Adding a Machine Case

Question

Hello -

Case Prompt: the CEO of a plastic bag manufacturing company has attended a new technology conference and he is interested in integrating a new machine that would automate part of the manufacturing process. he has engaged us to determine whether or not he should do that.

how would you structure that?

My Approach:

1- Cost of the Technology

- Upfront costs (I.e, machine cost; training;etc.) - Ongoing costs ( I.e. utility etc...)

2- Benefits of Technology:

- Additional revenues - Cost savings

3- Technology Integration Impact/Risks :

- Impact on Operations - Impact on Quality Etc. ...

Where would you put the Investment Criteria (NPV, Payback period, ROI?)

Is that a MECE structure?

Thanks

Answer 1

Hi there,

Your structure is exactly right. To answer your question around ROI/NPV it's the entire framework! So, you'd want to clarify/summarize this at both the beginning and end of your framework (fundamentally, I want to figure out if this makes sense from an ROI perspective...bucket A gives me x, bucket B gives my y)

Answer 2

Yes, very good structure!

In summary, a new technology will improve the underlying processes leading to a better employee experience, improved product/service which in turn will improve customer experience. The costs involved be associated installation, training , maintenance, decommissioning any legacy technology.