively on this order, moving the existing machines to form a product layout, buying a new 150 Ton press (which will require the existing floor to be locally strengthened and a new power supply installed) for £60,000 from a company in China, requiring the production workers to work more flexibly and working a six-day week they can meet the order on time.
I have to Prepare the BUSINESS CASE for the Production Director’s project presenting the arguments for and against, including a stakeholder and risk analysis and looking at alternative ways they could meet this order. On the basis of your analysis what would be YOUR advice to the company and WHY.
Assuming that they decided to go ahead: - i have to Prepare a detailed plan including a WORK BREAKDOWN STRUCTURE and RISK MANAGEMENT PROPOSALS for the Production Director’s project including all aspects, not just repositioning of the machine tools and the installation of the new press.
2007-11-04
23:13:06
·
2 answers
·
asked by
Anonymous
in
Small Business