Reference no: EM132264725

The CEO of Supply Chain Management Unlimited, LTD, Mr. Hiram Fiream, is being hammered during quarterly analyst calls because SCU has failed to develop a manufacturing outsourcing strategy that takes advantage of inexpensive Pacific Basin labor rates. The analysts are absolutely incredulous that, unlike his competitors, Mr. Fiream does not understand the obvious economic advantages of this strategy (“what doesn’t he understand about $1.00/hour labor?”). Some major investors are calling for his ouster in favor of more enlightened management that will “unlock shareholder value.” Mr. Fiream is in a quandary. He believes that Pacific Basin outsourcing is not the correct strategy for SCMU. Truly amazing: he also believes that there is more to this decision than labor rates. But what if the analysts and his competitors are right? He turns for assistance to his Vice-President of Supply Chain Management who immediately sees this as a great opportunity to impress the CEO. Remarkably, she assigns her newest hire, a bright young MBA (you!), the task of analyzing this question. How would you approach this assignment? Would you bring in a consultant to recommend a “best practices” approach based on their “world class” expertise? Would you develop a spreadsheet? Would you organize a weekend retreat for senior executives facilitated by an industrial psychologist? Or would you do something else? There is a lot at stake here: the bonus of the CEO is based on stock price appreciation.