Wriston Manufacturing-Detroit plant (Paper from internet for us reference) Detroit’s production is unique when compared to other Wriston plants. Runs are typically low volume, involve significant set-up time, and vary significantly due to the sheer volume of different products lines, families and models. It is notable that the Detroit plant is the only plant manufacturing all three product lines: brakes, off-highway and on-highway axles; all other plants produce only a single product line. Manufacturing in Detroit is significantly more complex than other plant. Capital investment has lagged in Detroit and the equipment is out-dated and inefficient. The general work environment is poor, with leaking pipes and old fixtures. The layout of the Detroit plant is piecemeal; production typically requires complex flows through dedicated machining areas scattered about various buildings. Both the environment and other factors seem to contribute to a poorly motivated workforce. Wriston accounts for the revenue of each plant on a standalone basis. This is not an accurate method of cost accounting since Detroit contributes to the other plants' revenues. Recommendations
Wriston’s Detroit plant is no longer a viable operation due to long-term capital underinvestment and product-process mismatch. It is recommended that the plant be phased out of operations over a 3-year period with production and staff gradually shifted to a new plant to be built in the Detroit area. Further, it is also recommended that division accounting procedures and evaluation mechanisms be modified to allocate revenues/costs allowing for the synergistic benefits of Detroit’s products, and to recognize inherent manufacturing complexities, respectively. Analysis
Several alternatives are presented to the division's management: Alternative 1 - Close the Plant and Distribute the Production of the Parts Amongst other Plants: When considering shutting down the Detroit plant, the impact on the receiving plants...
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