The client’s requirements
The objective of this report is to carry out an analysis of the present Information system used in OMEGA, recognise the problems encountered using it, study the requirements of the client and to propose a better strategy to fulfil the client’s requirements. Omega Electronics is a privately owned company committed to the design and manufacture of Voltage & Current Operated AC / DC, General Purpose Relays, Power Relays, Custom-Built Special Purpose Relays and Instrument transformers. Initially trading in these equipments, OMEGA subsequently expanded its operations to become a manufacture in the domestic market.
With fierce competition from the domestic and global companies, it is necessary for OMEGA to recognise a need to develop and improve not only its existing Information System but also e-commerce capabilities if it was to survive. OMEGA has highlighted a need to create efficiencies and cost reductions in their business and operational processes. Based in Gujarat, India, OMEGA was established in 1993 by Mr. Debal Dasgupta and Mr. Arunim Bandopadhyay. With only 20 employees and a small workshop in 1993, the company has expanded today having a manufacturing facility of more than 27000-sq.
ft. in Baroda and a work force of 285 employees (mainly technical). OMEGA at present
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Initially started as a trading company in Electrical Equipments, OMEGA subsequently became a dominating manufacturer in the domestic market. Rather than involving distributors, the company changed strategy with products being supplied directly to the retailers. This strategy proved particularly fruitful as by 2002, the turnover improved by 40%, a solid achievement in a highly competitive marketplace. According to Mr. Bandopadhyay, the market for OMEGA products is continuing to grow. The market is currently enjoying a very high sales growth.
Even though sales remain healthy, major pressure continues on price because of the tight competition. The company operates in a highly competitive market place facing stiff competition not only from the domestic companies but also from other multinational companies. For a relatively small company, OMEGA has been extremely successful so far in its marketplace. OMEGA feel that they maintained a competitive advantage due to their ability to design and manufacture products efficiently and at lower cost of production and also because of their focus on customer service.
This has attracted more and more customers to their products. To sustain and increase the growth of previous years, OMEGA has embarked upon an aggressive 3-year business plan. To achieve it’s targets, OMEGA has highlighted a need to create efficiencies and cost reductions in their business and operational processes. System Integration and streamlining will be supported by the strategic development of an Information System to support day-to-day operations and business processes. Procurement of raw materials from other suppliers is paper based and time consuming.
OMEGA is using the Japanese originated Kanban method to reduce the volume of their holding stock (Kanban – hold enough material for weekly/daily production minimising inventory). Although this process is helpful in reducing the stock overheads, it is increasing the amount of administration required to maintain correct levels. From the raw materials arriving at the plant they are logged into goods received, booked onto the factory floor and checked out as final products. Management and monitoring of this within the company is increasing the costs.
Also, the human resources account for a significant portion of the company’s overheads. Activities such as raw material scheduling, procurement, tracking, delivery and payment attribute to these costs. As OMEGA is expanding its market share with more customers and a wide range of products, process errors of one or the other kind is increasing. On examining the fact that in order to double the sales to meet their targets, the number of administrative staff would have to be increased proportionally to sustain the planned growth.
This would mean extra cost, which is not viable in the long term. In order to streamline processes and cut down on such costs, OMEGA finds a need to automate internal operations. Increasingly customers, themselves, now want to have a greater control over the manufacturing process. So, to make this proposition more attractive to customers, OMEGA needs to provide state of the art manufacturing processes. Streamlining and automating all stages of the operation to allow them to build trust and attract more significant deals.
One of the potential customers wants to track the whole production process from goods inwards, right through the manufacturing and dispatch. Each component of every finished product therefore needs to be traced in such an operation. OMEGA has developed a reputation for being extremely flexible with customers and makes great efforts to accommodate any last minute orders. As a result, OMEGA finds it very difficult to both predict these events and, in turn, forecast demand. The company wants to acquire this ability to aggressively approach customers.