Fedex Capital Project
Every company needs to make continuous improvement so as to increase their competitive advantage. This can be achieved by the inclusion of capital project in the company’s operations. Examples of these projects are purchase of a new equipment to replace an existing one or upgrading existing equipment and also developing a product line. FedEx is a United States based company which offers courier services (FedEx, 2011).
One of the most important tasks in a courier services company is software for courier business and GPS equipment. The courier business software enables the company to get places in a quicker and efficient way. Customer satisfaction is very essential in business and the improvement of this software and equipment will make the customers satisfied.
Discussion
The potential capital project for this company is improving on the courier business software. An example of this would be the POD entry. The POD entry screen allows the company to have delivery proof. This entry validates all the entries that are made. It also gives the operator the chance to see and analyze the history of POD for any shipment that they select.
Therefore, it makes monitoring easier. To improve on this software requires inputting a lot of resources. For efficient running of a company, every decision that is made has to be supported by the top management and should involve all people in the company (Drucker, 2007).Therefore, implementation of this improvement process will be faced by challenges. These include the politics that would be involved in passing through the idea and the planning that is required so as to include the idea in the company budget.
Since for the plan to go through, different committees have to discuss it, this will most probably lead to objection from some people. People have different opinions on various issues and this will be expected of the committee members. Therefore, one of the major problems will be the politics that will be involved. There are those people who will consider it as too involving and thus meaning a lot of digging into the company’s resources. This is a long term plan and thus it is most probable that its benefits will be observed after some time.
However, the committees may expect a plan that brings instant benefits. They may thus not see this as a worthy cause of investing the money of the company.Every plan has to be budgeted for in the company’s financial budget. The budget is done for one financial year. Therefore, for this improved courier services software plan to be implemented, it has to be included in the company’s financial budget. This then means that the plan will be faced by the challenge of having to wait for a long period so as to be allocated funds. The budget needs to be discussed with other company members failure to which the corporate goals of the company will not be achieved (Shim & Siegel, 2008).
The budget should also be a well formulated. In the course of the year, other projects may come up and this means that the company will have to relate them based on their urgency. Therefore, this project faces the problem of not being allocated for enough funds.Offering customer satisfactory services means having more customers and thus increasing the company’s cash flows. Therefore, if implemented, this capital project will ensure efficient services. With the expected increase in customers and customers returning for the company’s services, the cash flows will be expected to increase by at least 7% annually.
Conclusion
Companies need to make continual improvement so as to increase their market productivity. This is achieved by incorporating capital projects in the operations of the company. With support from the company managers, other employees and resources, the company will improve its services.
References
Drucker, P.F. (2007). The Practice of Management. 2nd Ed. Butterworth-Heinemann publishers.
FedEx, (2011). Retrieved on March 2, 2011 from: http://fedex.com/us/.
Shim, J.A. & Siegel, J.G. (2008). Financial Management. 3rd Ed. Barron’s Educational Series publishers.
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