BTEC Level 3 Unit 4 Enhancing Competitiveness in Engineering Assignment: Business Functions, Cost Control & Quality Management at KSB and EDF

Task A: Vocational Scenario/Industrial Context

You are working as a final year apprentice in a large engineering company. Your supervisor is pleased with your work, your understanding of the way in which the company operates and the efficient way in which you carry out tasks. As a result, your supervisor has asked you to investigate ways in which the company can become more competitive and respond to trade considerations more efficiently. She wants you to explore how similar sized companies can gain a competitive edge over other companies, and to evaluate methods which could be used to create a competitive advantage. Your supervisor has asked you to explore the business activities and trade considerations which influence the decisions that engineering companies make. You are to report back on these, as these will influence the competitiveness of the company.

Task 1 (A.P1, A.P2, A.M1, A.D1)

You are required to explain, analyse and evaluate the key business activities of an engineering organisation and the trade considerations which together combine to influence the competitiveness of an organisation.

To do this:

You are required to consider your employer (Electricité de France (EDF) or Pennon Group) as the case study. You will research the key activities of the different business functions within your organisation, including for instance, manufacturing of products or delivering services, supply chain management, marketing and sales, customer relations, resource management, staff recruitment, staff management and finance, etc. By doing so, you will explore and understand how key business activities influence an engineering organisations such as your employer. You will also have a good understanding the impact of trade considerations such as tendering and contracting on the organisation’s performance. In furtherance, you will explore the methods employed by engineering organisations to gain competitive advantage, for example the role of intellectual property rights to increase competitiveness.

1. Explore the key business activities within your organisation and explain how these affect its operations and performance as an engineering organisation.
2. Investigate and explain how your organisation conducts tendering and contracting as trade considerations for doing business.
3. In the context of competitiveness, analyse how your organisation uses its key business activities and trade considerations to create competitive advantage.
4. Evaluate how your employer as an engineering organisation combines its key business activities and trade considerations to influence its performance and creates competitive advantage for itself.

Your report should include information on:

• the various business functions within your employer as an engineering organisation. You should provide details of how each of the functions within the organisation contributes to and influences the competitiveness of the business.
• trade considerations, including contracts and tendering and how these influence the given engineering organisation. You should refer to terms, warranties and the consequences of non-performance along with the documentation that would accompany a contract or tender.
• information aiding the evaluation of the methods that the engineering organisation could adopt to gain a competitive advantage, and their benefits, including protecting intellectual property rights and outsourcing to manage costs.

Evidence you must produce for Task 1

A written report detailing how key business activities and trade considerations influence an engineering organisation and how these can be adopted to create competitive advantage, based on a case study for a given engineering organisation. Ensure that you address all the requirements of the criteria covered.

Task 2 (B.P3, B.P4, B.M2, B.D2)

You are required to investigate how an engineering organisation allocates costs; and the ways in which costs can be controlled within an engineering organisation. You will also use activity-based costing to identify any inefficiencies associated with the engineering activities, and the impacts of cost control on profitability. For this reason, you have been provided with KSB’s Pump Impeller cost financial information in Appendix 1. KSB is an engineering organisation which produces engineering products such as pumps, valves and other services. Note that KSB is one of the suppliers of valves for the HPC project.

1. Understanding the costs associated with either producing a product or providing an engineering service is important, and often, engineering organisations do allocate costs to individual business or production activities and classify them into direct costs, indirect costs, variable costs, semi-variable costs, fixed costs and general/administration costs. You are now required to investigate and explain the reason why engineering organisations want to analyse and control costs, including how decision making can be influenced.
2. Based on the KSB’s financial information provided in Appendix 1, complete and record an accurate, refined and iterative activity-based costing exercise to generate a cost model for the pumps’ impellers given. This 5-stage costing exercise should include:
   1. identifying activities
   2. assigning resource costs to activities
   3. identifying outputs
   4. assigning activity costs to outputs
   5. assigning activity cost pools.
3. Reflect on the results of your accurate and refined activity-based costing exercise, by explaining how costs are categorised; identifying those cost areas that have the greatest impact on the profitability of the product or service that you have investigated; and evaluating the reasons for producing an activity-based cost model.

Evidence you must produce for Task 2

Research and problem-solving project to explore the costs associated with engineering activities and to complete an activity-based cost model for a product or service.

Task 3: Vocational Scenario/Industrial Context

You are working as a final year apprentice in a small engineering company. Your supervisor is pleased with the work that you have done so far to investigate the ways in which your company could gain a competitive advantage over other organisations, and your application of activity-based costing.

Your supervisor has now asked you to investigate quality management systems and how these can be used to give your engineering organisation a competitive advantage over your rivals. Once you have done this, your supervisor would like you to carry out a value analysis exercise for a product or service so that you can identify areas where the value of the outputs could be increased.

Task 3 (C.P5, C.P6, C.M3, C.M4 and C.D3)

You are required to investigate how an engineering organisation can use quality management systems and value management processes to improve the value of the products or services that they manufacture or provide. You will also investigate international quality standards and the various quality systems that are used by engineering organisations to improve the quality of their outputs. For this reason, you have been provided with KSB’s Quality Standards and Value Analysis information in Appendix 2. You are required to use this as a starting point from which to carry out your own research, and the basis from which you carry out your value analysis exercise.

You need to produce a report on:

1. Among the standards that KSB follows to demonstrate that they have a quality management system are the ISO9000 and ISO14000. Explain the purpose of these quality management systems and the how value management impacts on engineering activities.
2. Investigate the implication and analyse their purpose of implementing Total Quality Management (TQM) and the Plan, Do, Check, and Act (PDCA) cycle by an engineering organisation. Also, analyse how value management can improve the efficiency of processes and increase the profitability of an engineering organisation.
3. Using the data provide in Appendix 2, carry out a value analysis exercise for the activity given. Your value analysis should be divided into five distinct sections: information phase; analysis phase; creative phase; evaluation phase; and development and reporting phase. Investigate and record the reasons for poor value for your given product or service; this could include aspects such as a lack of innovation within the organisation or factors such as poor communication.
4. You will the use the results obtained from this activity (i.e., using the data provide in Appendix 2 as in (3) above) to identify which aspects of the activity can be improved to increase the profitability and efficiency of the process being investigated, and suggest methods to improve the activity, identifying those aspects that will offer the greatest benefit to the organisation.
5. Evaluate your findings from the quality management/standards report (i.e., the ISO 9000 and ISO 14000 families, TQM and PDCA cycle) and the value analysis exercise to identify which areas can be improved to increase the profitability and efficiency of the process being investigated. In doing this, you are required to suggest methods to improve the activity and identify those aspects that will offer the greatest benefit to the organisation, using evidence to back up your suggestions.

Evidence you must produce for Task 3

A report on the quality management systems and value management processes used by engineering organisations; and an applied value analysis exercise to determine if further value can be created from a given engineering product or service, and an evaluation of findings based around the principles of value management and quality systems.