Value Chain and IT Transformation at Desko Harvard Case Solution & Analysis

Value-chain analysis:

The value chain activities of the company is based on procurement, research & development, manufacturing, customer service, human resources, logistics and distribution, sales & marketing and finally information technology. These activities can be best defined through value chain analysis that is based on primary and support activities.

Primary activities:

Manufacturing:

The manufacturing department of the company comprised of two basic segments that are MTS and MTO. MTS are stocked well and stocked in advance and used for later purpose. On the other hand, MTO are made according to the order and thus manufactured only when the order has been placed by the customers. The lead time for MTS and MTO is two weeks and six weeks respectively. Recently, the manufacturing department of the company is sufferings in terms of inefficiencies in its process. The company has implemented and invested in new technologies but still the output from the investment is not up to the mark.

Distribution and logistics:

Logistics and distribution at Desko is done through trucks and shipping. Once an order is complete, the ERP system assigned it to produced status and the company distributes the product all over Canada and the United States. However, two major deficiencies have been identified in the distribution. First, there is a large volume of items in inventory in the distribution center, in the warehouse and even in trailers as well. This excess inventory makes inventory management complicated. In addition to this, in numerous storage sites there isa difficulty to locate items and numerous useless manipulations makes the collection method long and laborious.

Marketing & sales:

The company is strong in its marketing and sales department because of having strong grip on the distribution network of the company along with having specialized distributors all over.

Customer service:

The customer service department at Desko plays a major role, and its primary activities include receiving and then processing of orders from the customers. The customer service department of the company is efficient and effective but still, the management has encountered with several scenarios of lost orders. Because of loss orders, the company often has to bear loss both in terms of financial and reputation as well. In addition to this, the stocks of the company have been apportioned physically that often creates issues in the overall system.

Support activities:

Procurement:

Procurement can be defined as acquiring various products and services through external sources. As far as the procurement of Desko is concerned, the company can bring a lot of improvement in it. Areas for improvement includes removing tasks that are not adding value in the process, lacking in terms of performance indicators and inequality in terms of accountability sharing in the departments. Furthermore, the company is using an obsolete, slow and outdated fax system to process approximately 25% of its orders.

R & D:

The main strength of the company is found to be in its unique and specialized product designs that can only be made possible through having proper research and development for the company. However, the innovation came to an end with a choice made by the company to transpose the staff and discontinue financing in product development.

Human Resources:

The human resource department of the company is lacking in terms of having proper performance indicators to gauge the performance of the employees. The information system of the company is outdated as well, and that makes the process less efficient and effective.

Information Technology:

The information technology department of the company is based on various divisions that are web development, network management, and ERP development. The existing enterprise resource planning system of the company is found to be extremely miserable and obsolete, thus provides less output and efficiency. The performance of other divisions of the company is not up to the mark as well.

Finance:

The financial activities of Desko are based on the departments that are primarily dealing with all the accounting, credit and invoicing activities and this department is found to be in better condition than other departments of the company.

Suggested informational technology structural design:

The existing informational technology structural design of the company is full of flaws and blunders. These errors cannot be eliminated by making minor changes as there is a huge requirement for the complete transformation. For the IT system to be favorable and profitable for the company, it is important to change it entirely, and this can be done through making changes in hardware and software of the company as well.

In terms of hardware, the IT department of the company lacks in terms of required hardware and tools needed to make order process more efficient. As of now, the company needs to have a proper set of tools and materials for better integration.................................

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