Euro Computer System

I.                   Effectively Operating OFC

Based on customer complaints to the current measure of efficiency being used by the OFC, the customer complaints about heavy DHL bill since OFC order fill rate only 43 % and they need approximately three to four weeks to fill incomplete order.  The heavy DHL bill arise since delayed order fill force the customer to make double delivery and payment since the order are deliver in distinct day.

An effectively operatoing OFC should deliver the higher order fill rate so they could cut the customer complaints.  To make it so, they must do something on its operating system.  Based on analysis of Euro Computer System operating System, especially on its inventory control.  These are things that OFC should do to deliver as desired output:

a.       Improving Their Delivery System

If the product is incomplete, do not deliver it in separate product to the customer since it will burden the customer of havy delivery cost.  Better if the company send it in complete version so its wont burden the customer since the delivery cost is cheaper.

b.      Improving Ordering System

Euro Computer System don’t ever promise uncertain things, in this case the delivery of product.  They must look to their condition of production first before they promise to customer about the delivery of the product.  If they promise without looking at their condition first, and meanwhile suddenly they cant fullfil demand from the customer

II.                Euro Computer System Process

The current process begins in marketing division. They generated order once a week and passed to the OFC (Order Fulfillment Center). The OFC write down the arriving date of the orders. After that, OFC put the orders in the order bin. And the fillers enter the number of orders into the computer. The computer will tell the location of the terminal for the orders. The next step is they pull the terminal and write down the amount pulled on order card. If there is a condition that the terminal is not available, they will write down absence on the order card. For the condition that terminal is available. They put the terminal in the dock. The terminal will get into the shipping box and the last process is the terminal is moved to the inventory area.

Since, the process is not real time, OFC cannot figure out when there is a lack of inventory in the inventory area. The problem in this process occurs when the terminal is not available. OFC must always control the order card to prevent the unavailability of the terminal inventory.

Hereby the Flow Process Chart from the system

III.             General Change

a.       Short term change

-          Improving Their Inventory Strategy

To improve Euro Computer System in Short time, the most possible strategy is change their inventory strategy.  Until this time, Euro Computer System implements low stock policy for their terminal component. Whereas we know that terminal component production is very complex process and can’t be done in short time.  My suggestion is, even the inventory cost will increase, Euro Computer System should implement difference inventory strategy, such as leveling or make to stock.

b.      Long Term Change

-           Improving Their Information System

Based on what I see on Euro Computer System, they do not have “good” information system.  They still use traditional information system, as they write the card and the level of their inventory on report card.  For a big company, the flow of information is very essential, the information must be real time.  As we see in Euro Computer System information system, they are not real time so each division do not know the status or condition of other customer in a quick way resulting unresponsive operation system.

-          Improving Their  Inventory Layout

Based on the case, we can see that the computer used for checking inventory record is located 100 feet to the right of the bin whre the order stored.  The operator must check the number in order bin using computer that used for checking.  This layout is not good since the orders bin  and the computer used for checking inventory record has a strong relationship so they should be located close each other. 

They also have strange layout for the bin and the dock.  The dock are located in the opposite end of building from the bin and separated by inventory stockroom in the middle.  It strange if we look from the process.  If we consider process, the dock should be located at the middle and the inventory stockroom is at the opposite end of the building since the process in the inventory room.

-          Managing Their Inventory Item Positioning using information system

Euro Computer System using an inventory system that write down the location of each terminal when the order first pulled.  This system will make the inventory positioning rigid and the management of inventory item in warehouse will be more difficult.  It is better if the Euro Computer System placing terminal component based on its production the inform to the filler through such as Enterprise Resource Planning about the location of the item.  So they do not face a difficulties when managing their inventory.

IV.             Additional Information Needed

There are some additional information needed if I want to do a complete redesign of the OFC, they are

a.       Demand Management Information

Demand management information including data about demand forecasting, previous  demand of the product.

b.      Supplier Information

This include the information about list of supplier, their lead time, their product price, their product specification and etc

c.       Financial Statement

Financial Statement are needed to add other consideration while we are going to implement an improving strategy

d.      Competitor Information

Competitor information will decide the  most suitable strategy to be applied in improvement system.