Case study notes
Preparing for ADM1301 Mid-Term Examination: A Case Study
McClean Manufacturing Inc. (MMI) is fabricating micro chips for HD television sets under licence from a large Korean corporation. MMI is located in a small town in New-Brunswick. MMI employs
1260 persons in this community of 8764 inhabitants. MMI is the principal economic activity and the largest employer in town. The majority of families and local businesses depend on it.
MMI’s financial condition just allows it to keep the plant operating. MMI is barely profitable. Its sustainability over the past decade required very stringent cost management. Intense international competition, evolving technology and newer environmentally friendly manufacturing processes are added pressures on MMI. Its survival and long-term prosperity largely depend on new investment that MMI can hardly see coming from its own revenues.
A chemical known as ASTOGO is used to clean the micro chips. The cleaning residues become highly toxic, particularly to birds, fish and other marine life. Proper disposal of the toxic residues requires that they be shipped to the only two licensed disposal sites: one in Western Canada and one in the southern United States.
The disposal of the toxic waste is costly and requires transporting the waste daily by special trucks to a railroad station 243 km away. The waste is subsequently shipped by rail to the licensed disposal sites, a minimum of 4758 km away. MMI can no longer afford to continue with this waste shipment strategy. This significant financial drain will lead MMI to bankruptcy within 2 years if it continues.
Within 1 km of MMI’s facilities lies a river near a preserved wetland. This river was declared dead by biologists a decade ago because of toxic discharge from a military installation located five miles upstream from MMI. Joe Lui Morgan, the CEO, felt that MMI would not necessarily be acting irresponsibly by discharging its toxic waste into the river since it is already
McClean Manufacturing Inc. (MMI) is fabricating micro chips for HD television sets under licence from a large Korean corporation. MMI is located in a small town in New-Brunswick. MMI employs
1260 persons in this community of 8764 inhabitants. MMI is the principal economic activity and the largest employer in town. The majority of families and local businesses depend on it.
MMI’s financial condition just allows it to keep the plant operating. MMI is barely profitable. Its sustainability over the past decade required very stringent cost management. Intense international competition, evolving technology and newer environmentally friendly manufacturing processes are added pressures on MMI. Its survival and long-term prosperity largely depend on new investment that MMI can hardly see coming from its own revenues.
A chemical known as ASTOGO is used to clean the micro chips. The cleaning residues become highly toxic, particularly to birds, fish and other marine life. Proper disposal of the toxic residues requires that they be shipped to the only two licensed disposal sites: one in Western Canada and one in the southern United States.
The disposal of the toxic waste is costly and requires transporting the waste daily by special trucks to a railroad station 243 km away. The waste is subsequently shipped by rail to the licensed disposal sites, a minimum of 4758 km away. MMI can no longer afford to continue with this waste shipment strategy. This significant financial drain will lead MMI to bankruptcy within 2 years if it continues.
Within 1 km of MMI’s facilities lies a river near a preserved wetland. This river was declared dead by biologists a decade ago because of toxic discharge from a military installation located five miles upstream from MMI. Joe Lui Morgan, the CEO, felt that MMI would not necessarily be acting irresponsibly by discharging its toxic waste into the river since it is already