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Background
Company Y manufactures many different materials. It already had a plant operating in Thailand in line with its Asia strategy, and decided to set up a new plant in Indonesia to handle the anticipated rise in demand in the future.
Issues
Power receiving plan has delayed due to the failure in process management leads.
At the moment, operation is progressing smoothly at the Thai plant. However, Company Y encountered many difficulties when they attempted to set up the receiving substation system. It signed a package deal with a local engineering firm, but it failed to implement the process management for individual pieces of equipment because lack of communications from language and cultural gaps. “The engineering firm decided on gas, electricity, and other heat sources on their own without even consulting us. There were also problems in terms of safety. They were obviously inexperienced and not capable” says an employee from Company Y who was involved in the project. Ultimately, these problems led to a delay in the power receiving plan. When the time came to construct a new plant in Indonesia, there was a need to conduct strict process management and remove any factors that could cause delays.
Lack of knowledge of the complicated procedures for different applications in a foreign country.
In addition, Company Y did not have enough knowledge about establishing contracts with electric utility companies in Indonesia and submitting applications to governmental offices. The regulations on these matters vary from country to country, so what Company Y had learned in Japan and Thailand could not be applied to Indonesia.
“Work must be done in accordance with Indonesian legislation and labor practices at each stage of the entire project, from the planning and design to the actual procurement of materials and construction,” said the same employee, remembering how the company was completely lost and unable to come close to a solution. “It was absolutely impossible for us alone to understand and do everything on our own.”
Ponit to be addressed
- Company Y was unable to implement the process management for individual pieces of equipment because it had signed a package deal with a local engineering firm.
- When individual pieces of equipment were selected, some of them did not fit into company’s consideration.
- They did not have enough knowledge for overseas cultures and business practices, and in differences in the laws, regulations, and systems.