Problem Facing Byte Products Inc.

Byte Products, Incorporated:

Problems, Recommendations, & Commitment

Mary R. Johnson

American InterContinental University-Dunwoody Campus

PROBLEM FACING BYTE PRODUCTS INC.

In my opinion, and as stated in Section A on page 1-3 of the textbook, the problem facing Byte Products, Inc. is that they cannot adequately meet the demand of its customers (Wheelen & Hunger, 2006) while trying to remain the leading company in the production of electronic components for computers. Byte Products, Inc. operates plants widely across the United States 24/7. As stated in the text, "...this activity constitutes virtually all of the company's production capacity" (Wheelen & Hunger, 2006). Byte Products are unable to meet the demand of its growing market, despite the fact that their plants are running at full or near full capacity. James M. Elliott, Chief Executive Officer and Chairman of the Board, recognizes this problem and understands they cannot operate in this manner.

Because the plants are already operating at full capacity, the problem begins with the amount of space that is available in the plants and the utilities for which the work is being completed. Without an additional manufacturing plant, Byte simply cannot increase its output of components. A short range solution is required so that Byte can stay in business successfully. Byte Products, Inc must face this problem and determine a solution immediately. Ultimately, without an immediate solution, the company could lose market share, customers, and attract competitors into the market.

RECOMMENDATIONS

According to the textbook, Byte Products, Inc. could use another plant that is currently not in use. The plant is located in Plainville, which is a small town in the northeastern United States. In fact, the plant is abandoned. Even if the plant is not already fixed to make the products Byte manufactures, it could be renovated and "...inexpensively refitted to do so in as few as three months" (Wheelen & Hunger, 2006). More importantly, if Byte Products, Inc. could purchase the plant at a reasonable price, that would make it a great strategic move.

Being able to purchase an abandoned plant will allow Byte to better lay the foundation for capacity planning and allow them to take the direct steps to meet the urgent demand of its customers. Some might look at the situation an think that Byte should either outsource the necessary work needed to catch up with the demand. Although this may be a good quick fix, it is not a good idea if Byte is looking to make profit in the long run. If Byte chooses to outsource certain activities, the company will start to have less control on the delivery and quality of their specialized computer components. Although the demand might be met, the quality of the products might lack, therefore, Byte Products, Inc. would be in no better of a situation (BizBrim, n.d.).

A second recommendation would be just building another plant. This would take a couple of years and is not ideal for a short term fix. However, in the long run, it will add quality and could create more assets for the company. For example, the newly built building could become the focal point for manufacturing for Byte. One problem that might arise with building a new plant would be the costs incurred. These costs could be controlled by asking for financial help (seeing as how what Byte manufactures benefits the government) and by having some type of quality management strategy set in place.

My third recommendation would involve a merger. Byte Products, Inc. could consider merging with one of its competitors. By merging, the two companies would agree to work together to achieve a mutually beneficial commercial goal--to dominate the market. This would assist in gains in revenue or cost savings stemming from a capable match between the two companies. Since Byte Products Inc. is the leading company, the merger would