1 Is Andy right that Marketing should have forecast the last-minute surge in demand for the ‘discounted rate’

product? It had been a long day for Andy Curtis when he emerged from the meeting. In spite of the early May sunshine he looked pale when he gathered his team around him. ‘It was terrible in there. The Marketing people gave me a really tough time when I reported our current average turnaround times. They were quite happy to remind me that I had told them our “discount rate” product was killing us operationally and that we had to pull it if we were to survive the reorganization. I’ve been made to look stupid because now, four weeks after reorganization and after the product has been pulled, our turnaround times are even worse. I think they are right, we really are a shambles.’ Mary Godfrey, his deputy, was protective of her staff and offended that Marketing was calling her team a shambles. ‘It’s no use blaming us, the staff are working flat out but we can’t seem to make any inroads to the piles of work.’

Andy Curtis was the Mortgage Operations Manager for North West Constructive Bank (NWCB), a large retail banking group with a mid-sized mortgage business. His main responsibility was running the new applications process in the bank’s new mortgage centre. For twelve months Andy had led a project team that had been planning the consolidation of the bank’s original three mortgage processing centres into one new site. Prior to the consolidation, the bank’s mortgage business had been divided into three regions: ‘Northern’, ‘Southern’, and ‘Western’ applications.

‘The driver for the consolidation was to achieve economies of scale. There is no reason why a processing centre need be located close to its market and we could make significant savings by giving up our city centre leases on the three old sites, consolidating all our operations on a single floor of the bank’s main headquarters building. We also felt that there would be room to develop more flexibility between the three regions when demand varied.’