Wriston Manufacturing Corporation

Wriston’s Detroit plant is no longer a viable operation due to long-term capital underinvestment and product-process mismatch. It is recommended that the plant be phased out of operations over a five-year period with production and staff gradually shifted to a new plant to be built in the Detroit area. Further, it is also recommended that division accounting procedures and evaluation mechanisms be modified to allocate revenues/costs allowing for the synergistic benefits of Detroit’s products, and to recognize inherent manufacturing complexities, respectively. Issues Detroit’s production is unique when compared to other Wriston plants. Runs are typically lowvolume, involve significant set-up time, and vary significantly due to the sheer volume of different products lines, families and models. It is notable that the Detroit plant is the only plant manufacturing all three product lines: brakes, off-highway and on-highway axles; all other plants produce only a single product line. As seen by its area in Figure 1, manufacturing in Detroit is significantly more complex than other plant. Also notable in this figure are Detroit’s low return and relatively low sales figures. Capital investment has lagged in Detroit and the equipment is out-dated and inefficient. The general work environment is poor, with leaking pipes and old fixtures. Built in an ad-hoc manner, the layout of the Detroit plant is piecemeal; production typically requires complex flows

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through dedicated machining areas scattered about various buildings. Both the environment, and other factors seem to contribute to a poorly motivated workforce. Analysis If used prescriptively, Figure 1 would suggest Detroit and its products be divested, though Wriston’s study group report suggests some products may be profitable if transferred to alternate plants. Shown in Table 2 though, the burden rate for each of these potentially ‘profitable’ groups is well above normal, apparently reflecting the complexity and