Preview

Muenster Pump Case Analysis

Good Essays
Open Document
Open Document
899 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Muenster Pump Case Analysis
Muenster Pump Case Analysis

I. Major Facts Related to the Muenster Pump Case
A. The company has cast its own pump housings for over 40 years. A competitor is now offering a cheaper alternative should Muenster choose to outsource pump housings. Terri, Purchasing Manager for Muenster, has learned that Union’s quote of $90 is one half the price it takes Muenster to manufacture their own pump housings. She’s proposed outsourcing but met with resistance on multiple grounds.

B. The ownership is against outsourcing based on:
a. Muenster controls the production, quality and quantity.
b. Muenster’s reputation and name directly tied to product created in-house.
c. Should the foundry close due to outsourcing, 16 employees would be without jobs, creating an economic hardship on the small community and potentially damaging good relations with the city officials.

II. Major Problem with Muenster Pump Case
Upper management refuses to entertain the idea of outsourcing when presented with cost savings alternatives. There is stubborn hometown resistance to the idea of change.
III. Possible Solutions/Alternatives
A. Plan A – Do Not Outsource but Investigate for Muenster’s use the new casting developments used by Union Foundry
a. The new developments in casting claimed by Union are evidently known and in use as the other two foundries presented only slightly higher prices.
b. Based on the information of new developments and substantially lower costs, secure upper management’s blessing and create a cross-functional team (upper management, production, finance, operations, etc) to research the new developments and ascertain the costs involved to upgrade Muenster’s foundry.
c. Explore and research, testing comparisons, if Muenster’s historical method of producing a quality product will work with the new casting developments or if this could harm the quality and, in turn, the company’s reputation.
d. Final decision will be based on equipment needed, training

You May Also Find These Documents Helpful

  • Powerful Essays

    MetalWorks was established in 1964 as a family venture and grew throughout the „70‟s and „80‟s at a fairly steady rate. Until…

    • 2678 Words
    • 11 Pages
    Powerful Essays
  • Satisfactory Essays

    5. If thin-slab casting works, do you think it is likely to generate a sustainable competitive…

    • 544 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Nucor needs to cut back the casting cycles from sixteen weeks to five weeks in order to regain the lost market share. This is important to implement because it will help keep contractors from buying their steel from warehouses, even if they have to pay a slightly higher price for their products.…

    • 9373 Words
    • 38 Pages
    Powerful Essays
  • Better Essays

    Managing Change Ethically

    • 1460 Words
    • 6 Pages

    From an ethical stance, we need to examine the most important issues concerning outsourcing and offshoring which are product quality, information security and labor conditions (Robertson, Lamin & Livanis, 2010). A decline in product quality is possible due to a reduction in management oversight…

    • 1460 Words
    • 6 Pages
    Better Essays
  • Better Essays

    Another main problem is how to break down the resistance to change from stubborn employees. Business may miss the point that it is the people who develop the idea to change who are the most enthusiastic about it. Senior executives aren 't more adaptable than lower level employees. The real problem is that ownership is at the top.…

    • 1190 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Fonderia Case solutions

    • 301 Words
    • 2 Pages

    - The benefits over time include higher quality products, lower scrap rates, which will save raw material costs. The company will employ twenty-five less workers which equates to lower costs in terms of managing, training, and insuring those employees. Lastly the foundry will create 30% more floor space which has not yet been used for due to the old machines current location.…

    • 301 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Employees resist change for a wide variety of reasons, ranging from a straightforward intellectual disagreement over facts to deep-seated psychological prejudices.…

    • 3958 Words
    • 16 Pages
    Powerful Essays
  • Powerful Essays

    Chaparral Steel

    • 3938 Words
    • 16 Pages

    The case, Chaparral Steel (Abridged) serves to look at OM issues in an integrated way, as faced (during the period from its inception in 1974, and up to September 1979) in a World Class Company. (The second case and the note on ‘Projects and Teams at Chaparral Steel’ are mainly to give additional information, and are not a formal part of the assignment.)…

    • 3938 Words
    • 16 Pages
    Powerful Essays
  • Powerful Essays

    Disruptive Innovation

    • 2779 Words
    • 12 Pages

    Continuous Casting Investments at USX Corporation is a case involving a large, established mining and steelmaking company that after almost 80 years of existence is deciding whether to go forward with a $600 million dollar investment to upgrade its Mon Valley steel facility. From its founding in 1901 through the 1970’s the company dominated the steel industry. In the 1980’s USX was hit hard by poor economic conditions and higher manufacturing costs. In addition, “minimills” which had previously not been a competitive factor for USX, obtained cost advantages and began competing heavily with integrated mills such as USX. USX responded by closing or selling eight of inefficient facilities and restructuring its remaining manufacturing facilities to focus on hot-and-cold rolled sheet, strip and tin products rather than a larger range of products which it had done in the past. Additionally, USX invested over $2 billion to improve its processes to become one of the, if not the, most efficient steel manufacturer in the world by improving labor efficiency from 11 man hours per ton (mhpt) to just 3 mhpt. As described above, in the 1980’s USX made many large investments to improve its efficiency and remain competitive in the market and a market leader, primarily as a low cost producer of high quality sheet and strip steel. For example, it invested $800 million and $200 million at two facilities, respectively, in the early 1980’s to launch continuous slab caster and hot-rolling mills. Nonetheless, the Company was in a mature market and competition was increasing. Although USX was an unquestionable market leader for 80 years, like so many well established companies, by the 1980’s and early 1990’s would need to further increase innovation if it was to be in the 10% of companies that would continue to grow consistently over the next 10 years. USX would soon find itself in a position to…

    • 2779 Words
    • 12 Pages
    Powerful Essays
  • Better Essays

    In October 2007, CJ Industries (CJI) had just been awarded a 5-year contract, amounting to $10 million per year, commencing on July 2007 to supply Great Lakes Pleasure Boats a number of key engine components for their luxury line of pleasure boats. The award marked an important milestone for CJI, in that it was the culmination of several years of hard work and dedicated service, supplying Great Lakes parts for their boats on an as-needed basis. The contract had significant long-term follow-on potential as well, if they could continue to show Great Lakes they had the capabilities to be one of their valued, alliance partners. In addition, with this contract, Great Lakes would represent approximately 30 percent of CJI’s annual sales, so performing adequately on this contract had a significant long-term financial impact on CJI.…

    • 1064 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    TechNavio's analysts forecast the Global Aluminum Castings market to grow at a CAGR of 9.96 percent over the period 2013-2018. One of the key factors contributing to this market growth is the industrialization and development in the APAC region. The Global Aluminum Castings market has also been witnessing the shift of manufacturing units to emerging countries. However, the increase in energy requirements could pose a challenge to the growth of this market.…

    • 469 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Capital investments that are more than $5,000 need to be approved by the budget committee. In September 2000, a new stamping press and an extrusion press were requested. Two models of the stamping press and the extrusion press were under consideration. The SX-65 costs $65,000 and is expected to last 5 years. The MD-40 is more durable and is expected to last 10 years at a cost of $90,000. For the Extrusion Presses, Metalcrafters will have to choose between a small press costing $650,000 and a large press costing $1,000,000. Due to capacity constraints, Metalcrafters can only choose 1 to order. Additionally, management had to choose between 2 parts orders between Eades Electric and Sawmasters due to limited capacity.…

    • 1894 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Discussion Case 1

    • 6374 Words
    • 26 Pages

    Overview of Main Points Here is what we know about Precision Worldwide, Inc. (PWI): Manufactures industrial equipment and parts for sale in numerous countries. Repair and replacement parts account for a substantial part of the company’s business with the replacement part in question, steel rings, occur in the machines manufactured only in PWI’s German plant, but can also be used on some competitor’s machines. This steel ring has an average normal life of about 2 months. These individual rings are replaced as they wear out and recently competition has increased and now a competitor has entered the market with a superior and less expensive plastic ring that can replace the steel ring. The general manager of the German plant, Hans Thorborg has been considering the introduction of a similar plastic rings as a substitute for the steel rings. o There is a lot of potential for this product in this market because there is a lower manufacturing cost and a greater durability compare to steel rings. o The company is wondering if it is worth to shift from steel rings to plastic rings, but there are a lot of facts that they need to consider. o There are conflicting views concerning the future of the steel rings departments if they should change to plastic rings in order to acquire competitive advantage in this market and what will they do with the special steel after they have implemented the new product.…

    • 6374 Words
    • 26 Pages
    Powerful Essays
  • Satisfactory Essays

    Msc Kl/R

    • 455 Words
    • 2 Pages

    Steel in the News Industry happenings, auctions, firms for sale, and notable events. SteelWise Practical technical articles produced by AISC 's Steel Solutions C enter. Quality Corner Insights into AISC 's Quality C ertification program. Career Resources A collection of articles relating to professional development. Steel Utilities A forum for posting and downloading software tools. Steel Interchange Answers to technical questions posed by MSC readers and others to the AISC Steel Solutions C enter. Steel Availability Find structural shapes in common grades of steel. Career Classifieds Employment opportunities and career services. Product Directory Find software, products, and services. Industry Links C ontact information for professional organizations. Twitter Follow us on Twitter. Photo Gallery Browse images in addition to those printed in the magazine.…

    • 455 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Production was 60,000 units in each of the past 2 years. Future needs for the next 7 years are not expected to fluctuate beyond 50,000 to 70,000 units per year. Cost records for the past 2 years reveal the following unit costs of manufacturing the subassembly:…

    • 423 Words
    • 2 Pages
    Satisfactory Essays

Related Topics