Birmingham Amusement Answer

This case exercise described the views and objectives of various managers in a company which manufactures gaming machines. It highlights the contributions made by three sets of people within the organization. The research and development people who are responsible for incorporating the latest technology ideas into the products. The marketing staff who are keen to understand the trends in the industry and meet them before any competitors. The production operations staff who are somewhat squeezed between conflicting objectives of speed and cost.

1. What do you think were Bob Greenwoods objectives when he ran the company? Bob seems to be an enthusiast who derives satisfaction from the incorporation of novel technology in the companys products. He sees product development as the main driver of the company, a process which combines high technology and fashion. The key organizational linkages under Bobs vision of the company are likely to be those between Marketing (who should understand the trends in the market) and Product Development ) who understand the potential of new technologies). He seems to give a lot of time to considering the cost consequences of continual product design changes. See the figure below.

Product Development Market trends

Marketing

New technologies

2. List what you think might now be the priority objectives of: a) the production manager The production manager sees himself as being squeezed between two sets of pressures. The first, from Product Development, is represented by a series of product changes. No sooner has the production system been set up to make one mist of products than it is replaced by another. This continual change prevents the production operation from moving down the learning curve and achieving the stability which will let them reduce costs. The second set of pressures comes from Marketing, who want fast delivery both of existing products and of new products. The production manager must therefore try to achieve: Low costs; Fast delivery; Short time-to;-market of new products.

New designs Production

Product Development

Delivery and quality

Marketing b) the marketing manager The marketing manager certainly does not seem to be interested in costs. Customers for these products are making so much profit from them that they are relatively indifferent to the price they pay. However, the availability of new products is crucial to making a sale. This has two aspects. Firs, the existing product must be delivered quickly to any customer who places an order. Unless prompt delivery is promised the customer could go elsewhere. Second, the company must be first onto the market with any new fashion or technical development. Being second in following a trend might substantially reduce sales.

The quality of the products is also briefly mentioned, as is product reliability. The market manager therefore requires. Fast delivery; Short time-to-market of new products; Product reliability; Product quality.

c) the new boss The new boss faces something of a dilemma. On the one hand competitiveness in the market clearly requires innovation and product reliability. On the other, although the company is not under price pressure, profitability seems to be unsatisfactory. The only explanation for this is that costs are too high. The key to this problem must be the development of enhanced flexibility. What Slack et al call response flexibility (that is the ability to change rapidly and without excessive cost) must be of importance to the production manager. Yet nowhere in the case exercise is flexibility mentioned by the various managers. Two types of flexibility are likely to be important new product flexibility and volume flexibility. New product flexibility means that the operation must be able to introduce new or modified products quickly. This topic is treated in Chapter 5 of Slack et al and depends on a close collaboration between the Product and Product Development departments. Volume flexibility means that the output of the operation can be adjusted quickly. This will be important because of the intrinsic unpredictability of such a fashion oriented market. It is treated in Chapter 11 of Slack et al and depends on a close collaboration between Production and Market.

Production

Product Development The flexibility to adapt to a fast changing market

Marketing