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Covidien is an international leading company in healthcare products devoted to providing greater patient outcomes through their innovative medical solutions. With $10 billion in annual revenues and 38,000 employees worldwide, Covidien strives to maintain a strong presence in its markets, and is committed to long-term strategic growth through its clinical excellence and leadership. Covidien’s organizational structure has many business units; one of which is Precision Instruments (PI) focus factory. PI has numerous production lines that operate mainly from a paper-based procedure; this process has been proven successful, but human error has slowed growth rate and production within the production line department. PI proposes that a new system be implemented into the current process to improve production and significantly reduce errors on the production line. The organization has considered implementing a Customer Relationship Management (CRM).This owes to the fact that the software is effective in establishing a harmonious relationship between the customer and the sales person. The customer is rewarded where necessary hence, it is a tool of motivation in the company The new system will be technical in nature, by providing wireless scanning and labeling devices that will take the place of the paper-based procedure (Harper et al 668).
DESCRIPTION OF PRODUCTS AND SERVICES Precision Instruments (PI) is considering creating new system called ACT Software application from Sage Software, Inc. Management. This system is a software solution designed to interface with Covidien’s BPCS ERP inventory management system. The ACT system is comprised of dcLink interface software and mobile scanning and barcode label printing hardware. ACT provides workforce mobility by enabling real-time, point-of-use transaction execution versus batching transactions for entry at a terminal after the fact. Currently, the production line department has a paper-based procedure. The paper-based nature of the system is problematic. The process is labor intensive, inefficient, and requires several levels of people manually comparing component labels and associated paperwork for accuracy. The current system is controlled through standard operating procedures and practices. Each person is assigned and responsible for completing annual documentation training according to his or her role and function within the process (Harper et al 661). By integrating this new system into the existing system, the company can improve the quality, inventory accuracy, efficiency, and process control issues with the current system.
PI currently uses a database called BPCS to store, update, and organize inventory data. Currently the electronic portion of the system involves personnel utilize desktop computers to perform BPCS transactions. The computers are internet connected, and utilize the business network to communicate with BPCS. The current system also utilizes an up-to-date 10 Gbps Ethernet technology. This network is fully capable of handling the new proposed upgrades to the system. The technology can be easily applied to current problems by utilizing wireless handheld devices for scanning barcodes and using the existing network to retrieve, transfer, and adjust inventory from the handheld devices. The IT department is currently fully staffed and capable of handling the new system. Additionally, the DC Link system software developers in the use and management of the new system will train the Covidien’s technicians (Harper et al 661). The production line operators will also be fully trained in the use of the mobile devices. To maximize the PI department effectiveness, some technical upgrades will need to be implemented. These upgrades will be as follows: • New dedicated server for the PI department • Dedicated power and Ethernet services will need to be installed • 50 Intermec CK3 devices used for scanning and linking with the BPCS database • 50 PB50 devices used for generating barcode labels • 10 additional wireless stations will be placed within the warehouse The new server will have an additional 90% free space to handle any unforeseen data. On the other hand, there will be an overall cost increase of 5-10% for web server operations and maintenance costs.
ECONOMICS The online commercial center for chocolates and sugary treats has been flourishing for a long time. In FY20xx online chocolate deals represented around $20 million or 20% of aggregate chocolate deals around the world. While chocolates and sugary treats are accessible in verging on each store, its essential commercial center comprises of claim to fame chocolates and sweets. The greater part of Covidien’s present real rivals as of now have a built up online vicinity of no less than 3-5 years. The main 3 contenders are at present: Smith’s Chocolates, Worldwide Candy, and Chocolate International. A huge dominant part of Covidien’s client base are returning clients and referrals from existing clients. By giving a more advantageous method for buying its items on the web, it is normal that we will hold these clients while directing a web advertising effort for new clients too.
Covidien will appropriate online buys by means of direct transporting from the closest store area. This will permit Covidien to give auspicious sending and take out the requirement for a focal stockroom or office from which to store and deliver its items. Such an office would require a noteworthy capital speculation and additionally expanded operation and upkeep costs. In any case, in light of expected development projections, Covidien must guarantee that all store areas keep up satisfactory inventories close by to fulfill client request. OPERATIONAL FEASIBILITY The Covidien online sales campaign is not anticipated to significantly affect the organizational structure of the company. There are, however, several staffing additions required to successfully implement the online sales campaign. All of these positions will work within existing departments and report to department managers. Staffing Position #1: Online Sales Manager – this full time position will lead sales staff in identifying sales opportunities and converting these opportunities to actual sales. This person will report to Covidien’s Director of Sales and will work in Covidien headquarters. Staffing Position #2: Online Marketing Manager – this full time position will lead marketing staff in identifying target customer groups/markets and conducting online advertising/marketing efforts to maximize traffic to Covidien online marketplace. This person will report to Covidien’s Director of Marketing and will work in Covidien headquarters.
PROJECT SCHEDULE STUDENT’S NAME: OLMAN MENTOR
PROFESSOR’S NAME: JEFFREY PULLEN
COURSE: BUSS 419
DATE: 02/ 06/ 2016
SCHEDULE The ACT system is expected to take three months from project approval to launch of the new system platform. Systems such as BPCS database and the network infrastructure are already in place (Mattke et al 23). The following is a high-level schedule of some significant milestones for this initiative:
September 15, 2016: Initiate Project October 17, 2016: Infrastructure, hardware, and software procurement October 31, 2016: Development phase November 14, 2016: Implementation/testing phase November 25, 2016: Migration phase December 5, 2016: Validation phase December 6, 2016: System release Upon approval of this project, the assigned project team to include all tasks and deliverables will create a detailed schedule.
FINANCIAL PROJECTIONS The financial forecasts for the addition of an online sales platform for Covidien are underscored in the table below. The figures justify for projected online sales, additional staffing requirements, shipping, material, and insurance costs, contract support for IT and training needs, and web server and compering costs. The assumptions for these projections are as follows: • In store sales projections remain unchanged • All milestones are performed in accordance with the schedule • All transactions are closed yearly with no carry-over to subsequent years
FINDINGS AND RECOMMENDATIONS Based on the info presented in this feasibility study, it is recommended that Covidien approves the online sales initiative and begins project initiation (Mattke et al 4). The results of this feasibility study show that this initiative will be highly helpful to the organization and has a high likelihood of success. Key findings are as follows: Technology: • Will utilize current technology which lowers project risk • Ecommerce infrastructure will be contracted out to vendor which allows Covidien to share risk • Once in place this technology is simple to operate and maintain for a relatively low cost
Marketing: • This initiative will allow Covidien to reach large number of target groups electronically at a low cost • Covidien can enlarge customer base outside geographic areas where stores are currently located • The marketplace for online chocolate and confection sales is in a steady state of growth • Covidien is able to distinguish itself from its competitors and will utilize incentive programs to target new consumers
Organizational: • Minimal increases to staffing are prerequisite with no changes to organizational structure • No new facilities or capital investments are required
Financial: • Break even point happens early in the second year of set-up • Five year projections show online sales accounting for 25% of total sales • Covidien will be in position to capture greater market share by maintaining both an in-store and online presence
Harper, Paul Robert, and M. A. Pitt. “On the challenges of healthcare modelling and a proposed project life cycle for successful implementation.” Journal of the Operational Research Society (2004): 657-661. Mattke, Soeren, Arnold M. Epstein, and Sheila Leatherman. “The OECD health care quality indicators project: history and background.” International Journal for Quality in Health Care 18.suppl 1 (2006): 1-4.