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Acuscan, Inc. Case Study

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Custom Fabricators Inc.

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This paper will summarize the case, identify the role of operations management at Custom Fabricators Inc., and answer six discussion questions pertaining to the following:

1 How does Ben Lawson's Custom Fabricators, Inc., create value for Orleans?

2 In the past, what has been Ben Lawson's competitive advantage in keeping the Orleans business?

3 Have Orleans' priorities changed?

4 Should Ben change his business model?

5 How should Ben position his company in the value chain?

6 What should Ben do to ensure his company's future success?

Custom Fabricators Inc. Case Analysis

Ben Lawson, CEO of Custom Fabricators, Inc., has done a lot of business with Orleans Elevator in Bloomington over the years but wonders how long his business relationship will continue. Initially Ben's organization was making the custom control panels for the elevators. Since that time the company has gotten a lot of other business from Orleans Elevator. Ben's organization now makes all kinds of special brackets and panels for the plant. Over the years a lot has changed with "outsourcing", Ben's company now makes the entire control panel, complete with the buttons and the wiring harness. One of the biggest money makers for Ben's organization is the elevator motor housing they custom fabricate in the shop and ship directly to the site where the elevator is being assembled. Ben is really getting concerned with the future of his custom fabricating business. Orleans Elevator is now trying to further reduce cost associated with its elevators, through the cost of the raw materials. The idea is to contract with Mexican suppliers, and capitalize on the lower labor cost in Mexico. This in return would lower their overall cost associated with the elevators. Ben is concerned with how well a Mexican plant located in central Mexico near Monterrey can supply these parts. Problems that are incurred with the Mexican plant due to communication, quality, and transportation could produce devastating results for his operation. Ben is also concerned with other issues that Orleans Elevator might be contemplating such as are they seeking additional suppliers for his business? He is also concerned that his difficulty working with the Mexican suppliers gives someone at Orleans Elevator or possibly in Mexico the idea of taking over his business and outsourcing totally from Mexico.

The role of operations management at Custom Fabricators Inc. is the design, operation, and improvement of the systems that create and deliver the organizations primary products and services. Ben Lawson has applied operations management concepts through process analysis, facility layout, and capacity to his organization. Custom Fabricators utilize the role of operations management through classic performance objectives of the operations management function. These are commonly summarized as: quality, flexibility, speed, and price or cost of production.

Creating value is provided through services to internal and external customers of an organization. Such services can be divided into core and value-added services. The core services customers want are products that are made correctly, customized to their needs, delivered on time, and priced competitively. Value-added services are those that make the external customer's life easier. It can also add value to internal customers by helping them better carry out their particular



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