Dynamic Tools, Inc. is a multi-division manufacturing company with diversified products serving the aerospace, automotive, construction markets. Its automotive tool division is located in the Southwest and has a plant with over 1,500 employees. It sells various automotive tools and testing equipment to private, corporate, and dealership repair facilities.Dynamic is a market leader, and its business is steady. It has a solid reputation and commands a premium price for products.The automotive tool division, however, is not growing as fast as the rest of the Dynamic divisions, or as fast as the board of directors think it should. They feel the division’s management is complacent.Several new competitors are entering the market with products that have more features and lower prices. Last year, the CEO told Avi, general manager of the automotive tool division, that he had to start developing new, enhanced products to maintain market shares against emerging competitors.

 

Avi worked his entire 20-year career in the division; and is an engineer who worked on many of the current products. He believes they are still quality products.  Avi believes, though, that the marketing department needs to do a better job.  Avi also believes that the manufacturing department can reduce costs.  Because of those beliefs, Avi is not convinced that he need allocate more resources to product development.  By maintaining the current allocations, Avi hopes to maintain the division’s profit margin, which directly affects year-end bonuses.

 

Avi’s approach is to establish four product development teams, which will each focus on a single product threatened by competition.  The goal of the teams is to develop enhancements that would match or beat the competing products. Teams are encouraged to be competitive, but do not necessarily have the skills for the project.The four department managers are:

 

• Marjory—Manager, Marketing
• Reginald—Manager, Electronic Engineering
• Tabitha—Manager, Computer Systems Engineering
• Antoine—Manager, Manufacturing

 

Aviprovides the annual performance review for the department managers, asking them to provide a status on the product development projects. Here is what each of them told him:

 

Marjory, manager of marketing, provided these thoughts:

 

• no managers, including Avi, are giving priority to the product development projects because they are too busy with their regular work.
• product development efforts should be market-driven, not engineering-driven
• other product development teams led by Reginald and Tabitha are not interested in any input from the Marketing Department; they just want to develop highly sophisticated, over-engineered products that will be too complicated for customers to use
• Antoine is only interested in how to make the new products cheaper, not necessarily better, because he thinks that a lower manufacturing cost per unit is the ultimate goal.
• Avineeds to approve a new position of product development manager, who should report directly to her and would have full responsibility for all product development projects
• several key people from each of the other departments should be permanently reassigned to the product development manager to work solely on product development projects
• the other three department managers seem to side with each other against her because she is a woman and has only been with the division a short time
• if Avi does not approve hiring a product development manager who would report to her, Marjory would seriously have to reconsider her interest in staying at Dynamic Tools, Inc. She has an excellent reputation in the industry; many other companies would welcome her. Avi knows that it took him a while to fill the marketing manager position, and he had had to pay a higher salary than he had wanted to get Marjory to come to Dynamic.

 

Reginald, manager of electronic engineering, provided these thoughts:

• product development projects are not progressing because the computer systems engineering department is always fighting among themselves about whether product features should be done with hardware or software
• Tabitha has already announced that she intends to retire at the end of the year;when Tabitha retires, she should not be replaced; rather, the computer systems engineering department should be merged into Reginald’s department, to allow better control over the product development projects
• product development projectsshould be led by engineering because all product enhancements require engineering and design expertise
• marketing or manufacturing do not need to be involved: marketing’s job is to sell the products engineering develops, and it’s manufacturing’s job to make the products the way engineering designs them
• by not replacing Tabitha, Avi can make up some of the money paid for the “overpriced” marketing manager

 

Tabitha, manager of computer systems engineering, provided these thoughts:

 

• upon evaluation of the competitors’ products, she noted the big difference is their products are software based whereas Dynamic’s products are model based, as they have been for years
• years ago both of them engineered those automotive tools and today it is a different environment, with new technologies and approaches, and Dynamic has to redesign its products to be software-based
• when she retires at the end of the year, Avi should appoint Nicole as the new manager of the computer systems engineering department. Tabitha believes that Nicole is young, bright, knows software design better than anyone in her department, and could do a great job in leading the product development projects. She has a master’s degree in computer engineering and an MBA. She is interested in having Dynamic’s products meet customers’ needs. Nicole frequently has discussions with Marjory about marketing and customers and competitors. Tabitha told Avi that if Nicole is not promoted, she would most likely leave Dynamic and go to another company, where her talents might be better utilized.

 

Antoine, manager of manufacturing, provided these thoughts:

 

• Avi needs to get more involved in the product development projects and be a more assertive manager
• Marketing,Reginald, and Tabitha are trying to make too many changes to the products that will increase prices and reduce the profits
• the other managers have no concern for costs or any manufacturing process changes that would have to be made
• there should be regular product development status meetings to find out what is “really” going on and see all the “politics.”
• other department managers care only about their own department looking good, and they are not willing to share information or cooperate with the other teams
• all the product development teams are suffering
• what started out as a friendly rivalry among the teams has turned into outright nasty competition.
• Avineeds to act before it begins to drag down the corporation’s overall profitability and the CEO has all their jobs or even recommends selling the division to a competitor

 

Finally, the CEO calls Avi to a meeting and tells him that the latest marketing report shows the automotive tool division lost market shares for the second consecutive quarter.  The CEO would like to know why there are no new product enhancements yet. Avi admitted that he has not been on top of the product development efforts and has not given them the priority that he should.Avi discussed his approach to establishing the product development teams, and shared the feedback from his department managers.

 

The CEO told Avi that the situation is critical, and the board of directors is losing patience. When the board hired him last year, they expected him to move Dynamic from a good national company to a great global one, and that all the other divisions are moving in that direction while the automotive tools division is staying flat in spite of an increasing global market for their products.The CEO then informs Avi that he is going to bring in a management consultant to evaluate the automotive tool division and make recommendations about how to get the product development effort organized and on an accelerated track.

 

• How would you initiate your assignment with Avi and the department managers?
• Develop a list of questions you would ask each manager.
• What recommendations would you make, including any changes to the organizational structure, to improve the management of product development projects?
• What guidelines would you recommend for how the departments or new function teams should work together on product development projects?

 

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