SleepMore Manufacturing Case
Project Risk and Cost Management
Case Study
Sleep More Mattress Manufacturing: Plant Consolidation
Group Members: Divya Yadav, Lamia Nafees, Ashwin Chadaga, Deeshanu Sharma
EXECUTIVE SUMMARY:
Sleepmore mattress is one of the leading manufacturers of mattresses and has recently acquired its competitor. This acquisition has brought in a unique proposition wherein the company has to decide if it wants to consolidate the existing plants with the acquired plants or let them both run separately. This poses a unique administrative challenge to the president of the company. The president knew that calculating the dollar savings due to the consolidation of the facilities will be easy but considering the qualitative factors before making the decision will be difficult. Hence, The President of the company asked W. Carl Lerhos, his chief assistant to come up with a plan to simplify the decision of choosing between consolidating the facilities or running them separate.
Carl chose three major factors in evaluating the consolidation plan. They were maximize manufacturing benefit, maximize sales benefit and maximize direct financial benefit. These three objectives were to be evaluated against 13 criteria, which Carl arrived upon after discussing with the management. These 13 attributes were assigned a value from 0 to 10 against each plant being considered for consolidation. Through these measurements quantitative terms such as Annual savings, Plant location, Space availability and Initial Cost were quantified. But for assigning weights to the remaining qualitative terms, Carl had to rely upon his meeting with President, Vice President of Operations and Vice President of Human Resources. Based on their inputs Carl arrived at the below weights.
Based on President’s input Annual Savings will be twice the weight given to Plant Size.
Labor is twice the weightage of the average of all the thirteen attributes.
Quality and Service will be weighed more than
Case Study
Sleep More Mattress Manufacturing: Plant Consolidation
Group Members: Divya Yadav, Lamia Nafees, Ashwin Chadaga, Deeshanu Sharma
EXECUTIVE SUMMARY:
Sleepmore mattress is one of the leading manufacturers of mattresses and has recently acquired its competitor. This acquisition has brought in a unique proposition wherein the company has to decide if it wants to consolidate the existing plants with the acquired plants or let them both run separately. This poses a unique administrative challenge to the president of the company. The president knew that calculating the dollar savings due to the consolidation of the facilities will be easy but considering the qualitative factors before making the decision will be difficult. Hence, The President of the company asked W. Carl Lerhos, his chief assistant to come up with a plan to simplify the decision of choosing between consolidating the facilities or running them separate.
Carl chose three major factors in evaluating the consolidation plan. They were maximize manufacturing benefit, maximize sales benefit and maximize direct financial benefit. These three objectives were to be evaluated against 13 criteria, which Carl arrived upon after discussing with the management. These 13 attributes were assigned a value from 0 to 10 against each plant being considered for consolidation. Through these measurements quantitative terms such as Annual savings, Plant location, Space availability and Initial Cost were quantified. But for assigning weights to the remaining qualitative terms, Carl had to rely upon his meeting with President, Vice President of Operations and Vice President of Human Resources. Based on their inputs Carl arrived at the below weights.
Based on President’s input Annual Savings will be twice the weight given to Plant Size.
Labor is twice the weightage of the average of all the thirteen attributes.
Quality and Service will be weighed more than
References: 1. https://en.wikipedia.org/wiki/Analytic_hierarchy_process 2. Sleepmore Mattress Manufacturing Plant Consolidation, Darden Business Publishing, UOV