Module 4: Operations and Process Management | |
Unicon Concrete Products (H.K.) Ltd Case Report
April 1, 2010
Unicon is a major player in the flourishing Hong Kong market for pre-cast concrete products and Mr. Li, the deputy managing director is pursuing the idea of “blanket” approval for Unicon’s custom design concrete products with one of it’s largest customers, the Hong Kong Housing Authority. This proposition could offer savings to both Unicon and the customer but this could adversely affect the relations with other customers and the manufacturing operations. If Unicon is to stay competitive in the ever expanding market, management must have a plan to
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Unicon has to be careful that this will not impact the other customers or the direction of the market as a whole. Unicon seems to be concentrating on one customer. Unicon should see that both marketing and manufacturing are aligned so all customers benefit. I guess the biggest advantage is less time and energy would be needed if product designs were needed and Unicon could respond to customer demands sooner. Facades and slabs could be a stocked item which would allow for immediate delivery. The main disadvantage in a “blanket” approval is that if Unicon gets it then the competitors would also get it, this stands to reason. This standardization could lead to all customers and then customers could interchange one firm’s product for another. This relates to product life-cycle. If an organization can react to design changes and made to order would no longer be a barrier, facades and slabs would be a stock item and purchase decisions would be based on cost and availability. (Exhibit 1) This would open the doors for the low cost competitors from mainland China to flood the Hong Kong market. If the blanket approval is not pursued then product standardization will most like still occur but will be much slower.
With regards to the capacity issue, the data provided in the case shows that 80 new blocks would be available for tendering from Sept. 1997 to Aug. 1998. If Mr. Li’s data was correct, there was a big shortage of capacity. The