Aston Blair Inc: company overview and business operations

Business

Aston-Blair, Inc. was one of the United States largest producers of precious metal alloys and other special metal alloys for commercial and industrial use. The company was medium sized, main headquarters was based in Chicago with four major sales offices and plants throughout the United States. The company was founded in 1881 by Aston's

Great Grandfather and had always, to current date, been recognized with a reputation for being a premier supplier of precious metals.

Aston-Blair had suffered major losses in the first quarter of 1991 and expectations for the second quarter losses would be even higher. This was the first major loss since

Two significant events were cause for the decline in sales. The economic slowdown in the early 90s affected the sales to both industrial and jewelry manufacturers. The second after Bush declared war on Iraq in 1991 the value of gold dropped dramatically, twenty-seven dollars an ounce and continued to decline. Other factors that led to the current difficulties were Aston-Blair's excessive inventories on the precious metals due to overly enthusiastic forecasts for the first two quarters in 1991.

Wynn Aston III, CEO and Chairman of the Board, believed the success of the company was based in part in the ability to identify and work with potential users by tailoring to their specific needs as well as aggressive marketing. Aston also believed that poor forecasting was one of factors in the firm's current poor performances.

In hopes of improving inventory control, financial planning and production scheduling Aston conferred with Peter Casey, Vice President of Marketing and Chris

Trott, Vice President of Corporate Planning at the closing of an Executive Committee meeting on June 12.

Casey and Trott decided it would be best to form a task force to investigate the forecasting problems. They chose Trott's special assistant, he had been Trott's financial analyst and currently was assigned to Trott's planning group. He had been with Aston-Blair for two years and had recently graduated from Stanford. His name was Michael Bacon. Bacon was regarded to be a promising and capable individual by Trott and Casey and Trott wanted to expose Bacon to different aspects of Aston-Blair.

Although Bacon was put in charge of the task force to investigate the forecasting problems, I find in reviewing this case, Bacon had no say in the formation of the task force. Trott and Casey decided what people would be put on the task force. Casey and Trott also decided the main focus of the study should be the Marketing Division since they were the four managers who made the final forecasts. After making theses decisions they conferred with Bacon. Casey tells Bacon they have appointed three product managers to represent the marketing Division. Casey did not feel it was necessary to involve the marketing managers because they were busy and had problems with changes in the past, and anyhow the product managers report to the marketing managers anyway. I feel this was a mistake and Bacon should have spoken up then and there. If you are focusing on the Marketing Division the Marketing Managers need to be in the task force, it is their expertise that is needed not production managers. As far as the Marketing Managers being too busy or not adjusting to change well should not have even been included in their decision making process.

One of the reasons for the task force is to enhance the Marketing Department. The Marketing Managers have no say so in the changes that need to be made. It is a business; they are employees. There were about seven employees from different divisions of the company on the task force.

During the first meeting with the task force, Bacon allowed others to make decisions that he just went along with. Not everyone knew each other and felt uncomfortable. To have a more relaxed environment everyone should have introduced themselves and given some background in regards to their expertise. Bacon should have had some kind of outline as to what he wanted to achieve. Again he did not gain control.

He allowed the suggestion for the team to be broken up in groups, but everyone was to stay in contact with him and keep him up-to-date on how the projects were going.

Bacon's focus stayed on a group that he felt he got along with well and allowed another group member (Meir, an economic analyst) to basically work on his own. He did not stay in constant contact with Meir as he should have, I believe this is what caused some of the problems within the task force. The task force I think should have all worked together. I also think that there were major communication issues within the task force.

There was a lot of talking but no one was really listening. With Bacon only having two years experience he had a lack of leadership skills.

Although the task force had a short amount of time, about five weeks, before the first meeting with the heads of the company, the task force did seem to be able to get the data that was needed. However, I did observe Bacon did not disclose important information at the meeting. One of the task force members made a report that clearly showed the regional managers were consistently overstating their sales estimates. In doing this it was costing the company money. Bacon agreed not to disclose this information as the task force member was still working on it. Bacon could have brought this information to the heads of the company at the meeting and state the work was still in progress. Instead, the task force did not seem to the heads of the company to be accomplishing anything.