Case Study #2 - Thompson Packaging - RBS Assignment (30%) - July 10 by 11:59 PM via Dropbox - iLearn

Background

Thompson Packaging is a family-run business based in Rhode Island. Thompson Packaging specializes in the production of customized packaging materials for manufacturers, in particular the jewelry industry. In addition to standard packaging materials such as boxes and tubes, Thompson Packaging produces unusual display packaging materials. Thompson Packaging originated in response to a niche market for the jewelry manufacturing sector that was once a very vital part of the Rhode Island economy.

With the shrinking of the jewelry manufacturing sector in Rhode Island, Thompson Packaging made a concerted effort to expand their market to other manufacturing sectors, first in Rhode Island, and then in the broader southern New England region. The early efforts included increased advertising, a presence at more trade shows, and an increase in the sales force, with an emphasis on cold calls to potential customers. This strategy worked in the '80s and into the mid-90s. Growth stagnated after the mid-90s.

In 2009, the next generation of Thompsons joined the company with the addition of Julia Thompson as the vice president of Thompson Packaging. Julia Thompson, a graduate of the business school at the University of Rhode Island, is full of ideas for bringing Thompson Packaging into the 21^st century and expanding the customer base to the national arena. She and her father, George Thompson, president of Thompson Packaging, have different ideas about the paths to follow to ensure the fiscal health of the company. Although both agree that the customer base needs expansion, they disagree on how large this expansion should be. Julia also wants to put an information system in place that can provide a seamless, efficient, and user-friendly environment for their business, with a Web-based component for customers to place and track orders. Up until now, the sales and office staff has been using a series of spreadsheets with macros for taking orders, generating order details for production, and generating billing. Recently the financial department has moved to a software package that handles accounts receivable and accounts payable, and has expansion capabilities. George understands and can work with spreadsheets, but anything beyond that demonstrated to him has received a negative response, because of his limited comfort level with technology. He also is concerned about the impact that an information system could have on his workforce, some of whom have been at the company longer than he has, and most of whom have limited knowledge of computers. The actual production of the product has been computerized, and George is hesitant to go much further with IT. He is in favor of adding additional salespeople, and expanding the market along the eastern seaboard.

Julia wants to see Thompson Packaging moving toward an online presence and a national market. She is interested in exploring the possibility of reducing the traditional sales force and introducing a Web presence that provides information about products and allows potential customers to use online applets to try out virtual designs.

John McClean, the director of sales, is concerned about the direction that Julia is interested in exploring. He has been with the company since day one, and supports George Thompson's ideas for increasing sales by expanding the sales force and the geographical target area. He does acknowledge that there is support from sales people for the introduction of an information system, and that his hesitancy is influenced largely by his discomfort with technology. He also acknowledges that customers have expressed frustration with the time needed to get information for them, because quotes often can require turnaround time of a day or more.

Anna McNally, the director of finance, would like to see a more integrated solution for following orders from quotes through delivery and billing. She points out that with the multiple solutions currently being used for the various components of orders, errors can be introduced at several points of the process, whenever information moves from one solution to another.

Dennis Martin, the director of operations, is happy with the actual computerized production process, even though it was implemented several years ago and has not been updated. He is concerned with the fact that the link between the spreadsheets used to gather the order data and the system that controls the actual production of the packaging allows errors to be introduced, because the link is not automated. The result of this has been some production runs that have been incorrect due to human error. Dennis does not want to see a change in the production process itself, but if the software they are using to control the machinery can be updated to allow for automatic linking between sales and production, he would be supportive.

George and Julia have decided to bring in a systems analyst to evaluate their business situation and whether or not implementing an IT solution for some or all of their business needs make sense. George has decided that he will have Julia be the main contact person for this, because he does not have the background he feels is necessary to make informed decisions in a timely fashion. They hired Robert Hanover, a systems analyst who does a lot of work for small scale manufacturers.

Julia, George, John, Anna, Dennis, and Robert sit down to discuss the business, and most notably the areas that Julia feels could benefit most from an IT system.

Julia: Robert, I think that the most important issue for our company is coming up with a solution for the fragmented nature of the process that follows orders through from placement to completion. We currently have different solutions in place for estimating orders, taking orders, producing the packaging, tracking the packaging through the production and delivery process, and billing the customer. Each one of these sub-processes is separate and distinct, and much of the information that follows an order from start to finish has to be entered multiple times along the way. We have to come up with a solution that is more efficient for both the company and the customer.

John: Well, you know that I am not technology-savvy, but I am hearing from my sales force that we need to be doing something. Sales reps are frustrated that customers can't easily check on orders, or get estimates, without working with the sales rep or someone at the home office. They are being told that many other companies provide them with the capability to get estimates and check on orders themselves through some computer-based system. Customers seem to be much more self-sufficient, and in more of a hurry now than they used to be. Our rep-dependent system is putting us at a disadvantage.

Anna: I'm quite happy with my new software that is handling accounts receivable and accounts payable. My concern right now is that billing still is being generated outside of this software, and moving bill info over to accounts receivable requires several steps to prepare and export the information. Each step has the potential to introduce error because it is dependent on human intervention. Why can't we move this information over using an automated process that removes the human element, and therefore the errors?

Dennis: I'm in the same boat as Anna. I'm quite happy with my production system, and I don't want to see that changed. My concern is the link between production and sales, because of the potential for error to be introduced. I know that the vendor who sold us the production system has called a couple of times about upgrades, but we have never pursued this. Perhaps this might be the time to find out more, within the context of a new IS?

George: You all know where I stand on this. We built this company with good people, and I do not want to replace people with computers. Is that what would happen if we brought in one of these information systems? I want this company to continue to take care of its employees, even if that means that we grow a little less. I don't want to see jobs on the chopping block.

After the meeting, Julia asked Robert to put together in writing his impressions from the meeting. She is interested in formalizing the goals of the company, planning out how to meet these goals, and addressing some of the reservations that George and John have about introducing an IS at Thompson Packaging. Robert put together a memo for Julia detailing the need for strategic planning and describing the stages of preliminary systems investigations.

Assignment:Create a risk breakdown structure (RBS) chart for the above scenario. Reference the slides in Week 2, to remember what is in an RBS. Use the following headings for your chart: Organizational; Technological; Security; Investment; Leadership; Communications; Plans; Resources. (10 Marks)

Determine the risks (if any) in each of the categories based on the scenario and conversations in this case study. (20 Marks)

Risk Breakdown Structure: Thompson Packaging

RBS Level 1	Risk ID	RBS Level 2	RBS Level 3
Risk Category	Specific Risk	Description of Risk
1. Organizational
2. Technological
3. Security
4. Investment
5. Leadership
6. Communications
7. Plans
8. Resources