Volkswagen Manufacturing Process Case Study

1. What is your assessment of the new process for managing priorities at Volkswagen? Are the criticisms justified? Is it an improvement over the old process?

The new process for managing priorities at Volkswagen is structured in a more strategic and logical manner than the old process. The new system prioritizes projects that are critical to business success and that help the company meet their financial goals. What is highly beneficial about this new process is that all units of the business are treated fairly in the decision making process. The prioritization process unbiasedly gives all departments the chance for their projects to be chosen and prevents any partiality from getting in the way of decision making. It measures all projects on

One issue in the new process is that while a project could become costly or harmful to business in the long run, that is not accounted for in the new system so long as it provides a short-term financial gain. Instead of looking at long-term horizons for projects, they are based more off of the short-term benefits they provide. The new process could also be seen as overly complicated when compared to the old process. Volkswagen clearly needed a better, more in depth way of determining what projects are worthwhile, but the new prioritization process may be too comprehensive. There are now numerous steps to be followed and with so many business units, it is possible that the new prioritization process will be a time consuming one.

2. Who controls the budgets from which IT projects are funded at Volkswagen of America? Who should control these budgets? Should the IT department have its own budget? The budget is currently controlled by VWAG, where they decide how much money should be allocated to each project – Matulovic is not part of the decision-making team when it comes to the budget. Since budget decisions come from the top, VWoA has projects totaling around $210 million, but their budget is only $60

It was made clear that the Supply Flow project would be highly valuable on the global level, but just because it did not meet the demands of the prioritization process on a lower level, the project was left unfunded. The prioritization process should be updated so that projects that provide benefits on a global level will be more highly ranked than those that only benefit a local or departmental level. The goal of any company is to prioritize company profits and by updating the prioritization process, Matulovic backs up that line of thought. After doing this, Matulovic should use the new process to evaluate the priority level for the Supply Flow project and go forward with it then if it meets the new