LOCOMOTIVE PARTS CONTRACT- CASE STUDY
Worldwide (W) is one of the key players in the field of locomotive parts manufacturing. The company has just been able to obtain an important contract to supply locomotive parts to Paraguay. This report focuses on the work allocation problem at hand and makes some important recommendations. Worldwide cannot afford to take this contract lightly and for this reason, it needs to make sure that only the best people are working on this project. However since all subsidiaries are keen to grab the major share of the contract, the firm is faced with a serious challenge where it has to please the subsidiaries and also assign work to only the very best. The report analyzes the situation and recommends that strengths of each subsidiary be closely evaluated and work be assigned based on the findings.
Worldwide has landed a huge contract and now the problem of work allocation and distribution has surfaced making the company wonder if it will ever be able to please the CEOs of subsidiaries without compromising the quality of work done. American subsidiary has its own strengths while those in Spain, Argentina and other countries do not want to be left behind either.
Paraguay is a developing country with a huge potential for growth. It is now planning to revamp its entire railway system, which opens a number of important opportunities for locomotive manufacturers around the world. Worldwide must consider itself fortunate for landing such an important contract and therefore it needs to produce its best work. Quality cannot be compromised at any cost. The better the quality, the more chances Worldwide has of landing other major contracts in future.
The problem at hand is allocation of work without hurting relationship with the subsidiaries. One thing that plays the most crucial role in allocation of work is the past performance of various subsidiaries and their current potential plus financial situation. The firm must understand that just because a subsidiary is currently facing financial challenges doesn’t mean it qualifies for more work in this project. The subsidiary must have an impeccable past record and amazing performance to prove that its current financial situation is not because of its own inefficiency or poor performance but some other reasons led to financial crisis.
Apart from past performance, the firm also needs to evaluate the strengths and weaknesses of each subsidiary. For example if Argentina subsidiary is known for its quality electric parts but has received complaints about its wheel sets then it must be considered for the former only.
Worldwide can easily solve the allocation problem if it follows the recommendations given below:
Worldwide must first ask all the subsidiaries to submit their financial data and their performance records.
The firm should also carefully evaluate the weak areas and discuss the reasons with the subsidiaries.
Strengths of each subsidiary should be assessed properly.
Each subsidiary’s current performance level must be checked to find out if it has the capacity to work on this major project or not with its current resources and expertise.
The work should be divided so that one area is completely handed over to one subsidiary so there are so major differences in quality or design. For example since American subsidiary has latest technology, it should be assigned the task of structure manufacturing. Argentina for example can handle electric components like Contactors, relays and switches etc. Spanish subsidiary can be assigned the task of manufacturing peripherals like wheel-sets, air brake components, worm gear, drive spring etc.
If work is assigned according to the capacity, potential and performance of each subsidiary then Worldwide can easily solve the problem and produce its best work. It will not have to compromise on quality or hurt its relationship with the subsidiaries.
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