Case Studies Essay Paper on Pride Industries

Pride Industries

Identify the Most Important Facts Surrounding the Case

PRIDE deals in the provision of products and services produced through integrated facilities services (IFS) and manufacturing and logistic services (MLS). PRIDE was started with the sole aim of creating jobs for the people living with disabilities in America. It has faced technological problems in its production sector. The electronics surface mount technology (SMT) machines being used in the organization are obsolete. The firm’s management is in a dilemma whether to commit funds to upgrade its system to increase production or to turn down the proposal regardless of the new opportunities accrued to it. The management is hesitant to invest in the new initiative due to the amount of funds needed for the new project that is $2.6 million. However, advancement in technology world forces the company to look for new ways to please its customers who are hesitant in entering into new contract with PRIDE until the prevailing condition is rectified. Though the company has made tremendous move in the past, the future depends on the transition from old to new manufacturing technology and strategy.

Identify the Key Issue or Issues

The specific issue the firm is grappling with is in the manufacture of small electronic components using the surface mount technology (SMT). The assembly line is unable to mount and solder small components (Richard, 2012). PRIDE inc. would also consider onshoring due to low-wage in some countries. This problem is a technological issue that needs to be addressed with immediate effect. The management, which is headed by the vice-president, Steve Twitchell, is reconsidering the purchase of surface mount machines for the organization. This is because the old machines put into place were second hand products from Mexico and Singapore. Although they served the purpose, the machines were inferior in terms of quality and inefficiency in delivering services. Purchase of the new machines would lead to reduced work force since they were highly automated. This defeats the company mission of providing jobs to the disabled persons. The firm is ready for the new initiative in the sense that it craves for the new deals and prospective opportunity the business is facing in the market. Several clients have expressed their desire to partner with PRIDE for the supply of electronics devices.

Specify Alternative Courses of Action

            The alternative actions that are exposed to PRIDE as an organization includes:

  • Investing in the integrated facilities services machines.
  • Replacing the old surface mount technology line with a new one.
  • Relocating labor offshore.

Evaluation of each course of action

            PRIDE has the following alternative cause of actions to undertake in the event of upgrading its technological operations.

  • Expand its integrated facilities services to meet federal demands. This division required an amount of $5.1 million in acquiring equipment and expanding contracts through purchase of working facilities, such as trucks, office equipment, and pickups. The federal government had already shown some interest in entering into a contract with the business. This improved the company’s confidence of investing its funds in this division.
  • The next option the management is thinking about is buying new surface mount technology machines at a cost of $2.6 million. This would lead to the creation of new jobs for the disabled people in the high tech and distribution section of the company. The projected profit amount to $14.9 million with $700,000 in surplus. This would translate to a $1.5 million in sales and twenty percent increase in revenue for the next five years. Failure to do this, the company is expected to make loss of 1.5million revenue and 20 per cent decrease in revenue each year within a period of five years.
  • PRIDE is considering moving its operations onshore. The new lines would form new opportunities for the disabled people. In addition, pride would have an added advantage because of the fact that it would become the only service provider in contract manufacturing in Sacramento valley. The company production capacity would increase to $40 million or more within a year. This means that the organization is deemed to benefit from the new endeavor. Goods that require intense labor are relocated to China by PRIDE due to the reduced cost of labor acquisition. The act of moving to low wage countries has several risks in terms of total costs.

Recommend the Best Course of Action

The company will be served best by its investment in buying the new surface mount technology machines to perform various tasks. This incorporates the following components: a board loader, solder inspection machine, reflow oven, printer, and board unloader. The reason as to why this is the best alternative is because it employs a huge number of disabled persons. This complements the organization’s mission and purpose of serving the disabled by providing job opportunities while at the same time making profit. The production time will be reduced by a great deal hence improving the company efficiency and effective production activities (Suzuki & World Scientific (Firm), 2010). Consequently, the firm will benefit from increased sales and contracts by private and government institutions that demand better services. Furthermore, the quantity of the goods will increase by a huge number through the improvement of the production processes. This is a winning factor for the company that is struggling with technological factors.

References

Richard, I. (2012). PRIDE INDUSTRIES. New York: University of Western Ontario.

Suzuki, T., & World Scientific (Firm). (2010). General equilibrium analysis of production and increasing returns. Singapore: World Scientific Pub. Co.