Case Study on "Black Diamond Case Raises"

Case Study 10 pages (2537 words) Sources: 0

[EXCERPT] . . . .

Black Diamond case raises a number of issue about design, manufacturing, and taking the necessary lead time to make certain that a product meets all specifications and can be manufactured safely. The dilemma facing the production team currently is that a new product, the Black Prophet axe designed for climbing, failed a customer, raising the spectre of mass recalls and a decline in sales, as well as a blot on the reputation of the company and diminished growth in the future. To address this issue, questions are being raised about the time given to development of the product, the speed with which it was rushed through for manufacture, and possible flaws that might have been introduced by a too-rapid run-up to the market.

Initial Analysis

The analysis of the issue performed by the company includes a consideration first of the history of the market and of the place of the company in that market, the nature of the retail end of the business, the customer base that has been served to date, areas of growth for the business, and the nature of the competition at both the retail and wholesale levels. The competitive environment may be a contributing factor but is clearly not at fault for the situation, though the way the company has reacted to the competitive environment might be at fault. For instance, if the company has shortened its production and testing time because of a perception that the competition might get there first, and if this resulted in an unsafe product, then it is the company that is at fault for not exercising proper caution. The analysis next considers the manufacturing systems and processes of the company and how these were played out in developing the Black Prophet to see if too many corners were cut or if some error seeped into the process in this particular case.

The most important thing stated at the initial meeting on this issue was that not enough data was known to make a proper decision about what caused the problem, and perhaps even as to what the problem really might be. The problem could be a failure of the product itself, it could be mishandling of the product, it could be a failure in the materials, it could be a failure in design, and so on. It should be obvious that more data is needed before an answer can be found and before any procedural change can be made, and a search for that data is therefore the first step.

The Black Prophet

Skipping ahead for the moment, the analysis included the specific of the design and production of the axe that is at the center of this issue, the Black Prophet, originally proposed as a product to round out the company's product line of axes. The company produces two other axes, one a glacier-walking and snow-climbing axe, and another axe for both snow and ice climbing. The Black Prophet was designed for ice climbing with a new ergonomic shape to reduce arm fatigue. The shaft has a more gripable covering, and the axe offers interchangeable modular components to allow for the use of different types of tools for different applications. The design of the product took several years of work with different vendors to develop the appropriate production process for each component. A prototype was designed and field tested until a specific configuration was chosen, and this was then reviewed by the sales department, mountaineering experts, and other members of the company. If the tool was rejected at any of the quarterly meetings, R&D would undertake a new phase of development and field testing.

This method of development appears thorough and brings in the expertise of different departments and different fields, and so the finished product should be considered well-tested and closely examined by those who need to have input on such a design. The Black Prophet involves five parts, the shaft, the head, the hammer, the pick, and the adze. Different production methods were involved because of the different materials for each part. Metal casting produced three of the parts, and the composite shaft was produced by a composite and bonding manufacturer. Black Diamond manufactured the pick section, and when the other parts were delivered, Black Diamond assembled the whole. The unit casts about $80 to produce and sells for $200 retail and $140 wholesale. Sales projections were at 2500 units per year. The company thought that the product would be one of its top ten selling winter products. The product was also seen as an important image item for the mountaineering market. The company had received good response from the outdoor show the ye4ar before, and it was evident at that time that there was no other axe on the market like it.

The Market Environment

The analysis of the market showed the size of the market and the way safety and higher-performing tools have become priorities. The analysis also shows the way Black Diamond has grown and the size of its market share. The concern now is that the market share cold erode if the current problem is not addressed properly, and this is what the meetings have been about and what the solution will have to address.

The market has become international, w2ith Eruopean manufacters having a significant share and with Korea and Japan also taking on manufacturing duties for the market. Black Diamond has had the mission of designing and manufacturing "innovative and technical products of high quality, high performance, and exemplary durability that are targeted toward our primary customers - climbers and backcountry skiers." The company has made its reputation a central matter in its marketing, which makes protecting that reputation all the more important in the current crisis. A company virtually always stands or falls on the basis of its reputation, but this is even more vital when that reputation assures quality and safety.

The company moved in 1991 from Ventura, California to Salt Lake City, Utah to be closer to its customer base. The company has continued to innovate and to use the latest technology, including two CNC machines that are programmable machine tools to produce small to medium-sized batches of intricate parts. The intent was to reduce costs while moving more production processes in-house. These expensive machines provide advantages of capacity and product flexibility. At the same time, many of the products required machinery that was too expensive for the company to justify, so those manufacturing elements were out-sourced to other vendors, such as was done with most of the parts for the Black Prophet.

Organizational Considerations

The purchasing cycle for products follows a pattern and begins with a request from within the company to purchase material, equipment, supplies, or other items from outside the organization. The cycle ends when the purchasing department is satisfied that a shipment has been received in satisfactory condition. However, the cycle can be ongoing to provide the necessary raw materials for manufacturing over time, depending on the production schedule and the long-term need as well as on changes in product demand.

Market forecasts are used to determine the need for a product and so to estimate the number to be produced. This has an effect on the inventory levels both of raw materials to be used in the manufacturing process and on the number of units to be produced and stored until they are shipped. Demand is governed by randomness to a degree, which is why market forecasts are so important in determining the amount of product to be produced and thus the inventory of raw materials and completed units alike.

Project management techniques differ from management techniques of a more traditional form in that they have a limited time framework, and this gives rise to a host of unique problems as well as certain benefits. Projects pass through a series of stages that can be considered a life cycle, and these include project planning, execution of major activities, and project phaseout. Projects bring together people with diverse knowledge and skills, and most remain associated with the project for less than its full life cycle. Certain types of organization are involved with projects on a more or less regular basis. The manager has the benefit of seeing a project through to its conclusion. Personnel enjoy the dynamic environment that surrounds a project, and some people thrive in such an environment. Work on a project often inspires a team spirit.

Projects involve unique and often one-time only operations designed to accomplish a specific set of objectives in a limited time frame. Project techniques serve this sort of need, enabling the organization to focus attention and to accomplish a narrow set of activities within a limited time and budget framework, activities that must be carefully planned and coordinated in order for the project to be completed within time, cost, and performance guidelines. For large projects, these tasks can be formidable and may require careful planning and monitoring for successful completion.

For the Black Prophet, market forecasts… READ MORE

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