Strategic Plan for Precision Parts Ltd

PART 2, STRATEGIC PLAN

Strategic Plan for Precision Parts Ltd.:

This document sets out a strategic plan for Precision Parts. It reviews strengths, weaknesses, threats and opportunities; presents a series of statements relating to Precision Parts vision, mission, values and objectives; and sets out its proposed strategies and goals.

Strengths

One the strengths of this company are that it has a strong management team. This team is able to steer the company forward and keep ambitious. The company also has successfully acquired it first target market and this makes it have a stronger foothold in the market and a basis for expansion. Another advantage is that the initial product was strong enough to have evolved into a range of products. This created a well rounded and organized business that is robust and able to transact internationally. The number of employees that the company has also adds to its strength in that the company is able to grow in leaps and bounds to even forecast the future of where it hopes to be.

Weaknesses

A weakness for this business has been that the management has been too narrow and this has been the reason that the company has not expanded fast enough. Being a small company, the management does not yet have enough expertise and experience to have a broader outlook into the industry in level and what it takes to get the company to the desired levels. The lack of awareness amongst prospective customers has been a setback that is worsened by the absence of a strong and aggressive marketing team. There has also been the emergence of new technologies that have swayed the market.

Threats

There has been speculation that a major player may move to the target market segment before the company and this might threaten the expansion program. Technological innovations are a big threat to the existence of the products. This is because they may provide better tools that will make work even easier. Global economic slow down may threaten the demand for our products and business. Another threat is the vulnerability of the dollar against other world currencies because this makes our earnings very volatile.

Opportunities:

The target new markets are usually seen to be able poised for rapid growth. This is very tempting to an organization of our stature. Other opportunities are presented by distribution channels that are always seeking new products.

Vision:

The Investors' vision of Precision Parts is to actually grow the firm to a point where it has an international presence given the rapid growth that the company has been experiencing. Plans are underway for new facilities that will be needed for international expansion. And PPQ Parts anticipates building most of those (80%) outside the United States. Our parts hold 5% of the world market share on small SUVs, but its goal is to get to 9% in this period. The Current stock price for our share is $10 per unit which is far below the goal that is $22 a share. The company’s Profit margin for a 3-year average is 6% which has also been the Industry average. The company goal is 13% for the time in question. The employee turnover is also set to be reduced to 17% for a 28% high. We have been involved with the communities we deal in and give a 0.5 % (of profit) to charity. This is set to increase to a generous 5%.

Environmental Scanning;

The planned expansion of the business is to have an international presence. This is due to the fact that it is strategically located and offers a good entry point into the international market because of the booming parts and construction industry. The international economy has also been experiencing rapid growth especially with economies such as the Asian Tigers and the strong emerging African economies that would push for a demand in parts.

Environmental scanning would also look at factors such as resource analysis of the proposed market to enter. Given that Egypt is the chosen area of expansion, there may be other American firms that may have taken similar interest within the emerging economies and subsequently create competition.

The volatile situation in Egypt at this particular point in time politically in Egypt is of great concern and this should be firmly considered before rolling out the final plan. This would prevent major risks and losses. The company should look internally for the experienced workforce that has been in the business for a long time and can take and sell the brand and the corporate image and best working practices abroad.

The short term strategies of the organization are to make an immediate impact and get a good size of the market. Promotions and discounts can be used as a strategy and backed by a strong marketing team, should be able to easily penetrate. The Long term strategy is for our products to be the number one tools of choice in any construction in Africa.

The preferred area of setting up the company is Alexandria. The benefits for this area are due to the proximity to the port for the importation of goods that will be moved in bulk and by sea. The goods can then be moved easily toward other African countries via the Nile. The economies of North African countries are larger than other areas in Africa and this offers a larger. However on the other hand, there exist limitations such as the current political turmoil that Egypt experienced, creating uncertainty into the near future of the nation’s direction.

PART 3 SOFTWARE ANALYSIS

PPQ Parts has a reputation for being conservative when it has come to advancements in technology. We feel that this has served us well in the past, however, we now recognize that we will need to improve our IT systems to cover our international expansion and we will need the best that can be found for our purposes. Toward that end, we have isolated three areas that will need specialized systems and this report represents our research in those areas.

We sought advice from CTS Guides a company that has reviewed several manufacturing software packages. CTS represents and recommends the best software solutions on an individual basis. It may be to our advantage to further utilize the expertise at CTS as we expand. They offer a side-by-side vendor comparison of many aspects of the available manufacturing software. They offer a consulting feature that would assist us in this search as we emphasize our international manufacturing plan.

We looked at overall systems, and individual systems. Reviewed were DBA Manufacturing Software, MIE Solutions, ABAS Software, Exact Macola Software, Sage 500, and FITRIX ERP software.

DBA Manufacturing

DBA Manufacturing Software caught our eye. We want to retain the small business image both during and after our prospective expansion. We liked that DBA had worldwide sales and support since we are looking at expanding overseas. It appears to be self implementing. The ERP portion was billed to be less complex than traditional software (as well as less costly). Our IT personnel thought that the software was a likely candidate for “building up” from the basic system as our needs changed.

Since we are involved with material labor and subcontracting services we want our software to be able to reflect those special services without a bulky spreadsheet and GA program. While we were only looking at MRP, ERP and CRP, we liked the fact that DBA Manufacturing provided the whole package as needed for small businesses.

Cost - DBA has a ”single package price, flat fee support subscription, and low cost annual fee, with 180 day refund option. The DBA software handles 5-50+ users and is licensed and priced at $2995 per 5-user pack. Support is priced at $495 for an initial 6-month support subscription” (DBA Manufacturing, n.d.).

Compatibility - DBA uses the Firebird SQL database which is structurally similar to SQL Server and Oracle, which is designed to run on server hardware with fast processors and sufficient RAM as well as on efficient networks with high-capacity switches, network cards, and cabling. Our IT technicians felt that we would need to upgrade our database to use this system.

Work Flow Processes - With regard to work flow processes, DBA emphatically states that their entire system needs to be followed in order to realize the most efficient work flow. They caution that using only bits and pieces and implementing our own processes will result in poor results. Again, our technicians felt that some “tweaking” of the DBA software would not disrupt the efficiency and would serve to streamline it for our current work flow.

Functionality - DBA Software is a very versatile package which meets our needs more than sufficiently.

Ease of Use - All steps have video instruction that covers installation to usage. The few we viewed were clear, well produced and will be easy to use to train our users.

End User Support - DBA Software had quite an impressive list of international users. They promise support utilizing a ticketing system. Again, they provide a variety of self-help videos for problem solving on site

MIE Solutions

MIE Solutions offers several manufacturing scheduling advances that we are not currently using, but may want to in the future with the expansion. They include infinite and finite scheduling, backward and forward scheduling, bottlenecks, and analytics along with excellent software for the current CRP processes. Their ERP looked easy to install, learn and implement.

Cost - The manufacturing edition with perpetual license runs about $60,000 including a 20% discount (MIE Solutions, n.d.).

Compatibility - Software is compatible with our current systems.

Work Flow Processes - MIA software emphasizes Workflow Collaboration as one of its selling points.

Functionality - MIE Software is a very versatile package which more than meets our current needs and has capabilities for expansion when we increase our plants overseas.

Ease of Use - The software is easy to use and implement and is suitable for use in both large and small organizations.

End User Support - MIE offers an automated routing system that funnels requests to the most qualified subject expert. Their support analysts have experience both in manufacturing as well as software and promise solutions within 24 hours of contact. They have continuing virtual education courses and offer the opportunity for beta testing of new applications.

ABAS Software

CTS Solutions recommended ABAS Software for ERP and MRP after a 10 minute free consultation. Their main offices are located in Germany. However, while they have the entire package to fit our needs, their strength is ERP solutions, and should we decide to try a piecemeal approach, this is the best ERP software.

Cost – Includes integrated accounting. Runs between $7,000 and $8,000 USD.

Compatibility – Software is compatible with our current systems.

Work Flow Processes – ERP system does not include.

Functionality - ABAS Software is strong for electronics, metals fabricators, automotive and tier-two automotive (ABAS Software, n.d.). It is also very strong for distribution and warehouse management. We found these uses to be important in these areas for PPQ Parts.

Ease of Use - ABAS Software is one of the smaller vendors in terms of installations in the U.S., but is well known internationally. They are focused on quality customer support.

End User Support – We were unable to ascertain the specifics of end user support as they have a password protected site for customers, however, based on references from their current clients, we felt that this system was worth looking at in more detail.

Exact Macola Software

Exact Macola Software is an ERP solution designed with “Business Process Management (BPM) capabilities” (= Exact, n.d.), Exact Macola ES includes applications that manage accounting, distribution and manufacturing activities, workflow, documents, human resources, CRM and exception management that unify the entire enterprise.

Cost – About $15,000.

Compatibility – Software is compatible with our current systems.

Work Flow Processes – Has workflow add-on capabilities.

Functionality – Uses theMicrosoft SQL Server 2003, and the menus are organized by most frequently used applications. There are many add-ons that are compatible with the ERT system.

Ease of Use – Originally programmed in COBOL, theproduct has been re-engineered to make it very user friendly.

End User Support – The company has its own technical support unit. This may not be as expedient as some of the others due to proximity.

SAGE 500

This is another ERP software that “combines management software and financial accounting functions” (SAGE 500, n.d.) claiming that they have consolidated certain organizational functions. This may mean that customization is possible for our particular needs. However, we are not even close to knowing how our needs will expand as we expand.

Cost – This product can cost anywhere from $4000 to $300,000. Continuing costs are certain as our company grows and we move from bronze to silver to gold plans for support.

Compatibility – Ties into current system for analysis and adoption into SAGE 500 systems. May not be easy to implement.

Work Flow Processes – Software needs to be added separately or created.

Functionality – The software package has the “depth and breadth of functionality with the flexibility to be customized” (SAGE 500, n.d.) and used throughout our organization to suit our needs as they arise.

Ease of Use – Overall planning can be done on a single screen.

End User Support – The company offers service, support and training programs at various cost levels (bronze, silver and gold plans) depending on the needs of a company. The pro in this is that we can adjust our support and training as we grow.

FITRIX ERP

This system is known to be flexible for the growing company.

Cost – Starts at $6,500 and may go even higher than $11,500. Includes SQL database.

Compatibility – Runs on a Linux server system. We are currently not running a Linux server system. It can be installed at individual workstations for PC installations.

Work Flow Processes – N/A

Functionality – Can support Mandarin characters. All modules can be tailored to fit business needs. Supports automatic sending of grouped documents including all accounting documents.

Ease of Use – Some users (small companies) have complained about the difficulty of use of the system and the difficulty in installing and training on upgrades.

End User Support – Like most companies, FITRIX offers support to its users in the form of help desks, software problem resolution, software patches, and new versions of FITRIX.

Recommendation

It may be to our advantage to install small upgradable systems at this time. Cash outlay in the near future may be prohibitive, and we will need to “grow” our software to fit our needs. For that reason, the committee is recommending DBA Manufacturing which will cover our CRP, MRP and ERP needs for a time. The committee felt that the other systems, while bursting with bells and whistles, were either limited for our total software needs, or beyond our current and foreseeable future needs.

= Exact, (n.d.). Retrieved November 2011 from

ABAS Software, (n.d.). Retrieved November 2011 from

DBA Manufacturing, (n.d.). Retrieved November 2011 from

MIE Solutions, (n.d.). Retrieved November 2011 from

SAGE 500, (n.d.). Retrieved November 2011 from