Shell Case Fabricator Case Study

Shell Case Fabricator Case Study

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Shell Case Fabricator Case Study

Shell Case Fabricators should reject the Air Connection Links request due to various risks that are involved. Firstly, as indicated by Songsee, underwater modem project was two weeks behind the planned schedule. Thus, it would be nearly impossible to implement any changes as indicated. This would be especially hard because it involved changing the overall design of the modem from rectangular to dome-shaped. Secondly, this reason also leads to engineering implications in terms of costs (Larson& Gray, 2014). This implication would interfere with the budgeted cost of the work scheduled as the change was not included when the p[project budget was drafted. Another implication is the amount of finances required for the change to be made which are threefold of the estimated amount suggested by Sabin. Additionally, another implication would be creation of a small cost variance, which implies minimal profits as the actual cost larger with the inclusion of the finances spent on fulfilling ACL’s request (Larson& Gray, 2014). Thirdly, according to Sabin, implementation of this change would translate to fewer profits as compared to the overall profits that SCF would reap with the increased demand of the modems. However, after the meeting with her team, the estimated costs would be threefold of the guesstimate suggested by Sabin to implement the change.

Based on the explanation above, the preferred option would be rejecting ACL’s request and manufacturing the product as designed in the project blue prints. The primary risk would be that the product would be less effective by 2% compared to its dome-shaped counterpart (Larson& Gray, 2014). The second risks would be BCWP which is also known as earned value as the product manufactured would perform lesser than its dome shaped counterpart hence implying optimal demand rather than the expected out of sight demand. This result would also imply reduced schedule performance index (SPI) as the earned value would be lesser that reducing the ratio between this value and the planned value (Larson& Gray, 2014). The effect also applies for the cost performance index as the ratio between the earned value and actual cost would be less for the rectangular shaped underwater modem. Seemingly, production of the rectangular modem as opposed to the dome shaped one would be advantageous to SCF in cutting costs for production.

It would be wise for SCF to negotiate with ACL in terms of the production of the modem and the request made concerning modem shape change. This is due to the long business relationship the two companies have fostered for the past six years. Failure to initiate negotiation might cost SCF the project all together hence the importance for this activity to be conducted. In order for SCF to maintain its relationship with ACL, the first step would be enhancing the communication. This means ensuring regular communication is done (Larson& Gray, 2014). For instance, Songsee should communicate with ACL management on the costs implications of the change implementation and the subsequent risks and difficulties that might arise. The second step would be increasing value addition to ACL as a contractor in shell case manufacturing. This translates to ensuring relevant and resourceful information shared with ACL pertaining to the varied projects. Case in point, Songsee and her team can update ACL management on other options that might be implemented to ensure that the underwater modem purchase power is higher even without the modem shape change (Larson& Gray, 2014). Deadlines are important in all projects especially in fulfilling contract requirements. With this in mind, SCF should strive to meet the stated deadlines by ACL in manufacturing of the shell cases for the modem. This will indicate commitment hence enhance trust and foster a long-range relationship between the two companies.

References

Larson, E., & Gray, C. (2014). Project management: The managerial process (6th ed.). New York, NY: McGraw-Hill Education.