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Airco Corporation UK Supply and Service Support Operations Analysis

by Suleman
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Airco Corporation has a 5.5 percent overall market position in the UK. Founded in 1987, it has gained a reputation over the years for delivering high-quality air compressor replacement parts and offering outstanding post-sale repair and maintenance facilities to all its customers. The main company is the procurement of replacement parts for both spare parts for industrial air compressors (IAC) and heavy duty air conditioning systems (HACU). The organisation also engages in the repair and servicing as a subsidiary service of the Commercial Air Compressors (IAC) and the High Duty Air Conditioning Unit (HACU). The business imports its products directly from air technologies manufacturing plants in Birmingham and Manchester. Airco can also buy the Commercial Air Compressors (IAC) and the Heavy Duty Air Conditioning Unit directly from Air Solutions since it gives bulk customers a discount and the imported components are authentic.

The company plans to supply replacement parts for Commercial Air Compressors (IAC) until 2014, while spare parts for Heavy Duty Air Conditioning Units (HACU) will be supplied by the company until 2017. This is since, during a duration not reaching fifteen years since the first year of the marketing of a machine or equipment, the corporation supports the delivery of replacement parts of a particular machine or equipment of a particular industry or because significant changes to an established machine or equipment have been produced and introduced into the market. The company’s goal is to ensure that all Commercial Air Compressors (IAC) and Heavy Duty Air Conditioning Unit spares are both available and usable. Moreover the organisation aims to provide all its consumers with swift support.

Airco Corporation UK Supply and Service Support Operations Analysis

There are three outlets for the firm. Birmingham is the largest outlet, although Leeds and Manchester are the other sites. At the above point of sale, with simplicity and low expense, the business will hit all its clients. At the end of 2017, a total of 180,000 Commercial Air Compressors (IAC) and 180,000 Heavy Duty Air Conditioning Systems were supplied by the Air Solutions Firm. This is because, every year, each of them sells 12,000 units. At the end of 2017, with both Commercial Air Compressors (IAC) and Heavy Duty Air Conditioning Systems, the business will have around 19,800 cumulative customers in the United Kingdom. A total of 1,497,600 replacement parts were also sold. 806,400 Automotive Air Compressor (IAC) Spares and 691,200 High Duty Air Conditioning Machine Pares (HACU). At the end of 2019, Airco Corporation will have controlled 7% of the Commercial Air Compressors (IAC) market share and 4% of the Heavy Duty Air Conditioning Unit (HACU) market share.

Airco would have to undertake a number of measures to ensure that it commands an average market share of 5.5% each year for the next fifteen years. First, the company would have to automate its warehouse. There have been cases frequent stock outs in the past. This is because the number of the spare parts of Industrial Air Compressors (IAC) and Heavy Duty Air Conditioning Units has been many for the small staff to handle.

Secondly, the company would need to equip its workshops and repair facilities.  There are cases when the workmanship of the company’s post sale service has been wanting. This will go along way in ensuring that the company continues to productively exploit and maintain 5.5% market share for the fifteen years until 2017. After sale service has always provided a competitive edge to the company over all its other competitors over the last years of operations.

Thirdly, the company would have to provide on the job trainings for all its technicians. This will be done in conjunction with the Air Solutions Company with an intention to make the technicians capable, highly skilled as well as responsive to the changing needs of all its customers. Training the company’s technicians in the manufactures facility would make the technicians ready to provide specialize service in response to all its customers’ needs and as a result, help redeem the company’s waning image on repair and maintenance service delivery. The staff will also undergo training on customer relationship management. Thus, the staff will respond to the needs of the customers by being more courteous and eager to answer the questions of the customers as well as provide additional assistance to the company’s clients. In addition, the employees will be able to attend to and advise the customers with increased speed. Consequently, the company’s customers will be more confident and satisfied for the services rendered to them. The training will further enable the employees to provide appropriate quick response to the enquiries of any particular customer.  In addition, they shall strive to maintain friendly environment and trained on better ways and standard procedures used to deal with complains of the customer. The company shall also strive to equip all its employees with modern repair and maintenance facilities and tools. This will ensure that the air compressors and conditioners would be working optimally. The company has 80 employees who are loyal and willing to provide after sale services that include monitoring, preventive and schedule maintenance as well as repair or replacement of worn out parts. Finally, the employee will be required to comply with delivery guidelines (Weele, A 2005).

Fourthly, the company would introduce a small charge for the post sale service. It is obvious that the company spending thousands of its pounds in providing after sale service. However, after sale service is critical to ensuring that the company maintains a good market share for all its spare parts. So it is necessary to continue providing for the service. The company has established overtime that 80% of all its clients do not mind paying a small fee for quality after sale service rendered to them. In the past, quality of the after sale service has been compromised because the company has been providing free after sale service and its technicians have not been effective because the company has been trying to save some pounds. However, with the introduction of a small fee for after sale and repair service, the company technicians would take enough time to skillfully complete the service rendered to the customers.

The fifth strategy of the company is to purchase spare parts as they are needed. The company has established through its monitoring endeavors that there are 15 parts each of Industrial Air Compressors (IAC) and Heavy Duty Air Conditioning Unit that wears and tear out regularly. Consequently, it shall seek to avail 80% of those spares all the time. It has been established over the past years that each product needs regular monthly and annual servicing and there is a high demand for routine service parts. However, due to storage space and limited working capital, the company would stock 20% of the number of spare parts that are not regularly needed at a time. This ensures that the company would be able to sell and deliver all its spares.  Through this approach, the company will be in a position to reduce overstocking. The company will also ensure that the genuine parts are only supplied to all its customers. The customers are looking forward to a good level of Industrial Air Compressors (IAC) and Heavy Duty Air Conditioning Unit spares parts support. There has to be a balance, therefore between the number of spares stocked for supply and the ware house. The company will also automate all its storage facility. This will enable the company to continuously track key information and processes involving the supply of Industrial Air Compressors (IAC) and Heavy Duty Air Conditioning Unit spare parts. Hence stock out and spare obsoleteness would be established and remedial measures instituted immediately (Ben-Daya et al 2009). 

The sixth strategy that will make the company desirable to its clients is setting up a new point of sale at Liverpool. This would ensure that the 15% customers residing in Liverpool that buy from the company will be served speedily and cost of transportation would be reduced drastically.  This will reduce inconveniences caused by long distances (Waters, D. 2006). The challenges brought about by long travels include high transportation costs, tome wastages and tiredness caused to the technician in charge. Therefore, it will save company’s time and reduce handling costs drastically.

The company would develop good processes and guidelines for all its process. This will be the seventh strategy of improving the company’s service delivery. The processes include sourcing orders in advance and scheduling them before the date or hour of rendering the service (Weele A. 2005). The company should also try as much as possible to eliminate unnecessary complications and time consuming brought by too much paper work and stringent bureaucracy that is evident in the company.  This will ensure proper coordination and focus during service delivery. As a result, the employees of the company would be used appropriately and there will be more productivity and efficiency in the provision of company’s services.

There will also be quality control unit within the company. As much as there is perceived quality in the products of Air Solutions. There are instances when the company has supplied defective parts to some of its clients. This has slightly eroded the image of the company and has cost company some few customers as well as money.  The company in most cases has always compensated the clients for the inconveniences caused. Compensation cost money and has always eaten into the company’s profits. To enhance service delivery, reduce unnecessary compensation and improve customer satisfaction rate quality control charter must be established in the company.

The company will continuously forge close working ties with the Air Solutions to facilitate continuous exchange and flow of information between the companies. This will ensure that valuable information on the product design and technology are updated in the company.  It will also inform Airco of the critical product changes such as possible technological change. As a result warn the company early enough of possible product and spare obsoleteness.

The company should use integrated planning techniques to forecast sales and purchases of the spares. The company need to use consumption based stocking. This reflects actual requirements and the times for delivering them will be shortened. Planners will be in a position to identify when the spares are needed and manage the stock levels effectively. This enables the company to increase the proportion of spares that are regularly needed. Automation of the warehouse will quicken the planning process and help to provide early warning signs of possible stock out of key spares. Thus, make the planning and distribution process very effective and efficient for the company.

References:
  • Ben-Daya, M; Duffua, S and Raouf, A. (2009)  Handbook of Maintenance Management and Engineering. USA: Springer.
  • Waters, D. (2006)  Operations strategy. USA: Cengage Learning.
  • Weele A. (2005) Purchasing & supply chain management: analysis, strategy, planning and practice. 4th Edition. USA: Cengage Learning.

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