Cause of the Downgrade of Manifolds
Cause of the downgrade of Manifolds
Class II products
Products that have the potential of becoming world-class, meaning having costs 5% to 15% higher than competitors costs, were classified as Class II products. Management would have to watch those products closely for improvement and deterioration. In the initial study, manifolds fell into Class II; however, in the 1990 model year budget they were downgraded to Class III and identified as candidates for outsourcing.
The budgeted unit costs include overhead applied to products as a percent of direct labor dollar cost. The overhead rate is 435% of direct labor dollar cost.
Assume that you enter the picture at the same time the companys manifold product has been downgraded.
Your assignment is to help Bridgeton management understand the cause of the downgrade. Then you must put them on a path to make a well-informed decision about the future of the product, given their alternatives, priorities, and constraints.
You enter into the Bridgeton case as an outside consultant, not a manager. You cannot impose your will; instead you have to convince decision makers to follow you.
Your Bridgeton audience:
You should assume that your Bridgeton audience is made up of interested management and labor representatives. Everyone in your audience has played some role in the decision process up to this point, some making the decisions, some trying to implement them. It is likely that each person is strongly anchored in his or her individual opinions by now. Since you are an outsider, they might be inclined to discount what you say. However sound your thinking is, you still have to secure their confidence.