Fell Fab
INTRODUCTION
In December 1998, Glen Fell, President of Fell-Fab Products (FFP) of Hamilton, Ontario, was preparing his response to North American Airline (NAA), one of FFP’s important aircraft interior customers. Two months earlier, NAA had asked FFP whether it was interested in taking over complete management of NAA’s interiors. Although the proposal was financially promising, it represented a significant departure from FFP’s traditional business of interiors manufacturing. Now, after considerable study and discussions with NAA, Glen had to decide whether to FFP should accept the offer and, if so, how to implement it.
OVERVIEW
The Company
FFP was a family owned firm founded in 1952. Headquartered in Hamilton, Ontario, with plants in both Hamilton and Atlanta, its core business is the manufacturing of engineered textile products into specified patterns. Interior coverings account for 75% of its business, and a mix of other products ranging from military tents and vests to parts of microwave receiver dishes account for the remaining 25%. FFP seeks to diversify and expand its current business. The company considers tight materials management, communication with customers, and its ability to react quickly through manufacturing flexibility and technology to be among its core competencies. It also accredits its strengths in manufacturing to its experience, consistent product quality, and design capability. FFP has produced of interior coverings for NAA since 1965. Sales to NAA have increased throughout the years, and it currently supplies 35% of NAA’s cabin interior purchases. FFP’s annual revenues are approximately $27million. Despite success in managing its current internal production processes, the company experienced a 100% failure rate with its acquisitions, all of which were in the manufacturing industry. These failures were attributed to lack of experience in the companies’ differing production processes and FFP’s lack of knowledge on increasing the
In December 1998, Glen Fell, President of Fell-Fab Products (FFP) of Hamilton, Ontario, was preparing his response to North American Airline (NAA), one of FFP’s important aircraft interior customers. Two months earlier, NAA had asked FFP whether it was interested in taking over complete management of NAA’s interiors. Although the proposal was financially promising, it represented a significant departure from FFP’s traditional business of interiors manufacturing. Now, after considerable study and discussions with NAA, Glen had to decide whether to FFP should accept the offer and, if so, how to implement it.
OVERVIEW
The Company
FFP was a family owned firm founded in 1952. Headquartered in Hamilton, Ontario, with plants in both Hamilton and Atlanta, its core business is the manufacturing of engineered textile products into specified patterns. Interior coverings account for 75% of its business, and a mix of other products ranging from military tents and vests to parts of microwave receiver dishes account for the remaining 25%. FFP seeks to diversify and expand its current business. The company considers tight materials management, communication with customers, and its ability to react quickly through manufacturing flexibility and technology to be among its core competencies. It also accredits its strengths in manufacturing to its experience, consistent product quality, and design capability. FFP has produced of interior coverings for NAA since 1965. Sales to NAA have increased throughout the years, and it currently supplies 35% of NAA’s cabin interior purchases. FFP’s annual revenues are approximately $27million. Despite success in managing its current internal production processes, the company experienced a 100% failure rate with its acquisitions, all of which were in the manufacturing industry. These failures were attributed to lack of experience in the companies’ differing production processes and FFP’s lack of knowledge on increasing the