Kuiper Leda Case Study

Kuiper Leda

Terri Estrada

University of Phoenix

ON05MBA06B; MBA/550

David Gobeli

April 26, 2006

Situation Analysis and Problem Statement

Kuiper Leda is a supply chain manufacturer of Electronic Control Units (ECU) who also assembles Radio Frequency Identification Devices (RFID). These devices are used to facilitate inventory control for many companies. Midland Motors, an American Original Equipment Manufacturer (OEM) purchases these products in big quantities from Kuiper Leda as well as other OEM’s..

Kuiper Leda has been successful in the product lines it produces and distributes. The company has had an increase in customer base over the past few years and the company has developed an Enterprise Resource Planning (ERP) system to maintain its customer and supplier information. With the implementation of the ERP, Kuiper Leda understands that it is in the company’s best interest to use a leaner sourcing base to reduce administrative overheads and procurement costs. The process of determining which suppliers to use can be lengthy and initiating the process immediately is crucial to implementation of the ERP system. One important concept when implementing this system is to ensure proper backup of suppliers is available while keeping the sourcing base to a minimum.

Situation Background

Kuiper Leda has been supplying Electronic Control Units and Radio Frequency Identification Devices to Midland Motors and other OEM’s to manage inventory. Recently Midland Motors placed an order of 250,000 Electronic Control Units and 35,000 Radio Frequency Identification devices, a quantity that would be extremely beneficial to Kuiper Leda. The Electronic Control Units are used assist Midland Motors to facilitate inventory control in their factory and are placing their order to be distributed over a one year production cycle in order to benefit from volume purchasing.

Issue Identification

Kuiper Keda has been given an order for a substantial amount of product that will over exceed their current production capacity. The company needs to evaluate its manufacturing capacity in order to fulfill the annual order placed by Midland Motors to determine if alternatives for production will need to be addressed such as outsourcing and the cost benefit of those alternatives.

Opportunity Identification

Increase demand of products from Kuiper Leda will result in an increase in production expanding the business and profits. If Kuiper Leda is successful at meeting the required quantities on the order and shows Midland Motors that it can meet their need with anticipation of additional quantities along with other customer orders, the contract will have an opportunity for expansion for future consistent orders, increasing the company’s market share and profits.

Stakeholder Perspectives/Ethical Dilemmas

Determining which suppliers to use careful not to tarnish any important relationships they currently have with their customers is a primary issue to be addressed by Kuiper Leda. Hasty decisions could cause friction between all suppliers and result in limited supply of components, not being capable of completing production requirements by customers, and loss of profits and accounts. Kuiper Leda also needs to take their outsourcing partners into consideration. If they outsource most of the product to other agencies, Midland Motors will consider using that company directly if Kuiper Leda cannot meet their production requirements. Another area to consider is the cost of outsourcing versus expanding in house production and determine if outsourcing will benefit or lose money for the company just to meet production requirements for Midland.

Problem Definition

Kuiper Leda lacks the necessary production capacity to maintain the quantities required to fulfill the orders for Midland Motors in addition to orders from current contracts and new customers. Midland Motors has placed a large order for Electronic Control Units and Radio Frequency Identification Devices to Kuiper Leda for inventory control. With current capacity situation at Kuiper Leda, the increased load will put Kuiper Leda over its production capacity. With this, the company may not be able to meet the demands of Midland Motors resulting in a loss of its biggest contract.

End-State Goals

The first end state goal is to implement the Enterprise Resource Planning system