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.
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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 Greenwood’s objectives when he ran the
company?
Bob seems to be an enthusiast who derives satisfaction from the incorporation of
novel technology in the company’s 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 Bob’s 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
New
technologies
Marketing
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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.
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The quality of the products is also briefly mentioned, as is product reliability. The
market manager therefore requires.
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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.
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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.
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Product
Development
Production
The flexibility
to adapt to a
fast changing
market
Marketing
4