Case Study Microlite S.A.: the Pan-Orient Decision

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Case Study Microlite S.A.: The Pan-Orient Decision

Abstract
Microlite S.A. which is located in Brazil was the largest producer of batteries in South America with a mighty 55% share of the Brazilian battery market. Top Management had decided to shut down all but one out of three of the dry cell battery factories in Guarulhos. This opened up the chance for Luiz Pinto, manager of Microlite's battery factory in Jaboatão, to take over this market share and do further investments in his company. This report is going to describe three basic different proceedings on how he can increase his production. Take over the old machines from the factories in Guarulhos, invest in new machines from Pan-Orient or come up with new ideas how the current processes can be improved to cover the shortfall.

Possible Solutions
The closing of the plants in Guarulhos caused the Jaboatão plant to increase the production of one-eighth of its production to absorb this shortcoming. Luiz Pinto can basically choose from several solutions to reach a required capacity of 540 units/min:

1) Take over old machines from the factories in Guarulhos
The machines from Guarulhos were stated to be more reliable than the current machines in Jaboatão. A partly or a complete takeover of these machines would allow to adapt to the needed capacity. Unused machines could be sold.
2) Acquire a new assembly line from Pan-Orient
This would be the opportunity to replace the old batch assembly machines with an automated assembly line for AA-size batteries. This investment of 2M$ would allow to reach and even excess the needed capacity, drastically reduce downtime and the number of operators.

3) Diverse improvements in the production line
Through various improvements (e.g. improved supply mechanisms) we could try to reduce the huge downtimes in the current production. Those 10-40% are mainly due to intermittent short stops to fix jams or adjust settings. If it would be possible to reduce this...
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