Operation Case Study

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Teaching Notes

Synopsis and Purpose

Shipper Manufacturing Company is a manufacturer of electrical products, laminated materials, and specialty products. The Advanced Products Division (APD), which manufactures the specialty products, has reformulated its corporate strategy. As a result, its manufacturing strategy should also be revised.

In the past, APD has manufactured custom products in low volume for its customers. The division plans to gradually add higher volume products for multiple customers. As a result, changes will be needed in manufacturing to effectively compete in the new environment.

The purpose of the case is to expose the students to the concept of a manufacturing strategy and the changes in manufacturing which are associated with a change in strategy. The case provides an effective vehicle for teaching this and also for the concept of integrating all aspects of operations.

Discussion Questions

1.What objectives should be adopted in manufacturing with respect to cost, delivery, quality, and flexibility?

2.How should the objectives in manufacturing be achieved though process, organization, equipment, work force, capacity, scheduling, quality management and production and inventory control systems?


The impending change in business strategy implies a change in manufactur¬ing toward higher volume and lower cost products. Presently the products are custom-designed and costs are passed through to the customer. In the future, the products will be producer-designed and costs will not necessarily be passed through to the customer. Because of more intense competition, cost becomes a more important objective, while flexibility is simultaneously reduced.

The quality objective will not necessarily be changed by the new business strategy. The division must decide where it wants to position itself on the quality spectrum.

The delivery objective will probably be changed...
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