Flextronics: Deciding on a Shop-Floor System for Producing the Microsoft Xbox.

Flextronics: Deciding on a Shop-Floor System for Producing the Microsoft Xbox.

Q1. Underlying preferences of the relevant parties?

The conflicting preferences among the relevant parties are:
Flextronics won the order from Microsoft to manufacture the Xbox. Microsoft hopes to launch the Xbox simultaneously in both North American and European Markets. That requires the manufacturer--- Flextronics’ two facilities designated to build the product would have to work together very closely to achieve Microsoft’s goal. To do that, Flextronics have to use the same shop-floor management system in both facilities so that Microsoft could track all the production statistics more easily, which also is the commitment made by Flextronics when it was biding the business.

The North America facility use Datasweep as the new corporate shop-floor system. Hungary facility is quite resistant to adopting this software. They use a “home-grown” system called Virtual Factory and strongly preferred to continue using it. The boss in European operation even makes it clear that they had no interest in switching.

Both parties were already manufacturing other products using their own software. They are also mature systems. It will be a great cost for either one of the factory to switch a new system. But on the other hand, they also could not afford to defy Microsoft’s requirement for a single system. In addition, several internal and external parties were watching this project closely to gauge Flextronics’ ability to coordinate a large-scale global project.

There are also some other issues that need to be concerned. These two facilities had never worked together in the past, and very few people other than those, at the most senior level, knew their counterparts at the other facility.

Q2. Beyond the specific people involved, what other organizational factors make this situation difficult for McCusker to resolve?

First, Flextronics’s entrepreneurial culture advocates decentralized decision making, which make it have a few “corporate” executives. People of...

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