TRIAS:

DECISION ON CABLE LADDER

PRODUCTION

BY
NIROSHINI S
ROHIT SAI
VAIBHAV VARKHEDE
Problem and Available Options
• Indonesian leading manufacture of cable ladder
• Fierce International Competition and Narrow Margins
• 3 Production options
• Existing GI material and 4 stage process
• New Material from PSC ,North Korea and simplified process
• New Material from NSH, Japan and simplified process

• Tender Won at $1.68/kg

 Existing Material
Pros:
Type of Cost Value/Kg • No Import Required
Raw Material
0.65 • Reliable Suppliers
Cost
Labour Cost 0.25 • Familiarity with Process
Repair Cost 0.07
• Limited Liability for QC test failure
Logistic Cost 0.1
Galvanasation
0.48 Cons:
Cost
Cost due to • Multistage Process
0.0378
Wastage
• High Labor and rework Cost
Total Cost 1.58
• Quality subjected to labor
Current process flow

Existing Material Fabrication HDG QC test

New Material
• Simpler process flow
New Material Fabrication

• Only two mills produce New Material: PSC, NSH;

• Supply risk
Costs PSC ($/Kg) NSH ($/Kg)
Labour 0.15 0.15
Rework charges 0.0075 0.0075
New Material 1.18 1.19
Delivery penalty 0.14 0.224
Total 1.4775 1.4715

• From the above we can see that new material from PSC is cheaper than
NSH & existing material
Opportunity and Risk with New
Material

Opportunity Associated Risk:

• Additional Cost Benefit • High Dependency: Only two mills PSC, NSH;
• Eliminate two production stages • Supply Chain Delay
• No Skilled worker required • Clearance Permit Required
• Low Rework Cost • High Probability of Defects
 Recommendation
• Biggest ever Cable ladder requirement
• External Environment : Fierce Competition
• Narrow Margin of only 5%
• Uncertainty over timely delivery
• High Penalty if not followed timeline
• Very small reward compared to risk
• “Stick to current production method and suppliers ”