Sound Dynamics, Inc.(Mcs Case)
Management Control System | Case Study 9-1 | Sound Dynamics, Inc. | ID-09-058 | Mohammad Shakhawat Hossain | 4/8/2010 |
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Introduction and Case History:
Sound Dynamics was a US-based international manufacturer of audio recording equipment, including consumer and commercial lines. Annual sales volume was approximately $1 billion (US) and total employment had passed the 10,000 mark. Sound Dynamics was organized in three sectors, commercial, consumer, and International. The international sector was composed of subsidiaries in 20 countries that distributed Sound Dynamics products throughout the world.
Reichard Produkten, GmbH, located in Munich, was one of the larger subsidiaries in the sector. It produced commercial components and supplies for distribution throughout Western Europe.
San Remo was located in the German-speaking region of Northern Italy, near the Austrian border. The San Remo factory was converted from commercial component manufacturing to consumer components for all of the EC market.
During the last quarter of 1989, the Reiched Produkten and the San Remo consolidated their commercial products manufacturing and related activities. A major reason for the, consolidation of manufacturing activities was to achieve scale economies wherever possible. There had been an anticipated annual saving in Reichard's production control department, for example, of $184,000 from a reduction in the number of salaried personnel by 12 through eliminating duplicate jobs. There also had been an expected saving from computerization of production scheduling and control.
Prior to consolidation, the San Remo subsidiary had been using a computerized scheduling and control system, whereas Reichard had been using a manual system. In December 1989, a study was made to
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Introduction and Case History:
Sound Dynamics was a US-based international manufacturer of audio recording equipment, including consumer and commercial lines. Annual sales volume was approximately $1 billion (US) and total employment had passed the 10,000 mark. Sound Dynamics was organized in three sectors, commercial, consumer, and International. The international sector was composed of subsidiaries in 20 countries that distributed Sound Dynamics products throughout the world.
Reichard Produkten, GmbH, located in Munich, was one of the larger subsidiaries in the sector. It produced commercial components and supplies for distribution throughout Western Europe.
San Remo was located in the German-speaking region of Northern Italy, near the Austrian border. The San Remo factory was converted from commercial component manufacturing to consumer components for all of the EC market.
During the last quarter of 1989, the Reiched Produkten and the San Remo consolidated their commercial products manufacturing and related activities. A major reason for the, consolidation of manufacturing activities was to achieve scale economies wherever possible. There had been an anticipated annual saving in Reichard's production control department, for example, of $184,000 from a reduction in the number of salaried personnel by 12 through eliminating duplicate jobs. There also had been an expected saving from computerization of production scheduling and control.
Prior to consolidation, the San Remo subsidiary had been using a computerized scheduling and control system, whereas Reichard had been using a manual system. In December 1989, a study was made to