Engstorn Auto Mirror Plant Case

Good Essays
MICHAEL BEER ELIZABETH COLLINS

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

There had been several rough quarters at the Engstrom Auto Mirror plant in Richmond, Indiana, a privately owned business that manufactured mirrors for trucks and automobiles and employed 209 people. For more than a year, plant manager Ron Bent and his assistant, Joe Haley, had focused their Friday meetings on the troubling numbers, but the tenor of their May 14, 2007, meeting was different. Both men sensed that they now faced a crisis at the plant. Bent was talking animatedly to Haley: “This is the third productivity problem in, what, two weeks? We can’t climb out of this downturn with performance like that.” He scowled as he signed the authorization to air-freight a large order to the Toyota plant where Sam Martinez managed the assembly line. The difference in cost was astronomical, and it had been necessitated by the slow pace of productivity at Engstrom, which meant in this case that a job due for completion on Monday wasn’t completed until Thursday. But Bent couldn’t afford to make a late delivery to Martinez; he was a prized but demanding customer who had designated Engstrom as a certified supplier one year earlier. Only one other supplier for Martinez’s plant had achieved certified supplier status—a recognition of both extraordinary reliability and quality. The worry lines on Bent’s face deepened. Certified status meant that Martinez had personally authorized Engstrom products to be used on the auto lines without a quality inspection. Along with productivity problems, product-quality issues had also been creeping into the work done at Engstrom. Bent hoped that he was not paying to air-expedite defective mirrors to Martinez. Haley said, “Ron, we both know the employees have been complaining for months, but yesterday and today the talk has been pretty hostile. I’m not saying there’s a definite connection between nearly late delivery and the grumbling I heard, but

You May Also Find These Documents Helpful

  • Good Essays

    The Engstrom Auto Mirror plant employs over 200 people at its Indiana location. In May 2007, the Engstrom Auto Mirrors plant, a relatively small supplier based in Indiana, faces a crisis. The business was in the second year of a downturn. Sales had started declining since 2005; a year later, plant manager Ron Bent had been forced to lay off more than 20 percent of the work force. Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk. When the plant had reached a similar crisis point years earlier, the institution of a Scanlon Plan, a company-wide employee incentive program, had proven critical in building morale, increasing productivity and product quality, and leading Engstrom into a turnaround. Workers were motivated by the bonuses to increase their productivity, thus saving the plant from its unprofitable state. For several subsequent years, Engstrom workers had received regular Scanlon pay bonuses. But the bonuses had stopped in 2006, and now Ron Bent must determine how to get the plant back on track.…

    • 584 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    midterm papaer

    • 2046 Words
    • 9 Pages

    Ms. Wood replied to Mr. Barker “How would you know what the problem is…Our department always has to take blame for other departments’ errors?” The first main problem that Datasil Inc. faced was that there was a gap between what managers wanted and the situations that the managers of the organization were facing. This occurred because firstly managers were not aware of the gap. “why Why doesn’t the Customs and traffic department look for more efficient carrier?” Mr. Barker suggested. The Managers managers of different departments blamed one anothereach other as the causes of the problem. The Manager manager of the purchasing department suggested that an efficient carrier was needed;, the Manager manager of the Sales Sales and traffic traffic department pinpointed the wrong duty rates and lack of collaboration from other departments as a major issue; while the manager of the credit department suggested extra billing charges to be the case.…

    • 2046 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    “I prefer to think of this factory as a giant atelier, where a team of artists creates not specialized tools, but hand-machined works of art,” said Roger, the owner of Calumette Industries. “And as long as our goal remains pellucid to every employee, this company will soar.” Roger, who took over the failing operation just months ago, sparked life back into the floundering plant by replacing archaic industry practices with new methods guaranteed to increase production; however, despite Roger’s many changes to the plant, he was quick to note that he is a firm believer in the axiom, “Don’t fix things that…

    • 371 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Wengart Aircraft

    • 881 Words
    • 4 Pages

    The one of the macro problems Wengart Aircraft is having is that they are the second largest company in the industry but are only ranked sixth in profitability (Brown, 2011). Wengart gets a large amount of contracts but they are spending a lot of money reworking most of the aircrafts after they come off of the production line. Another problem is the quality of their aircrafts is in question with the Secretary of Defense and other private customers. The Secretary of Defense has gone as far to say if there is not an improvement in quality they will start holding portions of their payments as penalties. This would not be good because Wengart is already struggling to make profits due to the poor quality of work. In order to fix these problems Ralph Larsen the president of Wengart has brought in an organization development practitioner to help him understand the TQM that the Department of Defense wants him to implement. This leads to the biggest problem Wengart is facing because after the practitioner makes his points, Larsen thinks that the TQM is common sense and that Wengart is already doing most of the points. Larsen than calls a meeting of his vice presidents and put Kent Kelly in charge of the program, even after one of the vice presidents suggested Larsen be in charge of the program because the TQM should be a joint project meaning the human resources and production departments work together. Larsen however did not feel that he had the time to be in charge of the program because he wanted to concentrate his efforts to increasing profits. After the meeting Kelly sends a memo to Allan Yoshida explaining the TQM program, with that information Yoshida calls a meeting of manager and line supervisors to give them the details of the TQM program. Yoshida than went and email all employees an outline of the TQM plan and told them to ask their managers or supervisor for more details if they had questions. After that rumors began to…

    • 881 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    sinbad

    • 646 Words
    • 3 Pages

    In May 2007, the Engstrom Auto Mirrors plant, a relatively small supplier based in Indiana, faces a crisis. The business was in the second year of a downturn. Sales had started to decline in 2005; a year later, plant manager Ron Bent had been forced to lay off more than 20 percent of the work force. Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk. Downturns were not new at Engstrom. When the plant had reached a similar crisis point years earlier, the institution of a Scanlon Plan, a company-wide employee incentive program, had proven critical in building morale, increasing productivity and product quality, and leading Engstrom into a turnaround. For several subsequent years, Engstrom workers had received regular Scanlon pay bonuses. But the bonuses had stopped in 2006, and now Ron Bent must determine how to get the plant back on track. Should he revise the Scanlon setup? Remove Scanlon and try another plan? Identify and change other organizational factors that may be sabotaging Scanlon?…

    • 646 Words
    • 3 Pages
    Good Essays
  • Best Essays

    The problems the United States auto industry had during the late 70s and 80s were the lack of discipline, high absenteeism rates, and low morale among employees, all of which resulted in inefficiencies and low quality products. “Even with lesser quality, the (GM) Fremont plant averaged 34 man-hours of labor per automobile, versus only 20 at Toyota” (Rehder, Hendry, & Smith, 1985, p. 36).…

    • 3364 Words
    • 14 Pages
    Best Essays
  • Best Essays

    The current situation Toyota faces is the recall of millions of vehicles due to sudden acceleration causing the death of a few consumers. The delayed reaction from Toyota has them scrambling to make things right in the eyes of the customers and law makers. Robert Cole (2011) states “there appears to be two root causes for Toyota’s quality problems: the first is an outgrowth of management’s ambitions for rapid growth; and second is the result of the increasing complexity of the company’s products.”…

    • 1643 Words
    • 7 Pages
    Best Essays
  • Satisfactory Essays

    Greg Aziz Role Model

    • 417 Words
    • 2 Pages

    Gregory James Aziz is a force to reckon with in the freight Car manufacturing industry, as he has proved his competence through the success of National Steel Car. This is the leading manufacturer of railroad freight cars across America that Gregory J Aziz, an accomplished leader, heads as its CEO, and President. With quality education in economics, from the University of Western Ontario, Greg Aziz is armed with skills and knowledge, on how to hold the numerous responsibilities that come with these positions. As a result, he has propelled the National Steel Car in realizing its growth and operations to it’s over 2000 members, making it a leader in technological advancement and quality…

    • 417 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The already frustrated employees started to feel dejected as the management turned a deaf ear towards them. They lacked the spark which they used to have earlier and thus they were de-motivated to work and the production lines went in for a toss as the employee morale descended to an all-time low.…

    • 989 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Instead of being laid off, however, on Monday they will become temporary employees of the city of Lincoln. But the workers will be paid by the Japan-based company.” In 1981 there were ten workers who were no longer needed on the payroll due to decreased sales. So, instead of laying them off, management brainstormed and discovered a way to keep them happily employed. The idea is that loyal and experienced workers save money for the company in the long run. When sales increased again, they could put them back on the assembly line.…

    • 1614 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    The Engstrom Auto Mirror plant is a private-owned business that consists of over 200 workers in Richmond, Indiana. It is known for manufacturing trucks and automobile mirrors. The business started an incentive plan known as The Scanlon Plan in 1999, which allowed employees to earn bonuses. This was a fundamental to each person’s performance and paid rate of all work savings each month. After introducing the incentive plan, workers became motivated; as a result, it increased productivity, thus, saved the company from facing unprofitability in the 1990s. Unfortunately, in 2005, the plant again, faced low profitability and inadequate production. As a result of low profitability and productivity, “Ron was forced to lay off 46 employees in mid-2006…

    • 750 Words
    • 3 Pages
    Good Essays
  • Good Essays

    High Performance Tires

    • 1050 Words
    • 5 Pages

    During William’s period of management, he had three major concepts that he wanted to implement. The first two things were part of his strategy of a major expansion plan into effect. The first was to expand the number of retail tire outlets in smaller communities. The second was to diversify the products provided at each of the outlets to include higher margin automotive maintenance services including fluid changes, tune-ups, alignments, batteries, and brakes. The third concept that he implemented was to cut costs in the company. Although not bad concepts, each one ultimately led to problems within the company. William was not able to implement them effectively and ultimately was a bad strategy.…

    • 1050 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    The Goal Summary

    • 1586 Words
    • 7 Pages

    Alex Rogo, he is a troubled plant manager filled with anxiety about the future of his plant, and as a direct result, the future of his family and relationship with wife Julie. He has worked his way up in UniCo, and has carried much of the knowledge and preconceived notions about proper manufacturing to his current position. The state of affairs in the plant is nothing short of catastrophic, with inventory costs going through the roof (almost literally) and late orders piling up at an exponential rate. Once given a mandate from his boss Bill Peach, his world is thrown upside down. Rogo’s theories on manufacturing at this point are clearly grounded in efficiencies and measurements based on arbitrary calculations, and a stubborn reliance on robots and new technology, which ironically, foster a lower overall level of productivity. Though with all of Rogo’s theories on why and how his plant is not succeeding, he cannot seem to find the right answers to his questions in order to save the plant. All of his effort is put towards figuring out the ways in which he went wrong, rather than identifying the actual goal of his plant and UniCo as a whole. The first true realization of the plant’s error in its’ focus and goal is brought to Al’s attention when Bob, the plant controller, is forced to spend all of the factory’s energy and manpower on the shipment of one late order. Goldratt uses this as an example of an error in the…

    • 1586 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    crisis. In addition, this article will address how corporate culture played a role in the decision to outsource the manufacturing process to facilities, which were not following legal standards.…

    • 3442 Words
    • 14 Pages
    Powerful Essays
  • Better Essays

    Readers of my earlier posts on cascading problems at the electronics superstore won’t be surprised to hear any of this. Nearly three months after a post-Christmas nightmare at my local Best Buy led me to conclude the company was in the early stages of going out of business, I still hear every day from customers, employees, and former executives with new horror stories.…

    • 1986 Words
    • 5 Pages
    Better Essays