Problem:
Toys, Inc is a 20 year old company engaged in the manufacture and sale of toys and board games. The company has built a reputation on quality and innovation. Although the company is one of the leaders in the field, sales have leveled off in recent years. For the most recent six month perod, sales actually declined compared with the same period last year.
The production manager Ed Murphy attributed the lack of sales growth to the economy. He was prompted to undertake a number of belt tightening moves that included cuts in production costs and layoffs in the desgin and product development departments. "Although profits are still flat, he believes that within the nexct six monts , the result of his decision wil be reflected in increased profits.
The vice president of sales, Joe Martin, has been concerned with customer complainst about the company's realistic line of working model factories, farms, and service stations. The moving parts on certain models have become disengtaged and fail to operate or operate erratically. His assistant, Keaith McNally, has proposed a trade in program by which customers could replace malfunctioning modles with new ones. McNally believes that this will demonstrate goodwill and appease dissatisfied customers ..hne also proposed rebuilding the trade ins and selling them at discounted prices in the company's retail outlet store. He doesn't think that this will take away from sales of new models.
Under McNally's program, no new staff would be needed. Regular workers would perform needed repairs during periods of seasonal slowdowns, thus keeping production levels
When Steve Bukowski, a production assistant, heard Keiths proposal, he said that a better option would be to increase inspection of finished models before they were shipped. With 100 percent inspection, we can weed out any defective models and avoid the problem entirely.
Take the role of a consultant who has been called in for advice by the company president, Marybeth Corbella. What do you recommend?