Chuck's Wagon Solution

Table of Contents

Strategy Overview1

Recommended Turnaround Strategy1

• Impact on Management2

Recommended Accountability Strategy3

• Impact on Management3

Observer Report5

• Team Meeting Principles5
• Problem Solving Approach5
• Decision Making6
• Conflict6

Strategic Overview

We have reviewed the current state of Chuck’s Wagon and recommend a hybrid turnaround process, which will immediately cut each production line’s slowest moving SKUs and require a substantial commitment to developing a more rigorous cost analysis process. In conjunction with the operational changes, we recommend employing a leading indicator system for accountability among management

Recommended Turnaround Strategy

Steve Jones, President of Chuck’s Wagon Inc. (“the firm”), should eliminate the slowest-moving SKUs and invest in a more rigorous cost analysis that involves all departments.  This hybrid approach reduces short-term costs of production, gives the firm a robust tool to ensure long-term profitability, and allows cross-functional integration within the management team.

Begin with quick wins.  Reducing the slowest-moving SKUs gives Jones a strong start on which to build his turnaround program, with immediate benefits and few drawbacks.  The move will reduce operational complexity and obsolescence rates.  This, in turn, will drive down cost, all without firing employees or losing Chuck’s participation in all product categories.  These immediate benefits, while possibly not solving all of the firm’s problems, will allow Jones to live up to his boast of, “Let the figures speak for themselves after six months.” (Chuck’s Wagon, p6).

Set up future big wins.  Engaging in a more rigorous cost analysis lays the groundwork for improving profitability over the long-term. Armed with a system for determining individual product profitability, Chuck’s Wagon will be able to target specific costly products or activities and pinpoint areas where the firm could be most effective.  A thorough cost analysis addresses the primary drawback of the slowest-mover strategy, inadequate cost reduction, and ensures that the firm builds on its quick wins with larger-scale improvements in the future.