The Situation
A Malaysian manufacturer with approximately RM250 million in annual revenue operates three factories with installed capacity significantly above current demand. Following a prolonged downturn in the industry, utilisation has fallen to around 45%, while the company is losing approximately RM2 million every month.
Cash reserves are declining, suppliers are tightening credit terms, customers are demanding lower prices and several ageing production lines require substantial maintenance.
Sales believes the company needs more orders. Operations believes selling prices are too low. Engineering believes RM15 million to RM20 million may be required to restore equipment reliability. HR warns that manpower has already been reduced considerably.
The CEO is therefore dealing with an interconnected commercial, financial, operational and organisational problem in which almost every major decision affects several others.