Rubatex Corporation

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Rubatex Corporation, which manufactures rubber and foam for a variety of products, is having lots of problems, particularly at their Bedford plant. Although the sales have increased, the net profits have decreased. American Industrial Partners (API), who purchased Rubatex, is demanding aggressive action to be taken to reduce the losses incurred. The working conditions at the Bedford plant are abysmal. The plant is hot, dirty and not air-conditioned. The equipment is old and outdated. The work in the mill area is physical in nature and requires the handling of very high temperature rubber stock. Furthermore, workers are having a total of 40 minutes break every eight hour shift. Workers are also worried from the chemical dust that they are exposed to from the mixing compound will cause them health problems. Moreover, the labor-management relationships are not good. In an attempt to increase productivity at the Bedford plant, the management of Rubatex decided to increase the amount of rubber made in a single batch and decrease the baking time from 30 minutes to 15 minutes. The management’s target was to increase productivity by increasing the output (baked rubber) and reducing the input (time for rubber to be baked). Yet, the management did not take into consideration the maximum amount of rubber that a batch can hold or the temperature and the time requirements for proper baking. The management failed to study the negative impact this had on the efficiency of the labor force and on the quality of the baked rubber .Ultimately, there was a 33 % increase in baked rubber, however, the percent of usable rubber that can be sold has decreased dramatically. In another attempt to solve the problem, the management has decided to “engineer a turnaround”. The mission was to boost sales by 30%, oblige workers to work overtime, and reduce the health care benefits to retirees to save costs. This resulted in a nine-month strike. The company failed to build good relationships...
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