Case $3-2$

Capacity Concerns

Bentley Hamilton throws the business section of The New York Times onto the conference room table and watches as his associates jolt upright in their overstuffed chairs.

Mr$.$ Hamilton wants to make a point.

He throws the front page of the The Wall Street Journal on top of The New York Times and watches as his associates widen their eyes onee heavy with boredom.

Mr$.$ Hamilton wants to m$$ke a big point.

He then throws the front page of the Financial Times on top of the newspaper pile and watches as his associates dab the fine beads of sweat off their brows.

Mr$.$ Hamilton wants his point indelibly etched into his associanes' minds.

"I have just presented you with three leading financial newspapers carrying today's top business story," Mr$.$ Hamilton declares in a tight, angry voice. $"$My dear associates, our company is going to hell in a hand basket! Shall I read you the headlines? From The New York Times, 'CommuniCorp stock drops to lowest in $52$ weeks.$\text{'}$ From The Wall Street Journal, 'CommuniCorp loses $25$ percent of the wireless router market in only cone year.$\text{'}Oh,$ and my favorite, from the Financial Times, 'CommuniCorp cannot CommuniCate: CommuniCorp stock drops because of internal communications disarray:$\text{'}$ How did our company fall into such dire straits?"

Mr$.$ Hamilton next points at a line sloping slightly upward on the conference room display. "This is a graph of our productivity ever the last $12$ months. As you can see from the graph, productivity in our router production facility has increased steadily over the las year. Clearly, productivity is not the cause of our problem."

Mr$.$ Hamilton next displays a second graph showing a line lloping steeply upward. "This is a graph of our missed or late iders over the last $12$ months." Mr$.$ Hamilton hears an audible posp from his associates. $"$As you can see from the graph, our

missed or late orders have increased steadily and significantly over the past $12$ months. I think this trend explains why we have been losing market share, causing our stock to drop to its lowest level in $52$ weeks. We have angered and lost the business of retailers, our customers who depend upon on$-$time deliveries to meet the demand of consumers."

"Why have we missed our delivery dates when our productivity level should have allowed us to fill all orders?" Mr$.$ Hamilton asks. "I called several departments to ask this question."

$"$It turns out that we have been producing routers for the hell of it$!"$ Mr$.$ Hamilton says in disbelief. "The marketing and sales departments do not communicate with the manufacturing department, so manufacturing executives do not know what routers to produce to fill orders. The manufacturing executives want to keep the plant running, so they produce routers regardless of whether the routers have been ordered. Finished routers are sent to the warehouse, but marketing and sales executives do not know the number and styles of routers in the warehouse. They try to communicate with warehouse executives to determine if the routers in inventory can fill the orders, but they rarely receive answers to their questions."

Mr$.$ Hamilton pauses and looks directly at his associates. "Ladies and gentlemen, it seems to me that we have a serious internal communications problem. I intend to correct this problem immediately. I want to begin by installing a companywide computer network to ensure that all departments have access to critical documents and are able to communicate with each other more easily. Because this intranet will represent a large change from the current communications infrastructure, I expect some bugs in the system and some resistance from employees. I therefore want to phase in the installation of the intranet."

Mr$.$ Hamilton passes the following time line and requirements chart to his associates $($IN $=$ intranet$).$