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Dirt Bikes would like to implement new production planning, quality control, and scheduling software for use by 25 members of its manufacturing staff. Management needs to decide whether to purchase the software, hardware required to run the software and storage to maintain the data collected. They would also need to have staff to maintain both hardware and software. Alternatively they can use a hosted software solution from a software service provider and outsource all maintenance and data storage.

Dirt Bikes management has asked for a briefing on what is involved in making this decision. They need to understand several things:

1. What is needed to implement such a system as an infrastructure investment, and how do they determine the total cost of ownership if Dirt Bikes wants to do everything itself?
2. What are the advantages and disadvantages of owning versus outsourcing for each of these components (staff, computer servers, software licensing, and data storage)?
3. What are the trade-offs? For example: cost versus reliability; ease of use versus control.
Of the 4 key system components -- staff, servers, software and data storage -- are there other combinations of outsourcing (for instance, can they own the server but outsource data storage to a cloud company?)
4. What other future infrastructure needs might be relevant in this decision, for example will Dirt Bikes be needing other software applications and databases? Will they need internet servers to host the company’s web site and e-commerce services?
You may want to research some software as service companies (SAS) and some cloud storage services to understand how they work.

Implementation and Cost of infrastructure investment

In any business, the seamless flow of manufacturing unit can only be effective with the implementation of production planning and control systems. This helps in addressing to the problems regarding low productivity, inventory management and utilization of resources. This production planning is further followed by planning of workplace and scheduling of the operations (Baldea & Harjunkoski, 2014). This process is done during the transformation of the ideas into final products. Time-frame management of the required production is maintained by scheduling. The following report would include the production planning and control system for Dirt Bikes USA, as they are keen on implementing such software including 25 members of the manufacturing staff. The report would include cost of implementation, advantages and disadvantages of owning and outsourcing depending on the four components of manufacturing, the ease of use and control system and the future infrastructure needs.

Production planning depends on the factors of manufacturing system that includes scheduling of the period of production, dispatch of products, inspection and quality management, inventory and supply management, and inventory management. Implementing a production planning software would ensure the production team about the detailed information regarding a proposed manufactured product (Branke et al., 2016). This detailed information provides the production target information, quality management and cost savings of the production. Implementing a manual infrastructure into online services naturally raises the production cost; however, it cuts down the employee needs into supervising the proposed tasks. Therefore, the idea to implement the production planning and control would help in maintaining the production cost so that the project does not go over budget since less employees are required to supervise the production.

Dirt Bikes USA wants to implement the production planning into software, however, is indecisive about owning software or outsourcing it. There are several advantages and disadvantages of owning software and outsourcing it. This is based on the four components of manufacturing a product. These are as follows:

Workforce is the most essential factor of any organization. As per reports, Dirt Bikes USA has limited staff, but all of them provide supreme quality of productivity in the organization. In most cases, it could be found that outsourcing is perceived negatively since it means replacing of existing workforce (He, Zhang & Li, 2014). However, in Dirt Bikes USA, employees are eager to implement software being outsourced into the manufacturing unit. This is because the employees have an idea that owning the manufacturing unit by a manual process is less beneficial than outsourcing software for the ease of the production task.

The advantages and disadvantages of owning versus outsourcing

The most important aspect of software outsourcing or software owning is the server system of the organization. In case of Dirt Bikes USA, both the founders were riders as well as engineers by profession. Therefore, there is a high probability of the organization being technologically sound. The companies willing to offer their services online through software has a higher probability of implementing cloud computing as a server. The companies like Amazon and Salesforce.com conducts its entire services online with no physical existence of their production. However, it is an Infrastructure-as-a-Service or IaaS domain (Stadtler, 2015). With Dirt Bikes USA, the most convenient and profitable would be outsourcing the software with cloud as a server.

The biggest profit an organization can acquire is by in-house or ownership of software. Any developer in the home country would cost one-third than the outsourced developer (Pheng, 2018). Moreover, outsourced software cannot be customized as per the organization’s production. In this case, the Dirt Bikes would not suffice any outsourced software since its production includes time constrains and inventory system of engine parts that may or may not be available. If the entire software is customized, then it can be made according to the manufacturing needs for the Dirt Bikes.

In the same way the owned development of software allows a user to customize according to requirements, data storage system can also be customized according to the needs of the organization (Stadtler, 2015). According to the inventory system of Dirt Bikes USA, the national and international sales have been increased since 2010 and that too, drastically. The inventory needs to have huge data storage since Dirt Bikes USA manufactures every product by them.

Therefore, if developing an owned site is considered, then the organization should consider the cloud as the data storage system.

Production control focuses more on regulating the inventory management, organizing production schedule and optimal utilization of the resources as well as the production process. For a robust production control, the Dirt Bike USA production control software needs to ensure a smooth production process while maintaining quality. Since, the organization has 25 production staff, their work schedule and planning should also be maintained through the software.

If all these criteria were met, the software would be reliable enough to guide the user access through various databases containing the inventory and the work schedule structures (Stadtler, 2015). The software would be interactive enough and should be able to offer ease of access through various devices.

Staff

After studying through the Dirt Bikes USA organization structure, it is clear that to implement production supervision software, it will be better to implement ownership of the software but the server should be employed from the cloud to make the software reliable. The more server space is used up; the software would become slower to access the internet. Reliable software should have seamless connectivity to the internet (Stadtler, 2015). Therefore, the storage and server should be outsourced and the rest of the software structure should be developed locally within the organization.

With the ever-changing world in the cyberspace, it is necessary that software should be flexible enough to fulfil the needs of customer. Dirt Bikes should also be implementing ERP or Enterprise Resource Planning in the future so that the organization can add billing and accounting for the manufactured products as well (Krenczyk & Jagodzinski, 2015). For this reason, it would be necessary for internet servers to host Dirt Bike USA’s website and e-commerce services.

Conclusion

It can be concluded from the following discussion that Dirt Bikes USA indeed needs to implement software for the production planning, quality control and scheduling of tasks for the 25 manufacturing staff. However, after going through the entire case scenario, it could be stated that the software should be owned with local developers, and the server and data storage should be outsourced from the cloud. This would provide the software its reliability and agility. In future, however, the Dirt Bikes USA organization could think of implementing ERP system to provide flexibility of the software in maintaining the production and inventory balance.

References

Baldea, M., & Harjunkoski, I. (2014). Integrated production scheduling and process control: A systematic review. Computers & Chemical Engineering, 71, 377-390.

Branke, J., Nguyen, S., Pickardt, C. W., & Zhang, M. (2016). Automated design of production scheduling heuristics: A review. IEEE Transactions on Evolutionary Computation, 20(1), 110-124.

He, N., Zhang, D. Z., & Li, Q. (2014). Agent-based hierarchical production planning and scheduling in make-to-order manufacturing system. International Journal of Production Economics, 149, 117-130.

Krenczyk, D., & Jagodzinski, M. (2015). ERP, APS and simulation systems integration to support production planning and scheduling. In 10th International Conference on Soft Computing Models in Industrial and Environmental Applications (pp. 451-461). Springer, Cham.

Pheng, L. S. (2018). Project Time Management. In Project Management for the Built Environment (pp. 79-96). Springer, Singapore.

Stadtler, H. (2015). Production planning and scheduling. In Supply Chain Management and Advanced Planning (pp. 195-211). Springer, Berlin, Heidelberg.

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