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Outline
This White paper analyzes the case study about the Automated Production Control System Case of the Ajax Company. The paper identifies and describes the associated risks pertaining to the two alternatives under consideration. The report has been prepared in the form of a White Paper.
Description of Problem and/or Need
In have decided to implement a project that aims at automating its production planning and control systems, the Ajax Company is faced with the issue of deciding amongst two options in the context of feasibility in performing the required functions and to improve its efficiency. The company can purchase the best available systems from the market and modify the same as per production requirements or can develop on its own a system that supports the current production procedures. The need to change is vital to meet the technological advancements in the companys area of operations. By implementing the changes, Ajax can considerably enhance its efficiency and productivity.
Overview of the Organization
Ajax must analyze the risks involved in both options and decide upon the best strategy in meeting its corporate objectives. The company will have to involve its risk management team in identifying all sources of risk in terms of their extent and their relationship with different production processes. The company needs to ascertain the impact on costs, schedules quality, and performance. Ajax is a well-established company in its field and has the required expertise and manpower to take the most appropriate decision in this regard.
Overview of Proposed Project
The basic purpose of the project is to find the best option to be used in the companys production planning and control systems in order to integrate them with the latest technological advances. This can be done only by analyzing all associated risks and then preparing a contingency plan in advance in order to save time when the problems surface. The company will benefit from such measures in establishing a competitive edge for itself in adopting the best technologies. The project is important since it is vital to take care of all possible risks so that production does not suffer or get delayed because of hurdles created from anticipated or unforeseen risks.
Project Risk Elements Identified
If the company chooses to purchase the most suitable commercial off-the-shelf system (COTS), there is a disadvantage in terms of the benefits being limited since most of such products are not flexible in being 100% compatible with the existing systems, although the development risks are low. The second option of developing systems that support the current production processes does offer better chances of compatibility and technical and well-designed objectives being met, but there are considerable risks pertaining to software development. Therefore, with the second option, there is a risk of delays in schedules being met and of higher budget overruns. The first option results in a large number of negative developments in addition to the inability of the software to be modified for given needs. It also cannot be integrated with the present management information systems and data. The second option has risks by way of unexpected hurdles that arise in putting together components of the new software and the excess time taken in the processing and recovery of information.
Outcomes
In choosing the first option of buying the commercial off-the-shelf system, the company will not face too many uncertainties due to the reduced development risks, but the benefits are too less in meeting the objectives of adopting the best technology to achieve a competitive edge. In using this option the company will incur lesser uncertainty and risks since costs, schedules, quality, and performances will not be impacted much. In choosing to develop a system on its own which supports the current production procedures, the company benefits in view of the enhanced possibilities for better performance. The company should rank the risks in terms of their severity and measure the disadvantages occurring from each of them and then make a measured decision in terms of costs and profitability.
Evaluation
The evaluation of the risk factors will have to be done by the company in terms of their extent and their relation to the different designs. The evaluation has to be done of the probable effect on costs schedules and performance levels. Ajax then needs to find alternatives that reduce the prevalence of risks. Contingency plans have also to be put in place to reduce costs and time taken for developing programs.
Conclusion
In keeping with the objective of the company to derive maximum benefit by reducing risks to the maximum, the better option is to use a system that it can develop on its own. This will enable Ajax to effectively support the different production and planning processes currently in force. This option will result in better efficiencies despite the higher risks. The company is competent to manage the risks effectively in view of its established practices of managing risks effectively.
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