Professional Documents
Culture Documents
I. Analysis
Ben Lawson’s main concern in the case presented is how to ensure success
of his business, Custom Fabricators, Inc. (CFI), in the long run despite threats
brought about by some changes in the business strategies of its only customer,
Orleans Elevator (OE) and possible competition from Mexican companies.
The relationship of Ben’s company with OE has strengthened over the years.
OE has provided more and more businesses to CFI since it has been an excellent
supplier with its practice of Lean manufacturing, which supplied OE exactly what
they wanted when they wanted it, without waste and through continuous
improvement. As for OE, CFI has provided customized products (sub assembled
elevator parts) at lower cost and helped in reducing inventory and space which has
its respective costs for OE.
II. Recommendation
Short-term:
• Buy out or merge with the manufacturing plant in Bedford. Banking on their
good long term relationship, this would lead to streamlined operations and
provide products with lower costs and high quality which would be difficult for
Orleans to refuse. It will make them much more marketable to OE and much
more competitive with other suppliers. Retaining their close proximity to OE
would also contribute to lowering product costs at the same time maintain the
speed in delivery time.
• Begin expanding and diversifying. Currently, CFI is a single product shop
specializing in certain parts for one company. They should be able to
diversify their specialties to incorporate other fabrications for other products
in varying industries. By acquiring or partnering with Bedford and capitalizing
on their modern technology and talented employees, they will be able to
diversify their final product making them more marketable to other
customers.
Long-Term:
• Become a public company. This will raise needed funds in order for the
company to expand and with new customers; they can open other shops in
strategic areas of the country perhaps near other large manufacturers who
could benefit from their products. Going public will also help market their
company when people can begin to familiarize what the company can
provide.
• Become an international business and apply a global strategy. Take
advantage of low cost raw materials and labor that other countries offer.
Exhibit A – Analysis of Internal and External Factors
1. There was no guarantee to the Mexican 1. Orleans is trying to reduce cost of raw
bidders that the contract would go to the lowest materials and considers outsourcing
bidder. materials from Mexican suppliers posting a
problem in communication and possible
2. Bedford plant will be given the option to delays of raw material deliveries.
negotiate price during the bidding. Maintaining
Bedford plant services would be more 2. The quality of Bedford plant’s product was
advantageous for CFI. not up to par due to poor welds, and the
heat treating process not being completed
properly.
Exhibit B – Custom Fabricator, Inc.’s Critical Success Factors and Core Competencies in
Operations
Strengths Weaknesses