Unicon Operation Strategy Essay

2194 Words Nov 7th, 2012 9 Pages
Executive Summary
The Government of the Peoples Republic of China (PRC) in 1997 introduced a housing project with the intention of creating an opportunity for affordable housing in Hong Kong (HK). Hong Kong was recognized as having one of the most important ports in the country with a growing middle class. The project would cover a 90 block radius by 1998.
Unicon, given an opportunity to complete this project for the PRC, faced a big challenge. The capacity of the project was 90 blocs. The company has only been able to complete a 7 block per year radius. The total capacity of the industry itself was 20 blocks per year.
Demand for 2 of its 4 products - precast concrete facades & slabs, which are in current production, is in high
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We are confident that we can deliver a strong operational strategy and partner with the People’s Republic of China and the Hong Kong Housing Authority to align our goals and objectives. ISSUE IDENTIFICATION

Short Term (Tactical Issues)

Capacity Shortage
The HKHA forecasted that 90 blocks would be tendered next year. This would require precast materials for construction. Unicon has currently the capacity to manufacture sets of facades and slabs for 7 blocks per year. Total current industry capacity was estimated at only 20 blocks per year. “The company operated a single shift that ran between 8:00am and 6:00pm with a 1-hour lunch break from noon until 1:00pm. The plant operated a regular production schedule from Monday to Saturday, plus overtime every other Sunday. Labour costs were 30% of the total revenue, while material costs were approximately 40%. The balance was for plant overhead and profit” (Source: Unicon Case Report, Pg. 7).
Pursuing a Blanket Approval with HKHA
There is an opportunity for a large reduction in costs and time by resubmitting approved technical submissions to HKHA. Unicon would have to invest some resources in establishing industry-wide standards and demonstrate the mutual advantages of the Blanket Approval. Unicon must consider the implications of this action, particularly in the long-term, as the marketplace adjusts to this new development.

Long Term (Systemic Issues)

Operational

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