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Deciding on a shop-floor system for producing the Microsoft Xbox. What actions should McCluster take to reach a decision? Why should he take those decisions? Its Decision time Flextronics prides in a work culture that values fast and very decisive actions. Jim McCusker is at the epicenter of a task conflict. This group decision-making process of choosing a shop floor system has to be completed and fast.
Time is running out and the geographical distance between the locations is a challenge. Bringing all parties together through teleconferencing offers him a great way forward. Datasweep Software shop floor system is the best alternative. The Best Approach Since all the players have seemingly good reasons as to why they prefer each system currently in use, McCluster should involve the company CEO, Michael Marks in convincing Humphrey Porter and his team to adopt the Datasweep Software.
He needs to involve his line managers in getting Marks to personally communicate this decision to Porter and his European team. This shall guarantee the authority, credibility and allow for speedy execution of the task. It is March, and McCluster needs to have ensured that the Xbox video game console is in the retailers’ shelves by October in readiness for the holiday season. At stake is a key customer that is increasingly getting impatient with an earlier arrangement to have a product ready on time.
Decision; Install Datasweep System in Hungary and Train the Engineers there Given the existing scenarios today and the weight of the decision to be made, McCluster should move with speed to have the Datasweep system installed in Hungary as well, so that the entire company have a uniform floor system not only for Microsoft’s immediate needs but also for future global business competitiveness. The ensuing discussion is my analysis as to why I am convinced this is the best alternative to pursue. However, in making and communicating this decision, McCluster has no alternative but to involve all the key players from Matt Ryan in Mexico, Humphrey Porter in Hungary, Michael McNamara, Bob Dykes and at the very apex of the team, Michael Marks through teleconferencing preferably at Mark’s office in California. He could also bring on board Hungary engineers who will be trained immediately to be ready for the Xbox assignment. Hearing from the CEO would probably help soften their hard stance on Datasweep. He, however, needs to keep Microsoft out of this but assure them of progress.
The other available options present equally good prospects for the firm in terms of future business; nevertheless, the benefits of installing a Datasweep in Hungary far more outweigh the disadvantages. Involving the CEO, Michael Marks would to a larger degree guarantee acceptance of the decision. Furthermore, it would make it easy to convince Humphrey Porter and his team of engineers in Sarvar, Hungary, that indeed this is a move in the right direction. It’s worth noting that Porter, as head of the European operations, is not keen on switching from Virtual Factory System, but can do so if the change is mandated by Marks.
This would obviously give McCluster the necessary impetus to proceed with speed to ensure that the customer’s product specifications are met as was spelled out in the bid contract. Why Datasweep for the whole company? Customer Loyalty threatened; The interest of an extraordinary customer is at stake. Insist on the status quo and you risk losing big time. Few organizations and indeed few people prefer an almost complete overhaul of a system. People prefer the status quo. In my view, this is what is facing Flextronics especially the Hungarian unit.
They have to be flexible and opt for more difficult decisions even if it appears easier ones are available. Strategy change in this sense, switching to the Datasweep system as is already the case in Mexico, would not only help cut costs in the long run but will also go a long way in meeting the customer specifications while ensuring on-time delivery of the ordered product. The potential business loss to some qualified competitors like Solectron and Celestica is a gamble that Flextronics cannot afford at this juncture. A difficult and a more radical choice needs to be made urgently.
Virtual Factory Design Pitfalls; This system is actually an original design of a large medical design customer. Though cheap and effective, it is not scalable in its current form and untested, only in a few engineers’ minds as opposed to Datasweep which is widely tried and tested. This puts its ability to doubt for the task at hand and in the future. Moreover, its credibility is not anywhere out of Hungary yet Flextronics wants to globalize its operations. Moreover, it has never been used elsewhere thus uncertainty regarding the clear transition in case it’s to be installed in Mexico.
Given that time is of the essence and the Hungarian engineers are more experienced, I feel they can be easily trained on Datasweep as opposed to training the Mexican ones on Virtual Factory. They are young and are already able to use the Datasweep. Cost Saving Advantages; By virtue of having successfully tested and installed the Datasweep software in Guadalajara, it is only logical to proceed and do so in Hungary not just for the eventual satisfaction of the customer but for the long run cost benefits and opportunities for future business.
Building the single system for the production of Xbox at the same time both in Hungary and Guadalajara would first of all capitalize on the gains from the Microsoft business and also serve both the needs of the North America and European populations in the most cost-effective manner. According to McNamara, “if we had to airship the product to the final destination, that could tack on $25-$30 per box and dramatically reduce both parties abilities to make any profit. Building Business Trust; Flextronics ended up winning the supplied bid because of intense lobbying prior to the announcement against a backdrop of very stiff competition from even better-qualified suppliers. This was so due to trust developed in other earlier transactions. Failure to deliver a product as agreed in the contract will strain the relationship and most likely risk future beneficial business relationships with Microsoft and other big corporations like Motorola, Nokia, and Hewlett-Packard that form part of its customer base.
Company Policy Enhancement; The Flextronics company is an extremely customer focused company and approaching Microsoft to renegotiate the contract would be tantamount to admitting inability to deliver. The fact that it had little experience in personal computers compared to competition at bidding, but its futuristic positioning convinced Microsoft to award them the business, needs a proof. What an opportunity to prove their customer focus policy! Future Business Interests; Datasweep in my view offers a stable foundation for future business operations of such kind given the untested nature of Virtual Factory. In addition, the simultaneous use of the two systems or Portal approach may mean incapability to demonstrate a solid system infrastructure platform as was initially negotiated. McCluster has his work cut out. Bring all the players to Mark’s table for the adoption of Datasweep and eventually roll out the project. Interestingly, Bob Dykes, at the bid award did show and commit that they would be able to install Datasweep as a credible solution . Time is slipping by.