Pelarsen Windows - Humans v. Robots
Case Study - Pelarsen Windows: Human v. Robots
Background
Pelarsen Windows is in its third generation, founded initially in 1922 by Gunnar Pelarsen and now run by granddaughter and CEO Ingrid Pelarsen. The 1990s was an era of craftsmanship. One of the noted success factors for Pelarsen Windows at the time was its transition from craft to mass production. Pelarsen was a mover in streamlining the windows manufacturing process by standardizing the various components, allowing windows to be assembled in larger volumes and at remote locations. Another one of its key success factors was its innovative products such as insulated glass, solar heating and cooling, and energy efficient windows. Due to its innovative capabilities, Pelarsen Windows had transformed glass from a commodity to a differentiating component of windows manufacturing. There are two main window types they produce; standard and architectural. Generally, sales offices decide the plants to assign orders to based on the available capacity, geographical proximity, and skill-level required. Pelarsen Windows now operates in 15 plants across North America, employs 10,000 employees and holds 34% of all windows manufacturing business in North America.
This case calls for an analysis of facts and recommendations on how the Texas plant can recover from the $6.34-million loss just experienced in 2007. What Plant Manager, Doug believes to be the cause of his loss is not necessary due to the lower volume of architectural window business. Another of his suggestions is to invest in more modern equipment. The analysis however shows that the higher costs of labor and an older facility also are also not the problem. A re-computation of cost data using ABC will reveal the flaws in Doug’s suggested recommendations.
Issues
The allocation of window business between the Oregon versus the Texas plant is the subject of concern for Texas Plant Manager, Doug Niedermeyer after incurring a $6.34 million loss in
Background
Pelarsen Windows is in its third generation, founded initially in 1922 by Gunnar Pelarsen and now run by granddaughter and CEO Ingrid Pelarsen. The 1990s was an era of craftsmanship. One of the noted success factors for Pelarsen Windows at the time was its transition from craft to mass production. Pelarsen was a mover in streamlining the windows manufacturing process by standardizing the various components, allowing windows to be assembled in larger volumes and at remote locations. Another one of its key success factors was its innovative products such as insulated glass, solar heating and cooling, and energy efficient windows. Due to its innovative capabilities, Pelarsen Windows had transformed glass from a commodity to a differentiating component of windows manufacturing. There are two main window types they produce; standard and architectural. Generally, sales offices decide the plants to assign orders to based on the available capacity, geographical proximity, and skill-level required. Pelarsen Windows now operates in 15 plants across North America, employs 10,000 employees and holds 34% of all windows manufacturing business in North America.
This case calls for an analysis of facts and recommendations on how the Texas plant can recover from the $6.34-million loss just experienced in 2007. What Plant Manager, Doug believes to be the cause of his loss is not necessary due to the lower volume of architectural window business. Another of his suggestions is to invest in more modern equipment. The analysis however shows that the higher costs of labor and an older facility also are also not the problem. A re-computation of cost data using ABC will reveal the flaws in Doug’s suggested recommendations.
Issues
The allocation of window business between the Oregon versus the Texas plant is the subject of concern for Texas Plant Manager, Doug Niedermeyer after incurring a $6.34 million loss in