Rochester Manufacturing Corporation (RMC) is considering moving some of its production from traditional numerically controlled machines to a flexible manufacturing system (FMS). Its computer numerical control machines have been operating in a high-variety, low-volume manner. Machine utilization, as near as it can determine, is hovering around 10%. The machine tool salespeople and a consulting firm want to put the machines together in an FMS. They believe that a $3 million expenditure on machinery and the transfer machines will handle about 30% of RMC’s work. There will, of course, be transition and startup costs in addition to this.

Discussion Questions
1. As a production manager for RMC, what do you recommend? Why?
2. Prepare a case by a conservative plant manager for maintaining the status quo until the returns are more obvious.
3. Prepare the case for an optimistic sales manager that you should move ahead with the FMS now.