Case Study: Shell Case Fabricators
This assignment is a case study. You will be presented with information concerning a company facing a situation that requires at least one decision to be made. Read the case and using the course material and your additional research, write a short paper that briefly identifies the issues and proposes a solution that includes a justification for your choice.
This assignment considers the information provided in the Shell Case Fabricators (SCF) case. It can be found at the end of Chapter 12 of your text in the case section after the blue pages. Additional questions have been added, so please use the text only for the case material and not the assignment. To complete the assignment, follow the steps listed below:
Read the Shell Case Fabricators case at the end of Chapter 12.Create a paper responding to the following questions (ignore the questions in the textbook and only answer these questions):Consider the proposal. Should SCF accept or reject ACL’s request? If you were the project manager, which option would you select? What risks are involved with your choice and with ACL’s request?How should SCF negotiate with ACL? How can SCF and ACL develop a positive, long-range relationship? Give specifics.Would it be possible to outsource some of the project elements, and would it be ethical as this is already a subcontracted project? What other options are available that you could consider?If you were to look for another solution, what would you include in your request for proposals (RFP)?Write a three page paper in Word format. Use the American Psychological Association (APA) style (most current edition) for writing your assignment.
Case:
Case Study: Shell Case Fabricators
BACKGROUND Shell Case Fabricators (SCF) designs and builds shell casings that enclose electronic products such as calculators, cell phones, and modems. Typically the cases are plastic or plastic compounds. SCF has six different production lines that cover different types of product. For example, the largest high-volume production line for modems can produce three different colors and two models (vertical and flat). Air Connection Links (ACL) is the biggest customer that buys product from this line. This high-output line now runs at full capacity on an eight-hour shift. The other five lines run smaller quantities and tend to meet the needs of other specialty products manufactured by different, smaller firms. Ninety-five percent of SCF’s product casings line is designed by the original hardware manufacturer. Getting a casing to the production stage requires a great deal of collaboration and interaction between the original hardware and case design manufacturer (e.g., ACL) and SCF’s shell design engineers and Production Department. The latest new product of ACL is a modem designed to be used for monitoring water activity in bays, such as ship traffic, pollution, and floating debris. Because of the product’s high functionality and low cost, potential demand for the new product is out of sight. It seems every country with small bays used for shipping wants enough underwater modems to cover its respective bays.
THE UNDERWATER MODEM PROJECT At SCF each new product is assigned a project manager to coordinate and manage the shell design, budgets, and manufacturing start-up. Songsee is SCF’s star project manager and is the project manager of the shell for the new short-range, underwater acoustical modem. The shell casing for the underwater modem required special design and materials, custom equipment, and a seal to withstand pressure to 50 meters. Air Connection Links, the product owner, needs 60,000 modems in 91 days (next January 15) for the Estuary Control Institute meeting in Hong Kong. CLIENT CHANGE REQUEST Songsee has felt the project was moving along smoothly, with the exception of being two weeks behind schedule. She feels she can “lean on” the Design Department to put the project on top priority and make up the two weeks. Yesterday ACL’s project manager, Sabin, came in with a “simple change”: change the outer shell shape from rectangular to dome shape; it will improve performance 2 percent. Songsee couldn’t believe Sabin. He knows better. He knows the engineering implications, and it is NOT simple! Yet Sabin tells Songsee, “It shouldn’t cost much.” Songsee imagined a sharp retort, but she counted to five and aborted. At this late stage of the game, changes and schedule compression cost big money! Songsee said she would get together with her team and start on a new time and cost estimate that day. She told Sabin he would have to give her a written change request of the new requirements by the next day. Sabin appeared disappointed: “Why don’t we just add € 100,000 to the price and get on with it? We have been doing business with SCF for six years. With expected demand out of sight, SCF will break even quickly and have a great profit on the production side.” Songsee sighed. “Let’s proceed with the change order process. I will take your request to the change order governance committee.” Songsee’s meeting with her team about the change went about as expected. Every department moaned about changing at this late date. The guesstimate cost and time estimates were over triple Sabin’s idea of € 100,000. For example, designing a new seal for a dome-style modem will require a new custom water sealing approach, possibly an untested different sealant, and new molds. Has ACL frozen the design of the new style modem? Songsee asked the team to come in with a more detailed estimate by tomorrow afternoon, before her meeting with the change order governance committee. THE NEXT DAY (FRIDAY) Sabin called from ACL at midmorning the next day: “Our senior management is upset that we have to be so formal for such a small change. They just want to get on with the project and meet the time-to-market launch date. € 100,000 seems like a fair price. They believe you need to talk to your management. They want a response by Monday.” The team estimates came close to yesterday’s guesstimate (€ 391,000)— not good news. Songsee knew the answer of the change committee would be to hold for the full amount. She was right. The change committee believed the costs are there and need to be covered to meet the launch date. The committee was also concerned that priorities and resource scheduling would have to change for SCF’s Design and Production Departments. In three hours she would meet with senior management to decide to accept the client’s request at their price or come up with an alternate plan. Songsee realized she should have several options for senior management to consider, along with a recommendation.
Larson, Erik. Project Management: The Managerial Process (p. 462). McGraw-Hill Higher Education. Kindle Edition.