Page 246 - Writing Winning Business Proposals

Paramount Consulting’s Proposal Opportunity at the ABC Company 237

“But,” Metzger counters, “there’s still some space available within the current
site into which the present manufacturing facility could expand. Most of ABC’s
additional capacity requirements could be met by expanding the current facility
into the space remaining.” He suggests, however, that to meet the projected fore-
casts they would probably have to operate a full third shift.
“Are there any downside risks to operating a three-shift schedule?” Gilmore
asks.
“It would be a challenge,” Metzger admits, “because maintenance work would have
to be done on the weekends, in which case, we’d incur additional overtime costs.”
Gilmore pursues the issue: “Could productivity and quality on the third shift
be expected to attain the level of the other two shifts?”
They would undoubtedly experience additional absenteeism and turnover,
according to Metzger, and might even have some difficulty in recruiting for that
shift. But even if operating costs are higher, ABC’s capital investment would be
considerably lower by expanding the existing facility:
“It’s also possible,” Metzger says, “that we could hold expansion space to a mini-
mum by using outside storage for raw materials and finished goods, if necessary.”
Gupta introduces Paul Morrison, ABC’s Chief Industrial Engineer, to apprise
the group of the manufacturing capacity situation. Morrison has an under-
graduate degree in industrial engineering from Michigan and a master’s in that
discipline from Georgia Tech, where, as a graduate assistant, he taught under-
graduate courses in quantitative methods. He joined ABC three years ago, and
one of his recent projects was to develop a computer model to enable the division
to improve its distribution methods and to track and control those costs, which
are an important part of their total operating costs.
According to Morrison, he and his department have not studied the capac-
ity situation to any great extent because they have been occupied in helping the
production departments maintain productivity levels so that they can meet
increasing schedule demands. However, after examining current work center
loads to judge the amount of new equipment that will be required and estimating
the amount of additional storage space that will be needed for higher production
levels, he questions whether the space available on the existing site is adequate:
“Even though investment costs might be lower, I would be hesitant to put all of
ABC’s eggs in one basket, giving us no protection against natural catastrophes or labor
difficulties. Furthermore, ABC’s markets are growing faster outside the Midwest.”
He suggests that even if the projected forecasts could be satisfied at the present site, if
they were able to increase market share further, or if the overall market grew more rap-
idly than expected, they would be facing the same dilemma again in the near future:
“In my view, the consultants must carefully define what ABC needs in terms
of additional manufacturing capacity, develop logical alternatives to meet these
needs, and then quantitatively and qualitatively evaluate those alternatives.”