Submitted by: Submitted by karthickk
Views: 524
Words: 2161
Pages: 9
Category: Business and Industry
Date Submitted: 06/03/2012 12:05 PM
9-904-080
REV: JUNE 21, 2004
JOHN S. HAMMOND
SchmidtCo (A)
John Schmidt’s project to convert the information system of his automobile parts distribution
business was in real trouble and he knew it.
SchmidtCo distributed nearly 10,000 different items (so-called SKU’s) imported from twenty-one
manufacturers to over a thousand different destinations. The company shipped 20,000,000 pieces a
year ranging from nuts and bolts to radiators. This volume and complexity meant that the information system was literally the backbone of the $40-million, family-owned company.
The project would replace an obsolete, unreliable, 18-year-old system with a state-of-the-art one
that ran under a new operating system on a new server. It would replace and integrate all information systems within the company, some of which were not currently linked. The four-month-old
project was already three months behind schedule and $50,000 over budget. Worse yet, the quality of
the work was far below expectations.
John was well aware that serious problems with such conversions were common. However, when
he heard that one of his customers had just gone through its own conversion and had botched it so
badly that it drove the customer out of business, he became especially uncomfortable. John felt he
had to do something, he had to do it quickly but he didn’t know what.
SchmidtCo
SchmidtCo was a Philadelphia-based importing company that acted as a master distributor in
North America for European industrial and automotive manufacturers. The bulk of SchmidtCo’s
business was importing and distributing automotive replacement parts. The company had 90 employees most of whom worked in its three warehouses: a primary one in Philadelphia, and satellite
ones in Los Angeles and Mexico City.
John Schmidt was the 35-year-old Operations Manager of the company founded by his grandfather in 1950 and currently run by his father. As is the case with many family-owned businesses, he
had literally...