Operations Management p.424 HW
Shipper Manufacturing Company
Advanced Products Division:
1) Become more market-focused
2) apply resources toward market and product development programs
3) Retain low-capital, high labor intensive character
Vision: Shift towards products that are sold to multiple customers and manufactured on a volume basis. Business Strategy: Continue to respond to individual customer design requirements and tailor new products to unique customer applications. Five-Year Return on Net Assets: between 30% and 40%.
Qustion#1 Manufacturing Objectives:
1) Cost- The shift in concentration from low volume specialty items to high volume continuous production means APD will be competing through quality. APD will look to satisfy targeted market segments and niches with more continuous production of quality products, while still leaving a small area of its division for customized products with special customer specifications. Shipper must work closely with marketing and operations to ensure workers are trained to understand the markets Shipper wishes to serve and ensure that the price it is producing a non-specialty item at fits customer demand given Shipper's high margin requirement. Shipper's investment in a new inventory control system should help reduce non-value added costs in the supply chain and ensure that the product mix is capable of meeting company objectives and company needs. The costs needed to add capital equipment and increase product development will also have to be considered. Finally, organizational restructuring costs could be possible to better communicate amongst the divisions for inventory supply. Strategic partnerships both internally and externally through the supply chain will aid in ensuring margins are met. 2) Quality- Shipper is clearly looking to continue a reputation of top quality with its low volume highly customized business, but now combine that with a higher volume business that will have to make them ensure...
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