GUIDELINES FOR CASE ANALYSIS The case method is an important tool in educating managers by allowing students to “bring to life” conceptual material that is often difficult to understand without application; and to aid in integrating tools and concepts you have learned in previous coursework by applying them to relevant management decisions. The cases used in this course are a record of issues and problems actually faced by business executives, with supporting facts, opinions, and financial data on which decisions were based. These “real-life” situations are summarized by casewriters who provide you with all (and perhaps more) of the relevant information that was available to the decision makers involved. If the information presented seems incomplete, remember this only mirrors the business world reality of decision making with limited information. Obtaining more information costs time and money, resources which are scarce in most situations. Each case, like each management situation, is unique. Since there is no one best procedure for solving problems or making decisions, there are no right or wrong answers in case analysis. Each class member will approach the case in a different manner. However, the following procedure can serve as a rough guide to your analysis which can be fine-tuned to personal tastes: 1. Read the Case. The first step is to get acquainted with the situation. Read through the case quickly, getting a general feel for what is going on. Who are the main players? What types of information are available to you? Go back and reread the case carefully, paying particular attention to case facts, figures and diagrams. Be careful to separate symptoms and problems. Casewriters will often flag important issues by italics, headings or questions at the end of the case. 2. Define the Problem. Put yourself in the place of the decision makers in the case. What are the critical issues? Does one problem stand out as primary, with other problems secondary or contingent upon it? Establish a time dimension to the problems; which problems demand immediate action, and which are long-term or strategic in nature? What critical assumptions are being made by the decision makers in the case, and how do these assumptions influence their chosen strategies? Try to state the problems so as to identify: (a) who must take action, (b) why action must be taken, and (c) when? 3. Build your Analysis. Gather the important facts and concepts in the case, and discard unimportant or fringe issues and data. Build a theme for your analysis, and establish the importance of the problems you have identified. Incorporate your knowledge of cultural impart on the situation, financial analysis, accounting techniques, marketing methods, economics, and human behavior into your analysis. Put theory to work in your paper, by using concepts from the readings and lectures to analyze the problems and issues and explain why they require responses by management. 4. Develop Alternatives. Examine the alternative courses of action that are available to the firm. Make a list of the advantages and disadvantages of each. Don’t use “straw-man” alternatives (those which are patently unfeasible or undesirable). Develop a few, well-reasoned responses which could solve the problems and critically evaluate them. 5. Make a Recommendation. Based on your analysis of alternative courses of action, choose the best and recommend this course of action. Be specific in your statements. How will your recommendation be implemented? Circle back through the case to identify possible points of inconsistency between your recommendation and case facts. What potential problems might crop up? How will internal constituencies (e.g. management, employees) and external constituencies (e.g. competitors, stockholders) react, and how will you handle their responses? What assumptions have you made in developing your recommendation? CASE STUDY REPORT FORMAT GUIDELINE Following is a suggested guideline for preparing your case study reports (remember to always use Harvard Business Style for all formatting and referencing as per the course outline): Cover Page (Include student names and student Ids) Executive Summary (If appropriate – should be written last to focus on key points/findings) Introduction Current Situation Analysis and pertinent Background including a synopsis of the relevant information from the case analysis tool short form. Body May include:  Target Market Identification  Market Needs  Forms of IMC in use  Analysis of Case  Key Issues/Goals  Recommendations Should include:  Decision Criteria  Assumptions  Data Analysis (analysis in appendix and summary info in body)  Preferred Alternative with rationale.  Justification/Predicted Outcome: It is important that all guesstimates or creative ideas be founded upon some marketing rationale and a solid understanding of the metrics related to the target market and anticipated financial changes/impact. Using target market analysis and education estimation of population, $, and units is appropriate. If you are not confident in your ability to do so...PLEASE FEEL FREE TO DISCUSS “HOW TO” as a team with the professor well in advance of your case presentation. Conclusion References Recommend that you source business journals, periodicals, and textual references as well as any online research. Make sure you support your ideas with facts and figures. Please try to use your own words and Teaching and Case Studies, Vol. 5, Nos. 3/4, 2014 265 Copyright © 2014 Inderscience Enterprises Ltd. The case for operational management: Millennium Printing Press Company Song-Kyoo Kim* W. SyCip Graduate School of Business, Asian Institute of Management, 123 Paseo de Roxas, Makati City 1260, Philippines Email: [email protected] *Corresponding author Derrick Candelaria Sanford Marketing Corporation, J.W. Diokno Boulevard, Mall of Asia Complex, Pasay City 1300, Philippines Email: [email protected] Abstract: This paper deals with the operations of a printing press company in the Philippines and provides the analysis to stay competitive in the package printing market. The owner of the company claimed that they had already experienced steep declines in their monthly revenues and was in the verge of closing down if it did not make changes to its existing operations. The purpose of this case is to show the students the importance of being able to pinpoint the problem in the operations of the company and be able to make the correct changes so as to achieve the optimal efforts for the manufacturing operations. It also takes into consideration the main product of the company and its limited resources thereby making the decision depend mainly on the accurate use of the operations tools. Keywords: printing operations; operations management; process workflow; process analysis; operations case study; manufacturing process; Millennium Printing Press. Reference to this paper should be made as follows: Kim, S-K. and Candelaria, D. (2014) ‘The case for operational management: Millennium Printing Press Company’, Int. J. Teaching and Case Studies, Vol. 5, Nos. 3/4, pp.265–275. Biographical notes: Song-Kyoo (Amang) Kim is an Associate Professor at Asian Institute of Management, Makati, Philippines. He had been a Technical Manager and TRIZ specialist of mobile communication division at Samsung Electronics and he is involved in IT industries for more than ten years. He received his Master of Computer Engineering (1999) and PhD of Operations Research (2002) from Florida Institute of Technology. He is the author of more than 30 operations papers focused on management and systematic innovations. Derrick Candelaria is a Senior Leasing Manager at Sanford Marketing Corporation (SMCo). He was a member of Innovation and Operations Laboratory and received his MBA degree (2012) from Asian Institute of Management. 266 S-K. Kim and D. Candelaria 1 Introduction Millennium Printing Press had been a printing press company founded in the late 1980 and was claiming to experience sudden sales declines due to the change in management and inability to provide customer demands in terms of turnaround time for the customer orders. After the death of Stanley, Mr. Stephen So, his eldest son of Stanley So, took over the company and re-evaluated the company operations to be able to make the necessary changes in order to make their turnaround time competitive enough to satisfy and satisfy customers. Stephen needed to identify properly the inefficiency that the company was experiencing to be able to generate a solution for the situation. This would be applied to find which operation was the most inefficient or the bottleneck. After year 2010, the company was in a bad situation and was in a position where they must make the right decisions based on what their findings, otherwise they might lose money and even worse, close down operations. 2 Company background Millennium Printing Press was founded by Mr. Stanley So in 1988 and was located in Galas Quezon City, Philippines on a 400 square metre lot of the family owns. During the early days of the Millennium Printing Press business had been lucrative and there were more interested customers than the company could handle. Mr. Stanley was a very passionate person when it came to his business. All his employees did everything in their power to be able to fulfil any customer to satisfy their requirement. There was even an instance when they accepted a customer who requested for a truck-sized poster which was beyond the capacity of the machines being used at Millennium Printing Press. Although this entailed huge amounts of additional labour, they still accepted this order and delivered it to the customer on time. This strategy made them win a lot of loyal customers throughout the years. In the end of 2012, Stanley passed away due to a sudden sickness. His son, Stephen So, who was still in the process of being trained to take over the business, must know all the operations of the company even before he was really ready. Initially, he wanted to implement some changes in business operations since he thought some of them were inefficient. Majority of their sales demand came from paper-based cigar package printing. He was in the process of reassessing all of their operations and finding how they could maximise their efficiency on 2013. The option to buy newer equipment or just continue running the same operations would depend on his decision based on the analysis of the present business operations. He believed that switching to another industry was not a smart idea because the printing industry was still very profitable despite all the advancements in technology and the growing popularity of internet-based materials. In reality, as the fast moving consumer goods industry flourishes, more and more printing services would be demanded. The case for operational management: Millennium Printing Press Company 267 The printing operations of Millennium Printing Press were similar with what other printing press companies were operated. They catered to all kinds of printing needs whether a poster, a book, a magazine as long as it involved needing to print something. The strategy was accepting any kind of printing requests and hoping customers to appreciate their services as lifelong partners. Their main product had been printing the paper-based cigar packaging, such as folding cartons for cigars and it had have stable demands annually. The biggest client of the company at the moment was Tabaqueria De Filipinas, who sold handmade cigars in the Philippines (see Figure 1). These products were available in all of the major supermarkets and tobacco stores nationwide. The other products that they cater to were in the printing of posters, brochures, catalogues, business cards and tarpaulins. Figure 1 Tabaqueria De Filipinas cigars Source: AJ Cigarettes (2014) In the early 1990, competition of the package printing had been not that stiff and the printing company had 55 employees in 2004. Late 2010, the company had already downsized their labour force and only has 11 employees left. The company peaked with their performance having annual sales revenue of 20,250,600 pesos which was a huge jump from their average annual revenue of around 12,000,000 pesos in 2004. This revenue increase was the result of the local elections on that year and it made the sudden jump of their demand volume. The company was fortunate to become the government candidates to be hired for their printing services. In 2013, the company needed to re-evaluate their product operations in order to improve their efficiency and hopefully turn their monthly performance around. 268 S-K. Kim and D. Candelaria 3 Competitive landscape San Miguel Yamamura Packaging Corp (SMYPC, 2014) continued to account for a large percentage of paper-based packaging in the Philippines, with its corrugated box plant in Davao City. In the end of 2010, the company also acquired the largest packaging firm in Australia, Cospak Group, with three production facilities in Auckland, Sydney and Guangzhou. Cospak was responsible for keeping SMYPC supplied with cartons and carton dividers. Papercon Philippines (Papercon, 2014) was another large producer of paper-based containers in Philippines. Established in 1963, it continued to excel in producing folding cartons and labels for consumer product packaging. Another company with a corrugated carton plant was Asia Brewery, a sister company of Fortune Tobacco Corp, a majority stakeholder in cigarettes in the Philippines prior to its acquisition by Philip Morris Philippines Manufacturing. There had been no major issues faced by paper-based package printing companies until 2010. After 2010, the playing field had been highly dynamic with many relatively small companies cropping up and offering labelling services for many packaging opportunities. It was seen as a trend brought about by the increased digitisation of printing presses in Philippines, with its becoming easier to offer services to layout and print simple paper-based packaging for the smaller businesses as well. Among the three major packaging companies that also catered to printing services in the Philippines, the major competitor of Millennium Printing Press was Papercon Philippines, a printing press corporation who served the major fast-moving consumer goods (FMCG) companies in the Philippines. Their ability to serve huge capacities made them the best choice for companies that had huge volumes of orders for printing services and wanted their orders at the shortest turnaround time. Although these companies had similar products as Millennium Printing Press, both companies had the same tobacco companies as their major client. The printing demand was elastic for such companies since the more demand they had for their product, the more printing services they would be subscribing for. Being part of the small-medium enterprise segment, the minor competitors were other privately owned printing press companies such as Reynan Printing Press (Reynan, 2014), Banting Printing Press and JAV Printing Press. The business model for the companies was similar to one another and these companies target any kind of customer that has any kind of printing needs. 4 Operations of millennium printing press The paper-based cigar package printing provided around 70% of their annual sales revenues of Millennium Printing Press in 2013. It meant that cigar paper-based package printing was the major source of their sales revenues. The company on the average got orders of 100,000 printing papers which considered as one business order. For January to June 2013, the company got an average of around three business orders per week. Their operations run five days a week. Their orders varied in finishing time depending on when the orders were placed. Usually, weekly demands range from 1 to 5 orders except for the weeks of November and December (see Table 1). The case for operational management: Millennium Printing Press Company 269 Table 1 Weekly order demand distribution between July 2012 and June 2013 July August September October November December January February March April May June Week 1 3 1 5 2 10 15 8 2 1 3 4 2 Week 2 2 1 4 3 12 18 4 2 3 1 2 2 Week 3 4 2 2 4 16 16 3 3 2 4 3 4 Week 4 3 2 2 2 17 18 2 3 4 5 3 3 270 S-K. Kim and D. Candelaria The company, for the past few years, had been focusing on the production of their main product, the paper-based cigar package prints. In order to solve operational issues, the framework to identified the process was required it also helped to understand the current operations. The operations logic was the framework to describe the operations of the system. It used to identify all relevant elements of a process improvement project before analysing the process. The operations logic was similar with SIPOC diagram (Simon, 2010) but it was more general to describe the operational process. Based on the operations logic (see Table 2), Mr. So could find the starting point how to design, planning, control and improvement of the process. Table 2 Description of the operations logic Factors Descriptions Remarks Target The output of the operations and what should be improved (DCQ). Classically, the final products are outputs but it is not always the case. It depends in the objective of the process. The audience is also concerned because it may determine the scope of process. Delivery, cost, quality Resources Anything that is directly related with the current operation scope. Cost and time are typical resources but customers, demand, raw materials may also be considered as resources. Human resources, budgets, time Interfaces The input and output of the process. Typical interfaces are the peak hour demand (input) and the product (output). But it can be anything such as raw materials, products even Internet data and budget (money). Input and output Process One of core part for operations management. As an operational manager, students must know how to deal (design, planning, control, improve) with the process. First step is designing the process based on the situations. Process flow (diagram) Environments The things that are indirectly related with the current process. Market sites and other connected operations and limitations of process analysis are typical examples for environmental factors. Substitute, competitors There are eight workers are fully worked during their day time for printing press process (see Table 3). Five non-skilled workers are dedicatedly assigned for finishing touches task and three skilled workers who have worked more than ten years are covering the whole cigar cover printing process. Since the area of where the location of the company is near a huge informal settler area, hiring additional non-skilled workers was not a problem for the company. In addition, the employees of the company