Implementation of the New Business Model for GAAM Company

This case study discusses the implementation of a new business model for GAAM Company, a manufacturer of building systems and hydraulic systems. It explores the purpose, participants, inputs, outputs, process flow, exceptions, strengths, inefficiencies, use of information technology, and proposed workflow diagram.

Running head: IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
Implementation of the New Business Model for GAAM Company
Name of the student
Name of the University
Author’s note

1IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
Table of Contents
1. Introduction..................................................................................................................................2
2. Purpose........................................................................................................................................2
3. Identification of Participants, Inputs and Outputs.......................................................................3
a. Participants...............................................................................................................................3
b. Inputs.......................................................................................................................................3
c. Outputs.....................................................................................................................................3
4. Process Flow or Activity Descriptions........................................................................................4
5. Exceptions....................................................................................................................................5
6. Business Process Model..............................................................................................................6
7. Process strengths..........................................................................................................................6
8. Process inefficiencies...................................................................................................................7
9. Use of Information Technology...................................................................................................8
10. Business Process Re-engineering..............................................................................................8
11. Proposed Workflow Diagram....................................................................................................9
References......................................................................................................................................10

2IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
1. Introduction
The case study is based on the discussion about the GAAM International Company,
which is primarily responsible for manufacturing different building systems, hydraulic systems
and metal products. The various products offered by the company is mainly sold in the domestic
and foreign market to different equipment manufacturers. The headquarters of the company is
situated in South Australia. The company mainly employs around 3800 employees from all over
the world. The company mainly operates in seven countries from all over the world.
In the recent times, the company is facing a major problem based on keeping a track over
their inventories based on the MRO requisitions of the new items. The company also purchases
different outdated and old replacement parts. Based on the discussed problems, the company is
planning for a process of revamping their engineering systems (Howard et al., 2015). Hence,
they are planning to implement an Information System with the objective of improving the
global position in the highly competitive market. A thorough investigation would also be needed
to be made for improving their business processes.
2. Purpose
The purpose in this report primarily focuses over choosing the various aspects and
discussing them in brief. The participants, inputs and outputs would be chosen in order to discuss
about the specific strategies that could be implemented within the company. Within the analysis
procedure, the identification of technologies that would help in the improvement of business
processes would be discussed (Demirezen & Kumar, 2016). The purpose of this report would
also help in discussing about the strengths and inefficiencies of the processes. Based on the
discussion

3IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
3. Identification of Participants, Inputs and Outputs
a. Participants
The participants included within the GAAM International Company include 3800
employees who operate from all parts of the world. The company includes the Purchasing
Department, which comprise of two buyers, secretary or clerk and a purchasing manager (Eom,
Kim & Jang, 2015). MRO suppliers can also be considered as an important participant who
receive requests from 36 individuals for the company.
b. Inputs
The purchasing department within the organisation is mainly responsible for procuring
hydraulic pump inventory. The maintenance, repair and operating (MRO) supplies are also
procured within the department. This would also include any form of equipment that would need
tooling and other supplementary materials such as sand. It would also include various other
ingredients such as pouring castings (Tjahjono et al., 2017). Other non-production related
services and products would also be procured within the company. The company also procures
on an average of AU $15 million of inventory items that would approximately be up to 3000
parts in a single year. In addition to this, an AU $6 million in purchases can also be made by the
MRO in a single year.
c. Outputs
Based on the gained inputs made within the organisation, it can be confirmed that based
on the procurement of items within the organisation, the company also produces a vast list of
items. The company specializes in manufacturing different building systems, hydraulic systems
and other metal products. In specific portions, the company manufactures different forms of
hydraulic equipment that includes motors and gear pumps, control valves and telescopic

4IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
cylinders (Lyovina & Dubgorn, 2014). The products offered by the company is mainly used in
different heavy-duty vehicles such as cranes. The products are also sold to various foreign and
domestic (US) original manufacturers or equipment.
4. Process Flow or Activity Descriptions
There are various people who are involved within the departments of GAAM. The
complete list of steps that are completed by the people who are assigned with certain roles
involved within the project are:
1. The purchasing department primarily receives request for the MRO suppliers based
from different individuals who are within the company. These requests could be either in the
form of an MRO card or other purchase requisition.
2. After the requisition request or card would reach the purchasing department, it would
be reviewed and thus signed by the MRO buyer. If a certain item is requested with the help of a
card, it would be returned to the purchasing department that would request the purchase (Bajdor
& Grabara, 2014). On the other hand, if the request is done by using a purchase requisition, the
request form would be filed within the purchasing department.
3. After the request is being processed, the distribution of the orders is made from the
inventory.
4. In other instances it could happen that the MRO buyer might make a purchase. In case
of emergency situations, an item, which would be immediately needed, a certain purchase
number would be generated (van der Aa, Leopold & Reijers, 2016). This number would be
different from the sequentially based numbers that are mostly used by the normal P/Os.

5IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
5. The purchasing department would also get requests based on MRO requisitions on a
daily basis based on the procurement of new items (Piera et al., 2014). There are also several
instances in which old and outdated replacement parts are also purchased.
5. Exceptions
The discussion in the previous section focuses over the different processes that are
followed by respective individuals involved within the company. However, there might be
certain variations or exceptions that are considered within the processes of the company. Some
of those exceptions or variations could be listed as:
1. The company could implement an Information System (IS) within their operational
processes. This IS would be able to maintain a track over the items stored in the inventory
(Brack, 2014). In case of situations in which the items might not be present in the inventory, the
IS would help in notifying the purchase department about the ‘Out of Stock’ status of that
particular item.
2. The cards that are used within the company meant for the purpose of purchase should
consist of an RFID tag based system (Adoga & Valverde, 2014). These are considered as a form
of tracking system that makes use of smart barcodes for the purpose of identification of certain
items and also maintain the usability of the card. These cards would be linked with the IS and
thus the purchasing department would be able to measure the number of times the card has been
used by an individual user.

6IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
6. Business Process Model
Figure 1: AS-IS Business Process Model
(Source: Created by Author)
7. Process strengths
The strengths of the current business processes are:
1. The company majorly procures each of the equipment based on manufacturing of
building systems, hydraulic systems and metal products.
2. Based on the discussed business process, the company sells their various products in
the domestic and international markets (Eriksson, 2015).
3. The procurement of various items that are required during the manufacturing processes
can be procured with various methods such as the use of a card system that are available in

7IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
various departments (Mosgaard, 2015). An approximate number of 8000 cards are maintained
within various departments of the company. The use of this card is mainly used for requesting an
item for the purpose of purchasing.
4. The company has a huge number of employees who are located in different parts of the
world. They mainly operate in seven countries from the world. Thus the company also facilitates
their business processes in the highly competitive market.
5. Along with the MRO buyer, individual buyers are also eligible for purchasing different
new items. The company provides a certain limit to each individual based on which they would
be able to make a certain purchase (Tran et al., 2014). The limits endorsed by the company to the
individuals generally range from AU $ to AU $1000.
8. Process inefficiencies
Some of the problems or inefficiencies that can be found within the current business
processes are:
1. The purchasing department does not employ the usage of an IS, which can be
considered as a disadvantage for the concerned department (Liu, Wang & Wilkinson, 2016).
They do not have a track over the items in the inventory. Thus they would have to manually
check over each of the items.
2. The purchasing department still employs manual work that comprise of buyers,
purchasing manager and a secretary or clerk. This increase the time of work procedures.
However, an IS would help in improving the business processes of the system.

8IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
9. Use of Information Technology
In the current process of the business, each of the business processes are handled with the
help of a manual system. The buyer would send a request for purchase based on an MRO card.
After the approval of a request, the inventory would be manually searched. The limit of the card
would also be checked in order to approve purchase request by the customer.
With the implementation of the use of the Information Technology System, it would be
easy to track each of the processes involved within the company (Kollmann, 2014). This IT
system would also track each of the business processes. The list of items within the inventory
would also be easily detected with the help of the system.
10. Business Process Re-engineering
With the implementation of the proposed IT system within the business processes, each
of the processes within the organisation would be reengineered. In the present systems, each of
the purchases that are made by the MRO buyers would be reported to the purchasing department.
The card based system is used for purchasing regular items while the requisitions for purchase
are mainly used for new items (Laudon & Traver, 2016). The limit of each of the purchases
would mostly range from AU $500 to AU $1000. However, in the present times, there are certain
problems faced with the tracking of items in the inventories. The company also employs the use
of manual labour in order to process the various transactions.
In situation of such kind of problems, it could be recommended that a usage of an
Information System would be able to mitigate the chances of errors that are made within the
GAAM Company (Zunk et al., 2014). In the first case, the use of IT technology would be able to
reduce the manual labour of several workers. In case of such situations, the manual work would

9IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
be done with the help of the Information System. With the help of the Information System, the
company would be able to generate the entire operations on an automated basis. Upon a certain
purchase from the individuals, the IT system would generate a certain code that would help the
purchasing department to track each of the individuals (Colin, Galindo & Hernández, 2015). The
customer would be assigned with a purchasing number. The cards would be built on RFID
system and thus each of the purchases that would be made will be tracked by the department.
Based on the knowledge, the company would be able to make new requisitions for each item
within the inventory. This would result in getting a major amount of insights about the use of
such items that could be used within the system. The company would also be able to get to know
about the amount of progress of their business.
11. Proposed Workflow Diagram
Figure 2: TO-BE Business Process Model
(Source: Created by Author)

10IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
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12IMPLEMENTATION OF THE NEW BUSINESS MODEL FOR GAAM COMPANY
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