Chapter 1072. The Candyman (1/2)
”Frankly, I'm disappointed.” Ves said as he crossed his arms.
Chief Cyril brought him to his office to discuss the matter of product quality as it was a sensitive topic.
The situation facing the LMC for a long time sounded very simple. As the company's profit margin narrowed due to a combination of inflation and rising cost of raw materials, they came under pressure to cut costs wherever they could.
The manufacturing floor became the focal point of the LMC's attempts at cutting costs. If they could manage to streamline the production processes and cut the total cost of producing a mech by one percent, then that would have quickly resulted in a ten percent increase of the mech's meager profit!
Chief Cyril remained unapologetic for that reason. ”Pursuing quality above efficiency is fine when times were good and when we only had access to a single production line. Yet now we've ballooned to the point where we are working with seventeen production lines at once and shipping out hundreds of mechs a month. Every cost-saving measure we can squeeze out of our current processes directly helps with keeping the company afloat during the hard times.”
”The LMC's reputation has declined. Is that worth the cost?”
”Reputation can be regained. It's not as if we're the only mech company that's been cutting corners during these times. Besides, I think you're overstating the quality issue. With all the tests we've been carrying out at our testing ground, none of our finished mechs are shipped with defects. The complaints mainly come from repeat customers who ordered one of our earlier products. Only then is the difference in quality noticeable, but it's only some minor issues that they really complain about.”
”Repeat customers are our most loyal and valued customers.” Ves stated. ”Mech buyers who keep coming back to us for more need to be rewarded for their dedication to our products.”
”We didn't have the luxury to think that far ahead while we were flailing in the water trying to keep the company afloat.”
As much as Ves didn't wish to admit it, Chief Cyril made the correct decision in helping the Production Department streamline their operations. The fat profit margins the company enjoyed before the war granted them the luxury to pursue excellence. Now that the Blackbeak and the Crystal Lord models only earned a ten percent profit margin on average, the company needed to tighten its belt as much as possible.
Ves reflected on the malaise affecting the company. If he wanted to turn the LMC's fortunes around, he needed to address several points.
First, he needed to work away some of the huge pile of debt the LMC had incurred.
If Ves wanted to increase the company's production capacity, then he might have taken the opposite decision and borrow even more money to purchase more Hanover production lines.
However, he did not plan to invest more money into expanding the operations of his company for the foreseeable time. Operating seventeen production lines at once was more than sufficient to meet the current market demand for their existing mechs.
Ves believed he possessed enough means to earn enough money within a year to work away most of the debt. His personal fortune, which mostly consisted of various royalties and dividends he earned, could be used to lighten the burden enormously, but he didn't intend to touch that fortune.
Instead, he already had a plan in mind to earn a quick infusion of cash. Although it was a bit of a harebrained scheme of his, he nonetheless believed he stood a good chance at earning a couple of billions of credit in quick order.
He'd have to send some feelers to the Clifford Society.
Still, the main source of revenue would have to come from the core business of the LMC, which was selling mechs. The Blackbeak and the Crystal Lord models may be enduring successes to the company, but it was obvious that they couldn't be relied upon to shoulder the burden forever.
The company needed to release a new mech model.
For the next couple of months, Ves planned to work on the joint design project with Professor Ventag. NORA Consolidated would take over most of the production once they published their new design. The LMC would not be burdened with meeting market demand other than to supply the occasional gold label mechs handcrafted by himself to showcase the full potential of his new design.
Second, he needed to change the structure of the LMC as a whole. The company grew from nothing into a respectable major mech manufacturer with sector-wide sales. Yet this growth came so quickly that the company hadn't entirely followed the best plan to operate at this scale.
The company would likely resume its growth now that Ves returned to take the lead. If the company ballooned in size while retaining its current structure, he couldn't rule out the possibility of dysfunction and waste.
In order to smooth the way for the LMC's rise, Ves wanted to shake the company up and prepare it for a new era.
Ves also recalled that this would be the time where the influence of the Ministry of Economic Development on his company would be replaced by Flashlight. The murky intelligence agency may not be the most reliable partner to work with, but he didn't think they would mistreat him now that he earned a measure of their trust. The transition could happen at any day now that the war had formally ended.
Ves had other items on the agenda besides these two major ventures, but he didn't think he should bite more than he could chew. He still had an obligation to work on the joint design project, after all, so he couldn't be babysitting the company all day.
He turned his attention back to Chief Cyril. ”For now, I'd like you to write a report that summarizes the current state of our manufacturing processes from your own perspective. Depending on your feedback and my own judgement, I might decide to introduce some changes.”
”That's fair. It's your company to do what you will. However, the new shareholder won't be pleased if they think you are detracting from the company's profitability.”
Ves smirked. ”We'll see.”
He spent a couple of hours touring the new production lines, paying close attention to the new Hanover production lines. He called up their parameters and memorized the key points so that he knew exactly what they brought to the company.
Since they cost 8 billion credits each, Ves wanted to be sure he got his money's worth out of them all!
Once he spent enough time inspecting the company's manufacturing efforts, Ves decided it was time to check up on Ketis before she felt neglected.
”Since I brought her on in an attempt to groom her into an asset to the LMC, she needs to become more useful first.”
Ves already made some preparations in that area. He sought her out and found her at the testing ground distance away from the Mech Nursery.