Case Study 3: Tefal Machine Corporation

Characters:

Sam Sung, recently hired to remedy problems meeting scheduled deliveries

George Tefal, VP of Operations, daughter of the company president

Background:

The Tefal Machine Corporation was founded by Adrian Tefal in 1969. It started as a junk shop, but it eventually grew to a metal fabrication shop. Great business decisions were made in the 90s and this led to the expansion of the business. Today, it earns Php 5,000,000 a year and it has a work force of 50 machinists and 10 office personnel.

Sam Sung was recently hired as the companys production scheduler. Sam is a graduate from De La Salle University with an undergraduate degree in Industrial Engineering. He has 3 years of professional experience with another company in a similar role. George Tefal, Vice President of Operations and the son of the founder, was the one who selected and hired Sam for the job.

Recently the company has been having difficulty meeting delivery schedule deadlines. Sam was hired to improve the companys performance in on-time deliveries. He has been learning the systems of the operations and studying possible solutions, but he has not yet determined the best course of action to recommend.

On 21 October, an order worth Php 400,000 was scheduled for shipment. A week before the scheduled shipment, the client visited the office and asked to delay the delivery for a week because they are experiencing internal issues regarding their labor force. The client assured that they will still proceed with their orders. Sam discussed this request with George, and they agreed to accommodate the customers request on the condition that the customer agree to being billed on the originally scheduled delivery date and to pay on the originally contracted payment terms. The client accepts this condition, so they signed the agreement.

On the morning of 21 October, the production manager discussed with Sam that the order will only be completed on 28 October and it will take 3 more days to ship the orders. Concerned about the impact of this delay on his job status, Sam decided to investigate the cause of the delay before informing George of the problem. It will be difficult to deliver the orders on 31 October to November 2 because of the heavy traffic expected, so this will cost additional cost for the company. However, before Sam could set a short meeting, George already issued and mailed the invoice for the order as agreed with the client.

Challenge:

How should Sam Sung approach the problem? What should he tell George next?

Answer the following:

What are the relevant facts?

Who are the primary stakeholders?

What are the alternative courses of actions?

What are the practical constraints?

What is your recommendation?