simulation

Introduction

Cast:

Jacob Romero - General manager

You - Division manager

Alan Sidu – Forman

Reggie Atkinson – Charge hand (welding – and union steward)

J Simon Chu – Charge hand (assembly)

Rena Davis – Charge hand (shipping)

Joe Damson – Charge hand (design and quality)

Background

Big Dog, a design, manufacturer and rebuilder of small industrial equipment, was founded in 1987 by James Lambert and Jose’ Perez at the kitchen table of James Lambert’s home. Both men had welding and engineering degrees and were unhappy with the future prospects of the businesses where they were employed. Big Dog with an investment of $25,000 each and a two year time line to see of they could be successful. Big Dog enjoyed early success, but began to experience quality and delivery problems as it grew from a small shop of ten employees who built and repaired equipment into a design and manufacturer of the equipment. In addition, the ebb and flow of the market for small equipment, new competitors with more resources and a lack of a coherent vision and strategy on the part of the owners influenced the growth of the business.

One of the main issues facing the business was the lack of a coherent vision and strategic focus on the part of the two owners. Inconsistent goals, the desire to maintain a small, intimate, family environment on the floor and offices, and a lack of follow through on initiatives and plans meant they business tried to be all things to all people. James and Jose rotated the role of CEO and COO every two years.

In 2010 Jose decided to work half time due to serious health issues but kept his role as in the business. In early 2011 Big Dog hired its first general manager, Jacob Romero. Jacob’s first goal was to establish, for the first time, a management team to run the day to day functions of the business so the two owners could concentrate on business development with Jose looking to retire and sell his ownership stake in 214. Jacob spent the first three months putting into place a management team including the Finance manager, Design manager, Customer delivery manager, Sales and marketing manager and Quality manager. Jacob spent the first three months of this year working with James and Jose’ to develop a core set of strategic goals and plans for the next two years. Three business challenges faced the business:

· New, low cost competitors from China and South America entering the region

· Lack of investment in technology

· Poor quality of deliverables and designs to meet unique customer requirements.

Jacob has just returned from a two day planning session with James and Jose who attended out of interest and concern for his shareholding.

Initial Meeting in your office:

Jacob,

(sigh) “… and we have a focus now for the future. James vision is to develop and better integrate the core business and Jose vision is to break the business into competing units. They have agreed to step back from running the daily activities of the business and appoint a management team to run the business. Both men have agreed in principle to support the management team. Of course, the management team is not united on how to move forward but has developed a set of short term strategic goals for your team.

Three main business goals are set of the year:

1. Drill deep into existing customers for more repairs and rebuilds as this is the most profitable part of the business.

2. Develop and deliver a Capex plan for new equipment and tooling requirements.

3. Reorganize the shop floor to exploit efficiencies and economies of scale in the design, building and delivery of equipment.

I want you to meet with your team and review these goals and come back to me with plans for how to meet them.”

Your office:

You leave the building for a lunch break in the bustling corner of a local coffee ship. You take your I-pad and ponder a blank notes screen. You say to yourself “better speak to my guys!”

Situation: A meeting of a production team at Big Dog Industries.

ALAN

I’m relieved to hear we have some clear goals although I’ll believe it when I see it! And what does this really mean to get “efficiencies” and “drill deeper” with customers.

REGGIE

I agree. This is fine but my guys are already stressed with deadlines and quality issues so let’s make this easy and painless, OK?

RENA

Yes, we have work to do and this take time -- I think a lot of our employees aren't really sure what we expect anymore anyway. In the past few years, we've gone off in several different directions. We have a lot of people working really hard on the wrong things. And what the hell is Capex anyway?

SIMON

I agree and I really don’t expect much to happen since this really does not involve us directly anyway. Just tell us what needs to be done to get to these goals and I’ll tell my guys what to do!

ALAN

But at least we have a direction for the first time in a long time. Let’s give management the benefit of the doubt here, no?

SIMON

(shaking his head side to side) If you say so but I’m skeptical!

REGGIE

What did the GM actually say?

You recount his comments. Charge hand (welding – and union steward)

JOE

Hey, it’s more information and is a new direction, eh?

YOU

Before we go any further, we need to decide on what needs to happen in our shops to make this happen. It's fine to talk about this, but what do we really expect them to do?

Your team looks to you! What will you do? Please list the steps you will take to get your team oriented to the strategy. Please offer your rationale!

___________________________________________________

JOE

OK, at least we have more information than in the past. And some sort of a plan

SIMON

I hope this works. Colour me sceptial!

ALAN

I think a little structure will be good for this company.

RENA

It's all talk right now. I'll believe it when I see the management team working well.

SIMON

Come on, people, we are all in this together.

YOU

How do we share this with out teams?

1. Post on the chop message boards– it is the fastest and most efficient way to communicate about the strategy. Questions can be posed.

2. Charge hands meet with their teams. This will allow all employees to hear the same message from the same person at the same time.

3. Send an email – this makes sure the message gets out.

4. Attend a meeting with each Division. Although time consuming, this will allow you to personally take the strategy to each unit and tailor the message.

Please choose an option and write down your rationale.

Email:

To:

FROM: Marty Keller, Director, sales and marketing

RE: Product Improvement Ideas

Cc: General Manager

I just had an interesting conversation with the Vice President for Strategic Planning at GlowMo. They're looking long-term at expanding their landscaping operations into Southeast Asia. He was concerned that all Mobots have been shown to be less reliable and require more maintenance in high-humidity situations, and that many of the areas in this new market have high-humidity climates.

Email

FROM: Angela Connors

TO: You

RE: Communicating the Strategy

Please share with me the rationale for your choice of communicating the strategy. I want to make sure I am in agreement.

You are listening to the radio …………………….

MALE ANNOUNCER (radio)

…the win was the first ever in the history of the World Cup. In business news, demand is higher than supply for many of the parts used in high technology manufacturing. Microchip-controlled motors, used in products as diverse as helicopters and robotic lawnmowers, are in such high demand that many manufacturers are backordered. Motor prices are expected to rise steadily.

In the hallway ……..

GRACE

So Paul is completely frustrated by our vendor, MotorWorks. They make the best motors for our mobots, but they don't always deliver on time. So, now he's saying we should start building our motors internally.

MARTY

Doesn't he realize that MotorWorks is also our customer? They buy mobots for all of their facilities. If we stop buying from them, they might stop buying from us!

GRACE

Well, you better talk to him about that. I hear he's going to the boss with his idea.

Video Phone call

PAUL

Good morning, I guess you're not in yet. We start the day early in Operations. Anyway, I'd like to recommend we begin building the microchip-controlled motors for our mobots internally. We've been purchasing them from MotorWorks... the quality has been good, but delivery has been unpredictable. Frankly, I think we would do better to build the motors ourselves. I'll send you an e-mail with the details.

Marty Keller in your office ….

MARTY

Hi, I just need a minute of your time. Paul told me he would be talking to you about making our own microchip-controlled motors. I'm sure you're aware that our current vendor, MotorWorks, is also a large client. You can be sure that if we stop buying from them, they'll stop buying from us. I hope you'll take that into consideration when you discuss this with Paul.

Email

This e-mail is to follow-up my phone message regarding the microchip-controlled motors we use in our mobots. We have been using motors from MotorWorks, Inc. Their quality has been consistently good, and their prices are consistent with their quality. However, their ability to deliver the motors has been unreliable, and this has caused delays in the manufacturing process.

FROM: Paul Simpson, Director of Operations

TO: You

RE: Make Verses Buy, Microchip Control

Manufacturing the motors internally would address the delivery issues and reduce manufacturing delay. Initial costs will be higher, of course, due to start-up costs, but that should balance out in about 2 years.

I'm looking forward to your recommendation. Thank you.

Decisions:

1. Create a partnership with Motorworks to reach agreement that addresses both their issues and your issues.

2. Contract with several motor suppliers. Having several suppliers will guarantee a steady supply of motors and you will no longer have to reply on Motorworks.

3. Execute an exclusive contract with you supplier. Agree to purchase parts exclusively from Motorworks in return for guarantee delivery

4. Evaluate customer satisfaction with part. Before you make any commitments, you want to make sure the customers are happy with the motors.

5. Begin building the part in-house. Paul is correct! Building the part in-house is a logical conclusion.

Email

FROM: Paul Simpson, Director of Operations

TO: General Manager

RE: Motorworks

I understand your decision. At least if we can get a clear way of moving forward and addressing the issues.

GRACE

Hey, what's that you're reading Marty?

MARTY

This are the results of the customer satisfaction survey we did last year. We did very well in some areas, but not so well in others. One of the biggest complaints for WatcherMo and SensorMo seems to be how long it takes our customers to get their mobots serviced. If we could get service people out there faster, or get them to-

My gosh, what is that thing?

GRACE

This is the secondary blade housing from the WatcherMo. I heard that service people have been fixing these pretty regularly. We're trying to figure out if can improve the housing, so it doesn't need as much service.

Watch it, that thing can take off your hand.

MARTY

Sorry, I didn't know.

GRACE

You know now.

Email

FROM: Marty Keller

TO: You

RE: Customer Satisfaction

Our latest research indicates that our customers are not always satisfied with the service for our WatcherMo and SensorMo mobots. As part of our new effort to become more strategic, I'd like to focus on this issue.

Although there are many things we need to do, we need to determine a "first step." I've developed four suggestions, and I'd be interested in your input. Which do you think is most appropriate?

In the cafeteria ………….

JACK

Oh hey Janice, did you get the time sheet data for R&D? We really need to close the books for this month.

JANIS

No, I still don't have it. They're always behind. Every month I have to beg them to provide that information.

JACK

Oh boy, those guys really need to get their priorities straight. Half the time I go over there, they're not even working on official projects. I saw this one guy, he told me he was working on a sensor that could be used in a home security system. What the heck does that have to do with mobots?

JANIS

I don't know. You know, things are just different over there.

Meeting room …….

JACK

I think we have to be realistic about this service thing. We already have serious overhead invested in providing service. We're just breaking even on service contracts.

PAUL

I have to agree with Jack. We meet every industry standard for product reliability.

MARTY

Now, wait a minute. Our customer feedback was pretty specific. Our customers don't seem to have a problem with the fact that their mobots need service. The issue is how much time it takes for the service to be completed. It's costing them money in downtime.

JANIS

We've had open positions in Service as long as I've been here. We have a lot of trouble finding qualified technicians.

GRACE

We've been tracking service calls, and we've noticed a trend. Some of the parts are wearing out regularly. We could probably work on improving those parts, and reducing the number of service calls. But, of course, that would take time. And money.

What do you think?

On the TV

NEWS ANNOUNCER

Administration officials refused comment on how so many cats had managed to sneak into the Rose Garden. In business news, the mobot industry is enjoying a surge in popularity, with demand for the robotic lawn mowers often outstripping production. Many mobot manufacturers are focusing their efforts on increasing capacity to meet the growing demand.

In your office .

GRACE

I've had a lot of complaints lately about the way we get work done in R&D. Before we were acquired by VTI, it was standard practice that R&D people could spend up to 15% of their time on independent projects. It's a model that's worked really well in other organizations. The end result is that we get a lot of innovative ideas that we wouldn't get otherwise. Now, I understand that things have changed since the acquisition. We've become more focused, right? So, if you think it's time we changed things, well, just let me know.

What actions will you take?

Please write down your decision and rationale

Video Phone from Angela

ANGELA

I'm glad to see you're making progress on your strategy implementation. I think you need to begin looking at the way your business unit is organized. However, I think you should start small. I'd like you to evaluate the way your Sales and Marketing department is set up. I'm not necessarily suggesting that you change anything. Sales and Marketing may be set up just fine. But if you think changes are appropriate, I'd be interested in hearing about it. I'm looking forward to hearing your recommendation. Have a good day.

What are your recommendations?

Please write down you recommendations and rationale for each one!

Video Phone

ANGELA

Good Morning! Today marks the beginning of your second year as General Manager of VTI's mobotics division. I know you have a staff meeting today. I have three initiatives I'd like you to consider for this year. They're all important, but I'd like you to choose one as your top priority for this year. I've sent the initiatives to you via e-mail. Take a look, and please discuss them with your staff. Good luck!

Email

FROM: Angela Connors

TO: you

RE: Year Two Initiatives

As we discussed on the phone, here are the three initiatives I'd like you to consider for this year. Please discuss with your staff and choose one as your top priority.

1. Recruiting the top talent in the industry

2. Improving internal systems and processes

3. Gathering and distributing customer data

Lunchroom ……………

MARTY

Why is everyone always working in the lunchroom? Doesn't anybody ever eat in here?

JANIS

I have all these Human Resources projections to do for Paul's capacity expansion project. He has this aggressive plan to increase the number of mobots we make each month. Some of these changes are pretty extreme.

MARTY

What? We haven't talked about any of this in the staff meetings! We haven't even finished the final projections!

JANIS

Well, you better talk to Paul, then.

Meeting Room ……………

JANIS

I think all three of the initiatives that Angela has suggested are important. It's going to be difficult to select just one priority.

MARTY

Not to me, it isn't. To me, the customer is the most important. We need to focus on improving our customer knowledge.

PAUL

I agree, the customer is most important. And customers care about getting a good product at a good price. Hey, that's basic business. That's what we should focus on.

JACK

Paul has a good point. It's time we learned to manage costs around here. Once we get that under control, then we can worry about other things.

GRACE

We're in a technology field. If we don't improve our technology, our competition is going to eat us alive. There are only so many qualified engineers out there. If they go to our competition, then what are we going to do?

1. Recruiting the top talent in the industry

2. Improving internal systems and processes

3. Gathering and distributing customer data

In the hallway …………..

JANIS

Have you spoken to Marty lately? Apparently he has a customer that's demanding we cut prices on our mobots for them. They think our prices are too high?

JACK

Cut prices on our mobots? Are they out of their minds? Why on earth would we do such a thing? We shouldn't even consider it!

JANIS

Well, the customer is MowCo, and they account for about 30% of our sales. I'd hate to see them go to one of our competitors.

JACK

Well, like I was saying, we should cut our prices for them. Anything to keep the customer happy, that's what I always say. Don't I always say that?

JANIS

No, you never say that.

JACK

Hmmf…..

On the video phone

JACK

Good morning, I have an interesting new opportunity for us. I've been in contact with the President of NewTech, a small technology firm. They've developed a new technology that will regulate the humidity inside our mobots. That means our mobots would work much better under high humidity conditions and require less maintenance. Now this is something nobody in the industry has right now. I hope we can discuss this at our next meeting.

In the hallway ………

GRACE

On your way to the meeting?

PAUL

Yeah.

GRACE

I guess Jack Kirby is a technology expert now. Since when does he bring in technology vendors?

PAUL

Well, I've heard some pretty good things about this company, NewTech. You know, I think if they can really address the humidity problem, it's worth pursuing.

GRACE

Hmmph. I never thought I'd see the day when we'd let Jack make a technology decision! This is going to be an interesting meeting!

New report on radio ………

NEWSCASTER

And now, the business news. Are you looking for good service? Well, the definition is changing. We spoke to Marty Keller, Dir. of Sales and Marketing for VTI Mobotics.

MARTY

I think the customer's definition of good service is changing, and businesses have to change along with them. We've looked at options ranging from contracting with outside service providers to stationing service personnel at the client's site to training clients to do their own service. The important thing is to understand your client's needs and discover a solution that's most appropriate to their situation.

In your office ………..

MARTY

We have a problem, and I could use some guidance. MowCo has asked us for a ten percent price break on all mobots they buy from us. As I'm sure you know, MowCo has been one of our top customers for the past few years, buying large quantities of WatcherMo and SensorMo. Their business accounts for nearly thirty percent of our total sales. We've never had a policy of offering price cuts before, but… well, with a client this big, I just assume that we're going to have to do it. We can't risk losing their business.

What do you recommend?

Please reply in writing with your recommendations and rationale

In the meeting room ……………..

JACK

This is an excellent opportunity to partner with another company. NewTech has the technology to address the humidity problem with our mobots. Nobody else has this yet.

MARTY

Actually, at least two of our competitors have been working on this. The technology isn't that new.

GRACE

Exactly. Why do we feel the need to go to some outside company to address this problem? I've had a team working on this problem for two years. Why would we want to buy some technology? We should have our own version within a year.

PAUL

I'm concerned about trying to integrate someone else's technology into our products. I'd have to completely retool the production lines.

MARTY

I think our customers would like us to solve this problem sooner rather than later. If we can address it now, let's do it now.

GRACE

OK, fine! Let's just undo two years of R&D work. Jack's the Director of Finance, for crying out loud. Why are we letting him drive this decision.

JANIS

Part of Jack's job is to determine partnership opportunities. Ok, I think we've all raised some good points here, and I think it's time we made a decision.

What action do you take?

Please write down your actions and their rationale?

In the lunchroom ………..

JANIS

Are you okay? I've never seen you look so nervous. What's going on?

MARTY

I have a meeting in fifteen minutes with the General Manager and the big boss from VTI.

JANIS

Angela Conners? Since when does she make you nervous?

MARTY

They want to talk about revising the sales force compensation. You know how hard it is to get good salespeople. They work here because the money's good. If they don't like their compensation, I don't know how we'll keep them here.

JANIS

Wow.

MARTY

Maybe you ought to join us at the meeting. After all, you'll need to be involved in any compensation decision

Please be sure to end this simulation with a one page reflective piece on any significant learning from the experience including how it does and/or does not reflect your decision style as per the assessment completed prior to the course. Include it with you responses to each simulation scenario response.

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