Centralization: Opening the Window of Opportunity

Brent Hinson, Kevin S Deary, Tina Herig, Eric L Martinez
Muma Case Review  •  Volume 5  •  2020  •  pp. 001-021
Legit Global was a major manufacturer of residential and commercial windows. Each division of the company had their own distinct engineering services department. This allowed for custom-fit solutions and engineering organizations, but also communication gaps and inefficiencies. Would centralizing engineering services increase productivity and decrease costs, or would it hamper creativity and sow dissent?

Edgar Madera, the Global Director of Engineering for Strategic and Capital Projects at Legit Global had been under a great deal of pressure lately; Madera had been tasked by Tad Legit, the Executive Vice President (EVP) at Legit Global to centralize engineering processes. Madera had worked with Legit long enough to know quick decisions that produced significant impacts were the expectation of the EVP. Legit had envisioned centralized engineering as an opportunity to reduce costs since the product demand softened in 2019 and was predicted to stay flat in 2020. In Legit Global, the Engineering and Quality Department had operated processes and standards independently and did not share best practices across the Department. The rest of the functional groups, e.g. Finance and Accounting, were centralized a few years back and were reaping benefits for the company. How much more time was Madera afforded to centralize engineering processes at Legit Global before Legit closed the window of opportunity?

Legit Global had grown rapidly over the last ten years. Newly acquired entities had brought the challenge of integrating additional equipment, personnel, capabilities, and systems. Legit Global had addressed most of these challenges, with more work to be done. They had focused on centralizing the processes of many different functional groups within the company. Functional groups that changed had standardized processes across the company, reduced costs, and increased financial performance. Some employees thought that centralization had increased bureaucracy and slowed operations. To further intensify the dissonance regarding centralization, corporate executives mandated increased oversight from managers, further fueling fears of tighter management control and increased bureaucracy.

The Engineering Department had not kept pace with the other functional groups within the company. Madera had reviewed department practices and discovered most engineering resources and processes existed in silos and were controlled by the Division Vice President (VP). Progress had always been reported by each lead division engineer directly to the VP, then reported to Legit.

Was the research that Madera conducted enough to make a compelling case for centralized operations amidst the inevitable resistance from functional VPs? How would he implement and fund centralized engineering processes at Legit Global? Was there a technology platform that could help centralize Engineering? Were centralized processes the key to Legit Global’s future success?
Engineering, shared services, centralization
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