The case is about a conversation between Jorge Gonzales, the CEO from Taracare Inc., and his manufacturing manager Alfredo Diaz. Alfredo was hired because Taracare was having difficulties in meeting the deliveries and in quality. After some time and only making little progress, Alfred scheduled a meeting with Jorge to discuss the problems. The main points Alfredo concerns was: Problems with Purchasing materials
Delivery promises from the sales that can´t be meet
New designs, which are nearly impossible to produce and at least the costs are increasing. Equipment utilization is too low
When increasing the equipment utilization they have too much capital tied up in inventory Alfredo thinks the main problem is that he is getting too less support and there is no communication and cooperation between the different departments. Jorge leaves the meeting without saying anything to the problems Alfredo mentioned. He just says that Alfredo has some good points but they are no worse than those of the competitors. At the end he wants Alfredo to send him a memo, so that he maybe call a meeting where they can discuss these issues with the other department heads.
At first it looks like outdoor furniture and replacement windows have very little in common. It looks like Jorge made a mistake in hiring a new manufacturing manager without the proper qualifications in this branch of industry. BUT Alfredo already knows how to run a manufacturing facility. He proved that in his previous position. The tasks of managing a manufacturing facility are the same and don’t depends too much on the products which are made. He only needs some time to get used to the different manufacturing processes. And in both products are similar raw materials, such as aluminum, glass and wood. So he already knows the processes to handle these raw materials and just needs the knowledge to assemble the parts which are not so different from his previous work. Finally, both products are sold to similar customers. So it appears that Alfredo’s previous experience how to run a manufacturing facility and handling similar raw materials does qualify him for the position at Taracare.
It is obvious that the main problem in Taracare is the missing cooperation and communication between the departments. The goals from the different departments are often not the same. And often they are in a conflict to each other. They should think about what they want to achieve and how to lead Taracare. Jorge should also immediately call a meeting with the department heads, so that they can see all the problems from different point of views and so that they are all on the same level of knowledge. After that they have to search for the reason of the problems and where the problems are coming from. They have to work together to find solutions. It should be easier if they hold the meetings from here on between only two departments.
This gives more space for specific discussions. So the meeting regarding low equipment utilization should be held together with the finance and accounting department because it applies to both departments at the same time. Like I mentioned earlier they have different goals. So the accounting department wants high equipment utilization, the financial department on the other hand wants low inventory stock. Jorge should be present during these meetings as an objective person. Because in the end he has to make sure the decisions have the ambition of an efficient workflow for the whole company and not just for the single departments. When solutions are founded and Jorge decided what to do, each department need some measures to solve the problems within their departments. When the main Problems are solved there should be meetings frequently between the departments. If it is necessary there should be a person who can oversee all departments, so that the communication and cooperation between the departments are improving. This can be Jorge himself, a new employee or someone from the department heads. At the beginning the frequency of each meeting should be higher so that they can see their improving process. Read eliminate the middleman case study solution
Specific problems between…
manufacturing and purchasing department:
Before changing materials meet up with Alfredo to clear doubts and check for possible problems occurring due to the new material in the manufacturing process. The purchase of the new paint should be reconsidered due to Alfredos information about requiring a thicker coatin, by calculating price per m² of coating instead of price per gallon.
manufacturing and design department:
New designs have to be checked for producibility and production costs before making it a final product. If possible new designs should include parts which are already produced or are at least similar to make sure they can be manufactured with the available equipment.
manufacturing and accounting and financial department:
manufacturing and sales department:
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