Shipper Manufacturing Company Case Study
Shipper Manufacturing Company Case Study is an operation strategy's case. Wallace is a general manager of APD who has made a decision to propose the changing strategy. In order to apply the new advanced strategy, the company is concerned about cost, delivery, quality and flexibility. Thus, the company will need to adopt new objectives: to shift from low-volume to high-volume production , and from the custom designed product to the high quality manufacturing designed product.
1.1. What objectives should be adopted in manufacturing with respect to cost, delivery, quality and flexibility.
Cost - With the old strategy, ADP produced products on demand which meet the customers requirements, so it was able to pass its high cost to customers by charging high prices. The new business strategy will not allow ADP to do the same thing. Producing concurring high-volume products will increase ADP's competitors. As the new market is more competitive, ADP will have the pressure the reduce its prices in order to increase sales. As a result of lower prices, the Division needs to focus on reducing cost to generate the desired profit.
Delivery - Due to the more competitive market, ADP has to improve its delivery system to provide better services and attract new customers. The Division needs to reduce the delivery time down and better manage inventories to predict inventory needs. A new automatic system of delivery control and inventory control is suggested to replace the current manual system. In addition, The Division needs to set delivery time objectives. Quality - The Division should maintain its strong commitment to quality which will give them a competitive advantage in the new market.
Flexibility - Since ADP decides to change from on-demand product production to concurring high-volume product production, it reduces its flexibility in meeting customer's demand. However, flexibility relates to time improvements. By improving time, the APD could potentially
1.1. What objectives should be adopted in manufacturing with respect to cost, delivery, quality and flexibility.
Cost - With the old strategy, ADP produced products on demand which meet the customers requirements, so it was able to pass its high cost to customers by charging high prices. The new business strategy will not allow ADP to do the same thing. Producing concurring high-volume products will increase ADP's competitors. As the new market is more competitive, ADP will have the pressure the reduce its prices in order to increase sales. As a result of lower prices, the Division needs to focus on reducing cost to generate the desired profit.
Delivery - Due to the more competitive market, ADP has to improve its delivery system to provide better services and attract new customers. The Division needs to reduce the delivery time down and better manage inventories to predict inventory needs. A new automatic system of delivery control and inventory control is suggested to replace the current manual system. In addition, The Division needs to set delivery time objectives. Quality - The Division should maintain its strong commitment to quality which will give them a competitive advantage in the new market.
Flexibility - Since ADP decides to change from on-demand product production to concurring high-volume product production, it reduces its flexibility in meeting customer's demand. However, flexibility relates to time improvements. By improving time, the APD could potentially