Global Supply Chain Management Case 4 Report Global Plant Location - Applichem (Harvard Case) Qian Wang Tsai-Lan Huang Xiaoqing Ge March 15, 2000 How would you measure the productivity at a plant and perform a fair comparison of the performance of Applichems six plants We assume that the Number of People at Each Operation at Each Plant means number of people for each product type at each plant. Therefore the product variety difference among different plants should already be taken into consideration in Exhibit 3. But the package variety is also an important factor for performing a fair comparison of the performance, since the package variety difference is very big among all the 6 plants. For example, Gary is carrying 80 package sizes while most of the others carrying only 1. Therefore we divide the package labor (in Exhibit 3) by the number of package sizes the plant runs, and calculate the subtotal of direct labor based on it. By this modified calculation, the plant productivity is as shown in table 1.2. Table 1.1
Direct labor MexicoCanadaVenezuelaFrankfortGarySunchemOriginal package labor in Exhibit 310.456.214.611.32.7Modified package labor10.4184.108.40.206251.35 Table 1.2
Productivity MexicoCandaVenezuelaFrankfortGarySunchemaverageby direct labor0.8820.2150.3180.8280.5910.2780.518523by direct labor-modified0.8820.2150.3150.8281.1160.3040.610116by indirect labor0.6910.1670.3730.9450.4050.2410.47017by total0.3870.0940.1720.4410.2400.1290.243886by total-modified0.3870.0940.1710.4410.2970.1340.254144Similarly, for the manufacturing cost, it is unfair to measure using total manufacturing cost which includes the packaging cost. The manufacturing cost before packaging is a more realistic measurement. Why do you think the plant have different productivity The productivity depends on the product make-up, equipment efficiency, employee loyalty, improvements, operator technology, national labor rules, product quality etc. The following table summarizes the...
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