For Office Use

Grade:

Communication for Managers

Case Assignment No. 2

Case Analysis Report on

‘SchmidtCo’

Submitted by:

Name: Nitesh Sharma

Roll no.: 181141

Section: A

Batch: MBA-FT (2018 – 2020)

Institute of Management, Nirma University

Date of Submission: 4th August, 2018

EXECUTIVE SUMMARY

SchmidtCo a family owned business located in Philadelphia imported automobile parts from
Europe and distributed in North America. John a third generation of the family joined the
company as operation manager and realised that company was run by an obsolete system which
needed replacement. John formed a team of managers from different area who selected ERP
system as the best option for them, and with further research in market they finalised the deal
with Dtech .as the best ERP system. The consultant of the old system resigned. Company formed
installation team which intended to learn the new system from the Vendor ‘s consultant. The
installation got delayed by 3 months and went over the budget leaving the company in deadlock
situation between uninstalled Dtech and the obsolete system.

(TOTAL WORDS: 131)

SITUATION ANALYSIS
SchmidtCo was a Philadelphia based company that dealt in automobile part. It shipped 20
million pieces consisted of 10,000 SKU’s from Europe and distribute them in North America
(refer Exhibit 1). The company was involved in huge volume operation which was managed by
18-year-old system whose vendor went out of business after the purchase of the system. The
company hired the consultant. he took care of the customization of the system in exchange of
$120,000 for a week (2-3 days per week).
John, who belongs to the third generation of the family had great knowledge about the company
and had past experience from USAir force (refer Exhibit 2). He joined the company as operation
manager, being visionary he realised the importance of the inventory management and the
integrity of the system for the growth of the company.
The staff of the company although aware about the obsolete system was comfortable it. John
recruited a team of 8 managers from various areas of the company to address the requirement of
the critical modules of the organisation (refer exhibit 3)
John’s team which included a consultant came to conclusion to incorporate ERP (Enterprise
requirement planning system) for the company, it’s a fully integrated system which connect all
the critical module of the company and the best solution of inventory management.
Selection team spent a period of 3 months to narrow down the choices to three followed by two.
They chose Dtech system’s superior functionality in warehouse and inventory management over
the runner up’s large installation base of several hundred system. The system costed them
$400,000 including installation charges. The company expected the installation period of 6
months from December, old system would be used in interim. The consultant two took care of
the old system resigned as soon as he got informed about the purchase of the new system by
Schmidt CO.
Schmidt Co selected 10-person implementation team for managing implementation internally,
the team was supposed to work with D-tech consultants, where they would learn first about the
basics of the new system then module by module learning the key process required for their
system. It involved the testing of the system with hypothetical data, followed by the suitable
modification for the system.
In parallel IT manager could not convert the data from old system into new and design of the
report that system would generate. However, by march, Schmidt co realised that implementation
was not going well, and had involved $600,000 on the new system. The implementation team
learned the key process however there were some problems faced by them.
David was hired as an acquittance to take care of the sales side of the company, he had great
experience in the sales as well as IT process. He did his MBA from MIT, and had worked as
electrical engineer in big corporates as IBM and Intel. He also felt lack of effective support from
the software vendor. He was interested to join SchmidtCo as Chief information officer.
John met the D-tech VP and brought his attention to implantation process who accepted their
mistake and changed their key person involved in the consultancy team and recommended John
to recruit IT person who could manage Schmidt co. problems.
John’s father wanted John to be cautious about the expenses was reluctant to add headcount,
probably because of high recruitment cost. Delayed implementation raised the question over
their choice for DTech.

PROBLEM STATEMENT
The company is at the dead end where the consultant who worked for the obsolete system had
resigned and the system was not performing up to its level, on the other side the Dtech
installation was delayed by 3 months and had exceeded the budget limit.
The company can’t further delay the project as further increment in cost will affect the finance of
the organisation

OBJECTIVES
The objective of the company is to install the suitable ERP system that can bring the integrity
between the modules of the company and can run the operation smoothly for the long time which
at long run would help company to establish strong customer relationship, promising the growth
of the company with increasing net profit

OPTIONS
➢ To buy the runner up vendor for ERP system
➢ Making installation process in phase.
➢ Recruitment of Goldberg as Chief Information Officer
➢ To change the company’s recruitment and dissolution policy.
➢ Decentralisation of the power in the company.

EVALUATION OF OPTIONS
SchmidtCo may opt for the runner up vendor for the ERP system because the vendor had a
strong base in USA, which infers that installation process was punctual, consultant could be
easily found in case of emergency although the overall cost would go very high.
Other option is to go for installation process in phase which would be easy to monitor by John
however here the company had to wait for a long time to use it. Company should recruit David
Goldberg as he had great expertise in the IT department but this would increase the headcount
which John’s father would not prefer.
 Company should change its HR policy where the innovative and skilled employees should be
recruited and the inefficient one would be sacked off, the company should also go for
decentralisation of power, which would motivate the employee, quick decision on technological
advancement and the responsibilities on John’s head would dilute.

Option _Objective Matrix

Options Customer Increase in productivity Increase in financial
satisfaction cost
Runner up vendor Yes Yes No
Installation process in Yes Yes No
phase
Change in recruitment No Yes Yes
policy
Decentralisation of power No Yes No

DECISION
John should change the ERP system vendor as the company was in deadlock condition, it should
recruit David Goldberg as he had past experience in the IT sector. He should decentralise the
power as it would motivate the employees and John could find sometime for other activities.

ACTION PLAN
John could recover some portion of $200,000 which he paid to Dtech and buy ERP system from
runner up vendor. He could also change the recruitment and dissolution policy which would
ensure skilled employees in the company and make sure about the upgradation of the system
with time.

CONTINGENCY PLAN
➢ The company can find the alternative of the ERP system, which could work in the case
ERP or the old system fail.
➢ Company should search for the consultant who could work with old system or hire back
the former consultant who can revives the old system in case if old system fails.
Exhibit 1: Company basic information
Company name SchmidtCo. (family owned company)
Established 1950
Warehouses Philadelphia(primary), Los Angeles, New
Mexico (satellite)
Deals in Automobile spare parts
Import from Europe (21 manufacturers)
Distribute North America (thousand destination)
Volume size 20 million pieces (10,000 different items)
Number of employees 90
Company worth $40 Million

Exhibit 2: John’s profile

Name John
Relation with SchmidtCo Grandson of the founder of the company
Education Qualification BS in electrical and MS in Electronic engineering
Designation in SchmidtCo Operation Manager
Age when joined SchmidtCo 30
Experience in SchmidtCo 5
Past experience Served as Electronic warfare officer in U.S. Air force
Exhibit 3: Different modules and their details
Modules Details
warehousing Control of shipping, receiving and storage function
Inventory Control of inventory transaction
Accounting Collection of all information related to accountings
Purchasing Generates recommended purchase orders and track open orders,
forecasting sales on an item level
Sales and customer Tracking of open sales orders, quotes, shipments, complaints and
relationship leads.
management

Word count-1076
 UNDERTAKING

To Whom It May Concern:

I, Nitesh Sharma hereby declare that this is my original work and is not copied from
anyone/anywhere. If found similar to other sources, I shall take complete responsibility of the
action, taken thereof by, CFM Team.

Signature:

Name: Nitesh Sharma

Roll no: 181141

Section: A

Batch: MBA-FT (2018-20)

Date: 4 August, 2018