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Case Study: Shipper Manufacturing

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Case study: Shipper Manufacturing

1.1. What objectives should be adopted in manufacturing with respect to cost, delivery, quality and flexibility?

In order for the Advanced Products division (ADP) of Shipper to match its new business strategy, the company will need to adopt new objectives. Shipper will gradually shift from a low-volume, custom designed product to a high-volume, continuous product.

The current products are 100% customer designed, therefore allowing Shipper to pass most of the production cost to the customer. The new products will be manufacture designed and could affect ADP's profits. The price could likely be an order winner for customers, as the company will likely have more competition as they move towards a higher-volume continuous product. Shipper will need to address and improve their inventory and production control if they intend to be competitive in the new market. The current situation is manual and difficult to maintain. As the business grows, Shipper will need to cut their delivery time down and better predict inventory needs. As part of Shipper's new business strategy, they have emphasized that they will continue respond to individual customer design requirements. Shipper's strong commitment to quality should give them a competitive advantage in the market as they maintain and build relationships with customers. As Shipper moves away from custom designed products, the flexibility for customers will decrease. Shipper will become more market focused and will reduce APD's dependence on customer specified products and projects.

1.2. How should the objectives in manufacturing be achieved through process, organization, equipment, workforce, capacity, scheduling, quality management, and production and inventory control systems?

The Advanced Products division new business strategy is to create high- volume products and expand their customer base. This strategy will require the division to change their current manufacturing strategy. As part of ADP's strategy, it will maintain its low-capitol, high-labor-intensive character, and focus on product development. These choices will result in trade-offs for achieving the business objectives.

Process/equipment-ADP's desire for a higher-volume, standard, quality product will require automation and new equipment. Currently the process is low volume, custom designed, and highly labor-intensive. To keep production errors and unnecessary re-work at a minimum, ADP will be faced with a trade-off of moving towards automation and a less labor-intensive environment. The equipment will need to be placed according to the flow of the product, with standard work for all employees to follow.

Organization- Shipper maintains that it will continue to respond to individual



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