2001 Victor E. Sower, Ph.D., C.Q.E.
Hi-Ho Yo-Yo, Inc.
Assignment 1
Your boss, Anne Carroll, has just returned from the June high level planning meeting with John Cooper, Juan Martinez, and Mary Pat Walker. You are on your way to a meeting called by Anne. You are the last to arrive at the conference room and by tradition that means that you make the coffee. The other attendees are Jeff Baker, Allen Hayes, Katy Bent, the Production Control Manager reporting to Jeff, and Sara Chen.
Anne opens the meeting as you deliver coffee to the attendees. “I just came from the sales-order planning meeting with John Cooper. Allen and Sarah were also in that meeting. In the meeting Mary Pat Walker provided us with the new forecast for the remainder of 2005. It is a very aggressive forecast. Mary Pat reported that actual sales for the past couple of months have set records. Based on April and May sales she believes that she has finally lit a fire under the sales force and intends to keep feeding that fire for the rest of the year. There was some rather heated discussion in that meeting (Allen and Sarah glance knowingly at each other)—well let’s just say that we had to temporarily adjourn the meeting until next week.”
“I have a big problem with the forecast we received,” said Allen. “Based on this forecast we will have to dramatically increase our purchases of raw materials—beyond the limits of blanket orders already in place for this year. I think our suppliers will be able to meet the added demand, but frankly I don’t believe the forecast. I think we will be stuck with excess inventory if we buy to this forecast. And we all know how Juan has been on our backs lately about the need to reduce inventory levels.”
Sarah chimed in, “I share Allen’s concerns. Based on this forecast, we will either need to hire additional workers, or notify our existing workers about the need to schedule overtime. I don’t want to see us get into a hire-layoff or an overtime-slacktime situation.”
Jeff, never one to mince words, offers “Mary Pat couldn’t forecast her way out of a paper bag if the bag was soaking wet. She lives in a dream world. If we work to this forecast we’ll have excess @#%& all over the factory floor! We go through this time after time. Any correlation between the forecast and actual sales is purely coincidental! She gets these pie-in-the-sky numbers from Robbie Knoght. He and I go toe to toe about this on a regular basis! He...”
Anne cuts him off. “I think we all get your point, Jeff. It would help if you would be a little less reserved and open up more when you have an opinion.” Everyone laughs, the tension broken a little. Anne shifts her gaze from Jeff to you. “You are the newest member of the staff. This gives you a fresh and unbiased perspective on this problem. I know that you are working on your MBA which provides you with more current technical insight than the rest of us. For the next 4-5 weeks I’d like you to report directly to me as an Internal Consultant and this will be your first project. Take a look at the forecast information that I collected in an Excel file. Remember at this stage in our planning process we work with aggregate units, so don’t get bogged down with too much detail. Analyze our situation and provide me with the ammunition I need to take to next week’s meeting. My objective is to have a sound proposal backed up by good data and accurate analysis so that we can avoid another confrontational meeting. Make sure that you provide me with enough detail so that I can address any questions that might arise in the meeting. Because of the danger of another confrontation, I think it best that you not attend and present the report yourself. I’ll have to go it alone with your report to guide me. I’m counting on you. By the way, you make a good pot of coffee. We may need to change the rule so that the junior staff member always makes the coffee.” Everyone laughed at that and the meeting quickly adjourned.
You pick up the Excel data and head back to your office. You pick up your operations management text and silently make a note to send an e-mail to your old professor thanking him for telling you not to sell the book at the end of the semester. You have heard that Anne is a no-nonsense manager. She does not like reports with a lot of fluff and philosophical meanderings in them. She likes reports to be direct and in terms she can understand. She insists that enough detail be provided in the report that she can understand all the ins and outs of the analysis underlying the recommendation. With that in mind you take your PC off sleep-mode, refresh your cup of coffee, and dig in.