Shel Case

case does not present a clear path. However, the case requires at least two major areas for discussion: 1. The immediate decision of accept or reject ACL’s request.

 2. Future vendor/owner relationship and project change control process.

SCF faces a very common dilemma of being a vendor tied to a big company. Their BATNA is relatively weak. Most students will seek compromise by getting back to ACL with some backup data on a new, realistic estimate. The driver for this approach frequently is the late date for what is basically a design change. This is a very reasonable approach, but it is not the only approach. Can they resolve the issue and create a more positive, lasting win-win relationship?

 Discussion Items

1. How good is the change control system of SCF? (Good, but design freeze agreement?)

2. What are the major challenges facing SCF?

3. How important is SCF’s business to SCF? Is SCF in a strong or weak BATNA?

4. What is your assessment of ACL’s management?

5. How important is the two percent performance improvement to ACL?

 6. How can SCF better manage the vendor relationship?

7. Who designs the hardware? The shell casing?

8. How long does it take to set up for a new design? (No information available)

 9. Is it too late to think of a “partnering arrangement?” Is it too late to make Sabin a part of the project team at SCF?

10. Given the trend to use outside contractors, what kind of collaborative training would help SCF and ACL reduce the kind of situation they are now facing?

 When the discussion gets down to dealing with how hard to push, a discussion can ensue on the implications for each company. For example, if SCF holds tight on their estimate, what are the internal and external implications for future business and projects? If ACL gets tough, what are the implications for future projects with SCF? Will either company want to go down the confrontational path? Regardless of the approach taken, the impact and outcomes should be covered in detail.

The Nature of Student Analysis Comments

1. How long does it take to set up the new design for the dome modem? Ask ACL if they are willing to accept the risks that go along with the change?

2. ACL acts as a bully who is unrealistic.

 3. It seems too late to start a new design with the time to market risk. The later the change is addressed, the greater the cost, duration, and risk.

 4. SCF is in a very weak BATNA position.

5. SCF should present a justification for no change by listing risks inherent in a new design and time to market.

 6. If the new design fails, what happens to the January 15 deadline?

 7. Some form of a partnering relationship is needed for collaboration and negotiation.

All of this student analysis can lead to the second driver of the case: improving the change control process. Although SCF has a project control process in place, tighter control on changes is needed. As an exercise, creating a list of proposed change process adjustments is not difficult for a class of creative students. In this SCF project a great deal of discussion will center on having a clear “freeze” date