Case Analysis: PassAct Inc. Harvard Case Solution & Analysis

Case Analysis: PassAct Inc. Case Solution\

Issues The Company is facing

There are several questions which the company was facing and due to this, the company’s profitability and revenue have maximized. In addition to this, the company was lacking in making proper integration among its suppliers and customers. Moreover, the company was facing numerous issues in making prototypes and its components; one of the main issues was that the company did not have a large order for its prototype and its parts as the manufacturers of these were the company’s vendors and they only worked on large orders. However, even the smallest order fulfillment company was taking those orders, which were far too huge for Pass Act.

Nonetheless, if the company places such a big order, then the company will not be able to cover the cost or volume of the decree. However, another problem regarding this order fulfillment was that the company’s developers and scientists had to go to the manufacturing department to identify the required components and parts necessary for the production. As a result, this took a lot of time and increased the idle time for production, which ultimately increased the fixed cost of the company and burdened its cost structure for unnecessary expenses.

Furthermore, the company’s process for order fulfillment was also time-consuming, which confused the purchasing and logistics department to inter grate among order placement and fulfillment as the company usually received the order then placed it to the supplier and then the supplier fulfilled by providing to the customers directly.
Moreover, the company’s business model was designed to integrate fully with its down and upstream allies, however the model was not working as per expectations. Nevertheless, the revenue which the company was earning only had two resources, which were that either the customer would place the order directly to the enterprise via the public website (it was also noted that these orders were contributing less than 1% in company’s overall revenue) or the customer had to choose the required product from the company’s online catalog. The company only charged a spread of almost 5% to 15% from its suppliers working as an intermediary.

Lastly, it could be said that all the above stated threats are affecting the overall business model and profit formula of the company. However, the steps which were taken by the enterprise to solve them will be discussed in the next section.

Solutions for the Problems

The company took numerous actions to resolve these issues, which were creating hurdles in implementing the strategy to maximize the revenue and to stay cost efficient. These steps include the formation of a new company as Rawlins and Blevins liquidated the old company to form Pass Act however, this idea seemed suspicious, but they took some great initiatives which made an established company to a blue chip enterprise.
In order to achieve proper integration among the supplier and customers while working as an intermediary, the company made an online catalog and e-commerce platform for its clients to place and receive orders from. This platform allowed the customers, developers, and scientists to choose from a wide range of products and prototype components and to place the order to Pass Act. The company received orders from the portal and put it on its suppliers. This online platform reduced the lead time for customers and allowed the company to reimburse more orders, which ultimately increased Pass Acts’s Sales volume.

Moreover, the company stopped maintaining any warehouses, sales centers and manufacturing facilities, which reduced its fixed and variable cost and ultimately it reduced the cost burden. This was a result of developing the e-commerce platform and technological changes. Furthermore, the company also made commitments with large suppliers. Since the company wanted to make its website a one stop shop and without the help of large contractors, therefore this was almost impossible............

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