Shipper Manufacturing Company Case Study
In order for the APD Division at Shipper to gradually shift from a low volume/sole-source product line to a higher volume/continuous product, manufacturing will need to adopt new operations objectives with respect to cost, delivery, quality and flexibility. The current customized products allow for costs to be passed through to the customer but with a producer designed product, more of the costs could fall internally and have a larger affect on profits. The price tag of the product will become a more important objective due to increased competition and we will therefore want to reduce costs and should be emphasized as the mission objective. The shift from customer to producer designs will reduce flexibility since Shipper will aim for fewer manufactured products marketed at a wider audience. The quality objective should not change much from the current; Shipper would still want to maintain the quality standards they are known for, which may already provide for a distinct competence. Quality would be an order qualifier supporting the order winner of cost and can aide in positioning APD’s products as a strong competitor in the anticipated market. Delivery as a qualifier will also help win orders in a more competitive environment and thus the objective should be to trim it down. New expectations may require stocking a finished goods inventory and possibly maintaining supplies to quickly produce the goods during peaks of demand. Higher and more normal volume shipping routines may also benefit the end of delivery process. Shipper can help solidify a competitive role in the expected market by establishing a competitive advantage derived from maintaining these objectives when moving towards a multiple customer and high production volume strategy. 2
Many, if not all elements of operations will need adjustment to account for this change in strategy and manufacturing operations objectives. A low cost and improved...
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