Industrial management studies

Introduction

Pacific Engineering Sdn Bhd (PECOL) is a company that manufacturing water heaters. The products this company produces are PECOL Aircon Water Heater, PECOL Electric Storage water Heater, PECOL Energy Saving Heat Pump, PECOL Solar Water System, and PECOL Renewable Energy Mini Heat Pump. The PECOL Air-con Water Heater can be installed anywhere. It is linked to the split air-conditioner system which comprises a condenser, expansion valve, evaporator and compressor. It is also the world first waste heat reclamation heater. PECOL Aircon Water Heater provides an alternative source for heating up water using the heat generated by either a single air-conditioner or several split unit air-conditioners. PECOL Electric Storage Water Heaters are designed for maximum efficiency and reliability. Our complete range of standard sizes and special made to order models give you a wide choice for all your hot water requirements. PECOL Heat Pump technology is a reverse refrigeration technology that reaches a high level of efficiency & high hot temperature or hot water. PECOL Heat Pump absorbs heat from the surroundings and raises it to usable temperature for heating process. This principle enables a quantity of heat at source to be multiplied several times at no additional cost. PECOL Solar Hot Water system is a proven system that has been manufactured and developed over the years by Pacific Engineering Sdn Bhd. Our latest solar hot water system-the result of extensive research and development-incorporates the most advanced technology from USA. The PECOL design team has created this modern, durable and high efficiency system that will blend beautifully with most housing styles to meet your hot water heating needs. This technology that is your assurance of the finest solar water heating system available today . The PECOL Mini Heat Pump is based on our revolutionary technology-Energy multiplier. This product can effectively save up to 80% of your water heating bills and ideal for your entire household's hot water supply, 24 hours a day. On top of that, you will also enjoy cool air generated as a by-product it is of the MHP system.

PACIFIC ENGINEERING SDN BHD is a Malaysian-Australian joint venture company established in 1968. We specialize in the manufacturing of all types and sizes of water heaters, ranging from the domestic 3 gallons unit to the 1,000 gallons industrial-sized heater. We are the pioneers in the manufacture of water heaters in Malaysia under the trade name PECOL and were duly accorded "pioneer status" by The Malaysia Industrial Development Authority (MIDA). Pacific Engineering Sdn Bhd invented the waste heat reclamation Aircon Water Heater 20 years ago and today it is widely used all over the tropical regions of Australia and other Asian countries. In 1980, Pacific Engineering Sdn Bhd was the first company in South East Asia to design and assemble Energy Saving Heat Pumps for hot water heating. Today PECOL's Energy Saving Heat Pumps are widely used by major international and domestic hotel chains, resorts and hospitals. Pacific Engineering Sdn Bhd today is a far cry from our humble beginnings in the early 1970's. Our business focus has since expanded dramatically from being only a manufacturer of domestic electric storage water heaters to designing systems for both the industrial and commercial markets and finally grown to become the industry leader in Energy Saving Water Heating technology. For over 30 years, PECOL has and continues to be a name synonymous with hot water in South-East Asia. Apart from a full line of water heaters, our core product, our PECOL range of products has expanded to include products for industrial and commercial applications such as Heat Pumps, Solar Heaters, Coffeematics Machine and also products for the domestic household in kitchen appliances such as our Quick Boil Hot Water Dispensers. On average, our Research & Development department consistently rolls out new products every one to two years. These new and highly innovative proprietary products have strengthened the company's market share and help keep us ahead of our competitors. Our corporate headquarters and modern manufacturing facility is located in Petaling Jaya, Selangor Darul Ehsan, covering an area of over two acres. We employ about 120 workers of different categories. Our semi-automated manufacturing plant is well equipped and our staff specially recruited and trained to maximize productivity and economy to achieve our high standards set to meet your delivery schedule. We strive to provide the best possible service, technology, knowledge, and facilities for the benefit of you, our customers.

The customers in Malaysia are from different fields such as hospitals, resorts, hotels, housing, industrial, commercial and residential properties. Besides that, the water heating technology is also expanding to other international countries such as Singapore, Philippines, China and Indonesia.

International industries that are using PECOL's products

Indonesia

  • Kempinski Hotel
  • Nagoya Plaza Hotel
  • Novotel Hotel

Philippines

  • Hilton Hotel
  • Kikko's Resort
  • Bohol Beach Club
  • Marco Polo Davao
  • Mayflower Pension House

China

  • Sofitel Hotel
  • Income Tax Department

Singapore

  • Orchard Hotel
  • Shangri-La Hotel
  • Carlton Hotel
  • Oriental Hotel
  • Pan Pacific Hotel
  • Singapore Raffles Hospital
  • Hospital Sentosa
  • Terminal 3, Changi Airport Singapore

Personnel management

Departments

In a company, the base of the company is very important do help the company to grow. Hence, the process departmentalization comes in. Departmentalization is a process of dividing and distributing work activities into units within the organization. This arrangement lets employee specialize in certain jobs to promote efficient performance. The marketing effort may be headed by a sales and marketing vice president, who direct the work of sale people, marketing researchers and advertising and promotion personnel.

This department is mainly for create new product to company. They will collect all date or feedback about the product and improve the quality of the product. They also help to maintain the machine or repair the product.

Managing Director

The most powerful in top management. Basically makes decision such as whether to introduce new products, purchase other companies, or enter new geographical markets, and also leading the whole company to the success.

Executive Director

Next level after the director. As the left and right hand of director, Executive Directors are responsibile for making decision if the director is not available. The Executive Director had to form a team to manage how to push their products to markets and how to make demand for the company.

Secretary

Secretary is to help the executive director.

Business Support Manager

As part of the Business Support team, provide efficient administrative support to the Business Partners within the Employment Services team as they provide employment advice, consultancy and training. To take responsibility for managing a range of projects including the organising and administering training events and seminars, updating website and intranet and building customer contacts.

Senior Project Sales Manager

Senior Project Sales Manager are are responsible for planing the project for their product and then sell it to other company or home user. They usaully set up a meeting with their worker to diccuss how to plan the project, what the project need and the budget for the project. Then they will porpuse a proposal to other company.

Senior Manager Production and Quality Control

Senior manager production and quality control are responsible for maintaining the quality and reliability of products and services. They also may set up and perform testing on materials, parts, or finished products to measure product performance under a variety of conditions. Quality control managers are responsible for the documentation of test results. After products have been fully tested, quality control managers evaluate the data. They prepare summaries to show how the product might differ from existing standards of quality and reliability. They may suggest changes in how products are made to achieve the best quality possible.

Finance Manager

Finance Manager are responsible for the financial of the company. They have to prepare the annual report which is the income statement, balance sheets, and analyses of future earning and expenses. They require extensive and specialized knowledge to reduce the risks and maximize the profit for the company. They work in teams, and acting as business advisors to top management.

Customer Service Manager

Customer service manager are responsible for the customer of the company. They have to develop the system for their customer profile so that they can perform more efficiency.

Human resource management

Human resource management is one of the most important department for a company. Human recource mangement concerns with managing human resources. Every manager is involved with human resources decisions in his or her unit of business. The decision may include: recruiting, reviewing application form, interviewing applicants, inductiong new employees, appraising employess performance and employee training. Human resource planning is to ensure that there are enough number and kinds of people in the right places and the right times. The planning involves assesing current human resources, assesing future human resource needs, and developing a program to meet future human resource needs.

Recruitments

The company makes recruitments from the internet by using online job-searching websites such as JobStreet.com and Jobsdb.com. This is considered the fastest way because internet is widely used in today's society. Other ways of recruiting new employees for the company is using advertisements on newspapers and signboards. These methods are the earliest methods but they still have their effects.

Selecting the employees

The company selects their employees from the candidates through interview. From the interview we had with the Executive Director of Pacific Engineering Sdn. Bhd., Mr. Alan Heng, the criterias for selecting their employees are their competency, experience and qualifications. According to Mr. Alan, the company holds the concept of PDD (Passion, Determination, Drive). When making their choice in selecting employees. The company also prefers people with high EQ and are team players. So, the company chooses employees based on the working attitude of the candidates. Their experiences and qualifications are just to determine the salary they get when they work in the company.

Training

Pacific Engineering Sdn.Bhd. gave a lot of learning opportunity to their employees. Such as, giving in-house and outside training for their employees. Mr.Alan, the executive director of the company says that, he welcomes employees that seeks for training, because he thinks that learning is a no end road, whenever you retire or wealthy you still have to keep learning. In addition, the employers can be claim back the training fee 100% when finish their training. He also says that, the company also organize trips and trainings to the employees as part of a play and leaning process.

Motivating employees

A good company will take cares of the employees' welfare. The company took some of the employees to watch live Formula One race recently as one of the ways to motivate them. Besides that, they also organized family day with all of the employees and have some activities together. This will help them to relax and enjoy the time with their family and colleagues and also Mr.Alan says that, the most important thing to motivating their employees is using the etical management which means that to share the success with each other.

Complains

Other than dealing with the investigating and solving the problems faced by the customer, PECOL create a system known as the common data bank. When there is a complain about their product. their techician will response quickly and determine the causes of failure. Then, they will record the problem and causes of the problem and save it into the common data bank so that they can deal with the same problem easily when there is a similar problem occur again.

Disciplinary action

The Executive Director of PECOL Mr.Alan says that they will not harsh to the employees even they make mistakes. If an employee make a mistake, they will deal with the problem based on the types of mistake made. They will counsel the employees by talking and know his condition and reason better rather than reprimand him without questioning. Maximum of 3 warning letter will be send out to an employee before he gets sack. However, that will be the last option. In their opinion, they will send their employees to training rather than sacking.

Productivity Techniques

The water heaters from PECOL are made under the demand of customers, which means they will produce different types of products based on the order taken by the customers. The types of products being made are received from the marketing department which is in the form of "production document".

PECOL's water heater production process consists of these few processes which are:

There are different sections in their production process which is

  1. Material Preparation and Safety Test
  2. Coating and Insulation
  3. Assembling and Finishing

Material Preparation and Safety Test

The main raw material is stainless steel which is imported from Japan. This is to ensure that they can sustain the high pressure and high temperature which will be produced by the heater. In addition, the stainless steel used must be approved and passes the international quality standard given by SIRIM. In order to pass the international quality standard, PECOL introduce some high standard procedure of quality control system. Incoming Quality Control is used to control the quality of the raw material.

When the material arrived, they were sent directly to the shearing process to make it into desire shapes and sizes. The materials will then be transferred and grouped into different groups according to their own dimensions. The accuracy of the dimension is control by the Process Quality Control.

The circular cutting machine from German is being used to cut the stainless steel into a flat circular shape which will be used as the cover of the water heater. After that, the hydraulic pressure machine is compressed onto a mold to shape the plate into a bowl-liked form. There are two types of molding process which can mold the material into desire shapes which is cold work and hot work. Hot work means supplying heat onto the material before molding. It is mainly use to mold plastic material because cold work on plastic will break it. However, since the material used is stainless steel, they do not need to use any heating process to soften the material. Later on, the cover is punched using a machine that later on the heating element cover is used to fix on it.

The material that will be used as the body will then go through the rolling process which will then make it into cylindrical form. The plate will go through the rollers and the end of the plate will be curled up to ease the rolling process that will make it into cylindrical later on. Welding process is then followed on.

There are 3 types of welding process which is

  1. Spot welding
  2. Longitudinal welding
  3. Circumferential welding

Spot welding:

This process is mainly for the outer body. After the plate is made into cylindrical form the only few spots on the sides are welded, this is because the outer shell does not need to sustain any high pressure. This process is manually handed.

Longitudinal welding:

This process is exclusively for the inner body. The side of the cylinder is completely welded because this part is the most important part of the heater. The reason is because high temperature water will causes the pressure to increase up to 300psi which is approximately 20bar (20000 Pascal). This process can be done by both either manually or automatically.

Circumferential welding:

This process is to connect the bowl-liked cover and the inner cylindrical body together. The parts are fixed onto the welding machine and then the carbon rod is placed on the welding spot. The worker then slowly and consistently rotates it in a complete cycle.

A CNC machine is use to lathe the cover of the heating element to ease the fixing of heating element and the cover. On the other hand, another machine is used to coil up the steel which will later being fixed onto the heating element cover and then onto the main cover.

After completing welding, the inner body has to go through a safety test before it can continue with the next process which is pretreatment and coating. Pretreatment is a process where the materials are degreased and clean from dirt.

The inner body is tested with high pressure at around 300psi to determine whether are there any leakage. Failing to do so will causes explosions because the pressure build up in the heater will be very high. In the company, the quality control department is very strict and every component has to go through strict checking before going to the next process. If there are any failures, they will send back to the welding process. With this, customer service will receive lesser complaints and indirectly the company will have a better image. However, there might be a risk that the production period being delayed.

Coating and Insulation

The outer body is transferred to the coating process. The difference between coating and paint is that coating uses powder and paint uses liquid paint. Only metal and inductive materials can go through the coating process because it uses the concept of positive and negative charges. The metal will be positively charged whereas the powder is negatively charged. Through physics, positive ions will be attracted to negative ions. Hence, the powder stays on the metal surface. The coated material is then transferred to a huge oven and is dried at around 200 degree Celsius. The high temperature melts the powder causing it to stay on the surface permanently. The coating process undergo in a "cyclone". The excessive powder that did not stick on the metal surface will then blow up into the cyclone which will break down the particles that is environmental friendly and will be reused.

Due to some larger capacity heater, the oven is too small to fit into it for drying process. Hence, manual painting is used instead of coating.

Assembling and Finishing

After coating the outer body and the inspection of inner body, both of them are then moved on to the next stage which is assembling. There exists a substance in between the inner and outer body which is polyurethane. Polyurethane is a mixture of two liquid chemicals which is then solidifies over time. The polyurethane is used as the inductors which minimize heat lost in between the inner body and outer shell. After the polyurethane solidified, the wiring for the heating system is fixed on. The wiring system that PECOL uses is name as the Triple Safety System. This system is essential as it covered 3 main safety issue that others brand's product might not have it.

  1. Thermostat for the heating element will only reach 60 degree Celsius.
  2. Second stage thermal cut-off will activate when the temperature reach 88 degree Celsius.
  3. Pressure Relief Valve (PRV) on the inlet of the heater will turn off when the pressure reaches 100psi. The same case happen to the Temperature and Pressure Relief Valve (TPV) on the outlet of the heater will be turn off immediately when the pressure reaches 100psi or the temperature reaches 99 degree Celsius.

The purpose of having 3 different types of precautions is because when the temperature of the heater increases without controlling, it will exceed the limit of the pressure that can be sustain by the inner body and eventually it will explode. Moreover, the water of the temperature that exceeds 60 degree Celsius will burn human skin. To avoid the serious phenomena happen, every product will go through an electrical inspection before packaging to avoid any defective being sent out without noticing.

The targeted volume of the production for PECOL is 15-20 gallon per shift and yet they have achieved 20-25 gallon per shift as their worker are all proactive due to the motivation given to them. This is not a small amount as the production for PECOL is not fully automated. Furthermore, every single product has to go through the hydrostatic leakage test which is carried manually. In order to increase the efficiency and quality of the product, PECOL should revolute the production process such as changing the machines that still need to control manually to full automated machines. Besides that, they also can simplify the process by using some programs which able to combine few process together. With the revolution, PECOL will be more competitive. This is because PECOL is producing more products with less time and less recruit. Hence, PECOL will able to lower down the cost of the product since the exact cost of the product is reduced.

Marketing Strategy

PECOL do not go through any forecasting about their products. PECOL produce their product according to demand, it means that they receive orders from their customers and they produce the product based on the order list. As from what we have learnt, a company will go through 3 types of forecasting which are market potential, sales potential and sales forecast. Their main concern is on promoting few of the good selling products to their customers.

Marketing concept and strategy are group into 5 alternative groups which are the production concept, product concept, selling concept, marketing concept and societal marketing concept. PECOL concentrate on their marketing strategy in three out of five of the above concepts, which are production concept, product concept, marketing concept and societal marketing concept. Currently, PECOL do not sell their product to the market through any electronic shop, this is because their products is more expensive compare to other available products in the market. This is because PECOL cares about the quality of their product which they are using imported machines and materials from overseas country such as Germany, America United, and United Kingdom. Hence, indirectly the production cost will be higher compared to other electronic devices. However, they are trying to reduce the price of their products so that it is economically affordable by maintaining high quality products. Therefore, we can conclude that PECOL do not apply production concept (high product cost) and selling concept.

PECOL have higher demands from the month January to March. Sometime when they found out that their production cannot meet the deadline. They will distribute some of the orders to other company in order to complete the task and meet the request of the customer. In this way, they can complete their tasks and the supporting company can also be getting some of the profit as well, so this makes a win-win situation. In this situation, PECOL applied production concept (demand exceed supply). PECOL products have good quality and performance. This can be proven because PECOL always offer 5 to 10 years of warranty period to their products and they always get good feedbacks from their customers. Besides that, PECOL is a customer-oriented company, they know the customers' need and therefore they try to satisfy them by producing the suitable product. In short, we can say that PECOL has done a great job in product concept.

The marketing concept rests on four important areas which are market, customer needs, integrated marketing and profitability. PECOL concentrate in customers need, market and integrated market. PECOL produce products that use green energy and concern about environmental friendly. In these days, the price of petroleum keeps increasing and also it has affected the price of electricity. In addition, the world is now facing global warming. They are trying to counter-act and be a part to help saving the earth. All of the staffs in PECOL had been trained well to face customers. For example, if they get complaints from customers, they will respond to their customers as soon as possible. Even though all the technicians are out station, they will also request the sub company to check and investigate on the problem. So, we can say that PECOL have good potential in societal marketing concept. Other than making profit from selling their products, they do concern on consumers' satisfaction.

Marketing mix consists of everything that the company can do to influence the demand on the products and it can be collected into 4 groups of variable known as the "four Ps" which are product, price, place and promotion. PECOL always have promotion to sell their products. Normally, they will approach their customer by either going to them or the customer meet up with them. They will explain and present their ideas and products through presentation and also hands on with the product so that the customers can know how the products look in real like rather than in diagrams or images. On the other hands, they also promote their products through advertising. They prepare some catalogs for their customer to let them understand and know their product easier. They will also give out some handout to their customers as references. PECOL have created their own company's website which can let people know more about their company and their products without going to the site.

Price is one of the most important elements and it can be said as the main element that attracts consumers. However, PECOL's products are high quality and high price at the same time. This is the reason why PECOL cannot produce their products in large quantity because of low demand. This is one of the weaknesses PECOL Company currently facing and this give the company a way to improve so that they can one of the best in water heater industry.

Recommendation

They should separate out the departments such as quality control and production department rather than combining it together and also having two different managers to in charge of the departments so that the process on each department can run smoothly and more efficiently

The way they motivates their employees is very good in the sense of organizing trips to overseas with their family along. They sent their employees to attend workshop and trainings that improves the working standard of the employees

Compared to other larger companies, they will not sack their employees based only on the report given from their manager. They will talk and counsel them to get to know them more, learn more about their condition and make the best decision based on it.

Their customer service is very responsible because once they receive any complaints, they will respond immediately even though they are short of man power.

The environment in the factory is filthy. Therefore, they must enforce the rules and regulations of the factory so that they can work in a more comfortable and safe environment.

They did not wear any protective outfits while working such as goggles, gloves, masks, helmets and so on. This may be very dangerous because accident can happen at anytime anywhere. Protective gears might save their life when accident occurs.

The production process is now semi-automated, however they have achieved and exceeded their expectation which is from 15-20 gallons per shift to 25-30 gallons per shift which is a good role model to other companies. In my opinion, if the factory is operating fully automated, they might even double the production rate.

The company should provide uniform to their workers to improve their working spirit and the appearance of the workers rather than casual wear

Their products are expensive because of the material used which limited their number of customers. To improve their selling rate, one of the best options it to reduce the price and yet maintaining the quality of the product so that they can sell more of their water heaters.

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