Management Consultation: Improving Financial Performance the Scenario Essay

Management Consultation: Improving Financial Performance

The scenario presented by the prompt here concerns a company that we will refer to as a Silly Putty, Inc. Charged with the responsibility of producing industrial-sized barrels of Silly Putty for distribution to packaging plants on a multinational level, the company finds itself at a cross-roads. As a managing consultant, I have been brought on board to help the company navigate the most difficult point in its long and storied history. With commodity costs rising and revenues suffering in the face of a global recession, Silly Putty, Inc. must make difficult decisions concerning its future.

As the discussion here considers whether survivability is a possibility -- and if so, under what conditions -- it is necessary conduct a concise environmental scan. For Silly Putty, Inc., the environment is defined by three overarching factors. The first of these is its basic set of cost inputs, labor aside. These cost inputs include supplies, machinery, fuel and facilities. Each of these variables feeds into a process that, according to the discussion prompt, costs the firm roughly $2,000 a day. These costs are compounded by a second variable, which is that of labor.With 100 workers putting in 20 days per month, at a cost of $70 per worker, the firm puts out roughly 6000 units of industrial-sized Silly Putty every month. A third critical environmental factor is the general state of the economy and the impact that this has levied on all multinational firms and especially those which relay on large distribution networks as does our firm. Ultimately, we must acknowledge that certain fixed costs such as those relating to the consumption of fossil fuels and commodities like rubber cannot be altered through any manner of strategic reorientation. This will be a critical driver of the company's decisions as it moves forward.

As we evaluate the financial performance of the company, we recognize that we are not told a great deal about the sales figures experienced by the firm. That….....