Applichem Case Analysis
SITUATION ANALYSIS
Applichem is a manufacturing company producing Release-ease, a specialty chemical for the molding industry. On mixing with the plastic molding compound, Release-ease prevents any residue when the molded parts are separated from the mold. This helps in keeping the mold clean.
They have six plants – one each in Gary, Canada, Frankfurt, Mexico, Venezuela and Sunchem in Japan. Each region has a different specification. This along with capacity constraints leads to export-import amongst the various plants.
Release-ease is manufactured by a four step process. The steps for this process are:
• Reaction: This consists of compressing the raw materials under heat/pressure to form Release-ease. This results in formation of a slurry. The size of …show more content…
Lbs/yr) 18.5 3.7 47.0 22.0 4.5 5.0 Capacity Utilization (1982) 76% 70% 81% 78% 91% 80%
Packet Sizes 80 packet sizes 50 Kgs 50 Kgs 50 Kgs 50 Kgs 1/2 - 1 Kgs
In order to identify the weak areas of Applichem, we need to evaluate the performance of all its manufacturing plants. This is also necessary to comprehend its operations. Each factory fulfils the needs of a different market.
We also see that the plant at Sunchem has an extremely high figure of operating costs. The operating costs of Sunchem are more than twice that of the Gary plant and more than three times the costs of the Mexico plant. One important reason for such high costs for Sunchem is its waste treatment cost which is very high as compared to other plants. This can be attributed to the fact that it is the only plant with scrubbers for processing gaseous wastes.
Sunchem also has high direct labour, salary and fringes cost compared to other facilities. This is due to the severe labour laws and regulations in place in Japan, such as greater employee and license requirements. The utilities costs are also much higher.
The Mexico plant has the lowest operating
Applichem is a manufacturing company producing Release-ease, a specialty chemical for the molding industry. On mixing with the plastic molding compound, Release-ease prevents any residue when the molded parts are separated from the mold. This helps in keeping the mold clean.
They have six plants – one each in Gary, Canada, Frankfurt, Mexico, Venezuela and Sunchem in Japan. Each region has a different specification. This along with capacity constraints leads to export-import amongst the various plants.
Release-ease is manufactured by a four step process. The steps for this process are:
• Reaction: This consists of compressing the raw materials under heat/pressure to form Release-ease. This results in formation of a slurry. The size of …show more content…
Lbs/yr) 18.5 3.7 47.0 22.0 4.5 5.0 Capacity Utilization (1982) 76% 70% 81% 78% 91% 80%
Packet Sizes 80 packet sizes 50 Kgs 50 Kgs 50 Kgs 50 Kgs 1/2 - 1 Kgs
In order to identify the weak areas of Applichem, we need to evaluate the performance of all its manufacturing plants. This is also necessary to comprehend its operations. Each factory fulfils the needs of a different market.
We also see that the plant at Sunchem has an extremely high figure of operating costs. The operating costs of Sunchem are more than twice that of the Gary plant and more than three times the costs of the Mexico plant. One important reason for such high costs for Sunchem is its waste treatment cost which is very high as compared to other plants. This can be attributed to the fact that it is the only plant with scrubbers for processing gaseous wastes.
Sunchem also has high direct labour, salary and fringes cost compared to other facilities. This is due to the severe labour laws and regulations in place in Japan, such as greater employee and license requirements. The utilities costs are also much higher.
The Mexico plant has the lowest operating