Kuiper Leda Gap Analysis

Gap Analysis: Kuiper Leda

Inventory management has traditionally been considered as a necessary resource that every company needed. Its primary purpose was to evaluate and control inventory from the raw material level, through the production process and control stage, to the final out-door delivery. These older models of inventory management had several issues, such as inefficient control system, long cycle time, and bureaucratic process. Beginning in the late 1980s, many corporate businesses became deeply interested in developing new inventory management system that will reduce operation cost and expand market chare. Today, the business world is still improving its inventory system. The most effective systems are now not just count products and manage production schedule, but obtain lower prices by making large purchases, and increase inventory turnover. Today, forward-looking corporations build their serious efforts at inventory management systems through implementing new technologies, involved digitization, Internet, high-speed data network, and other e-sources that became available after business outsourcing and globalization.

This paper provides detailed analysis and evaluation of Kuiper Leda’s situation and develops a management strategy that can be performed and implemented for the given issues in the scenario.

Situation Analysis

Issue and Opportunity Identification

After recent entering into the new product line, electronic manufacturer Kuiper Leda, Inc. facing a big challenge. Being a smaller manufacturing firm for ten years, company was not expecting to get a large and urgent order from Midland Motors, an American Original Equipment Manufacturer. Executive management team concerns about Kuiper Leda approach to delivering products. Always working with smaller customers, company only has a minimum capacity for producing 1,500 ECU and RFID units, which is very low value for the order requirements.

Another challenge that brought by Midland Motors is the high priority of the order. Twelve months period seems very critical deadline for completion.

Kuiper Leda has a dilemma whether company should perform manufacturing in-house, outsource job by e-business portal or subcontract one to another manufacturer, or perform the partial option. Due to the different extent of the company’s capacity, the contribution margin is varying among different alternatives of ECU and RFID production sources. Table 1 shows summary of other issues and opportunities