02 June 2014
Week 2 Case Analysis
•A summary of the major facts surrounding the case
The major factors in this case are that Ted was going through a hard time in his career due to managing his recently supply department at his job with multiple sub-departments within. Because he was getting a good salary, returns expected from upper management was high. In order to maintain and improve satisfactory numbers, Ted needed to maintain a staff that is skilled, experienced and satisfied in their jobs. Unfortunately, so much was required of each employee it didn’t seem worth it as salaries were low.
As a result, people were leaving to other companies that could pay more for their hard labor. The budget cuts on the supply department made it difficult for standards and quality to be maintained, yet higher management was coming down on Ted’s because his department was not ...view middle of the document...
Additional issues involved miscommunication with the cost to purchase machinery for more efficient productivity in the maintenance department. For example, quotes were being made for new machinery cost estimate of 5.5 million dollars and the actual starting cost was 7.2 million dollars. Lastly, upper management was coming down on him for results and other departments were complaining about the supplies based on availability and quality without knowing what has led to the decreasingly poor outcome.
•List several possible alternatives that Eagle Mfg. can employ to resolve the problem and discuss the advantages and disadvantages of each.
Eagle manufacturing must expect less quality products with a budget cut leading to less money to spend on supplies for the business. However, the company should look into other departments that may not need all the employees they have on staff and reduce those numbers. This will allow the companies the ability to purchase better supplies as these products are clearly critical to the business. Another thing they should look into which hardly ever gets looked into is cutting a bit off the high salaries some of the seniors may be getting. If there is a bonus program, temporarily stopping it until things get better for business across the board.
Furthermore, the corporation may not be spending its money wisely as they are trying to purchase a robot that costs millions of dollars. I believe they should delay that for right now as it will take many years for the company to get what they’ve invested in this piece of equipment. In addition, that robot may need maintenance that will add additional cost if it’s not included in the initial cost. Just a portion of that money could be put back into quality supplies improving everything that was affected by it. A down side to that is competing companies may purchase a robot and increase productivity which would put them ahead of Eagle manufacturing. Another down side is that the cost of the robot could increase when they are ready to purchase later on or the price could drop as well.