Wriston Case

MBAS 841 – OPERATIONS MANAGEMENT |

Wriston Manufacturing Corporation Case Brief #3 |

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11/28/2011 |

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MEMO

To: Richard Sullivan

From: Team 411A

Date: 28 November 2011

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Subject: HED Detroit Plant

As per our analysis of the current situation at the Detroit plant, it is evident that the plant is suspected to be a prime candidate for closure because of its perception to be a high cost centre. We believe that if you accept our recommendations then the plan can be transformed and utilized to contribute to the growth of Wriston, achieving capacity efficiency (capacity/sales) of 85%. We suggest that you should stop production of “Group 3” products at the Detroit plant to reduce the number of production models down from 120 and follow the recommendations below to rid the plant of its current problems and transform it into a money making plant (see Exhibit 1).

ISSUES

Setup vs. Run Time - Due to the usage of old machinery to fulfill low volume product demands, the amount of setup time required at the Detroit plant is much higher as compared to the actual production time. The ratio of 10:1 for setup to production time is representative of the fact that the plant is being used to cater to ad hoc requests while utilizing old machinery. The company has not made any significant investment in the plant and as a result it is forced to use old inefficient machines.

Culture & Behavior – The workforce at the plant is highly polarized among the young and the old groups. There is also a feeling of neglect towards the employees, as the best product lines have been taken away from Detroit. The problems of absenteeism and turnover reflect the fact that the employees are not loyal to the plant and this feeling is further aggravated by little investment or attention into the plant from management.

Misaligned Costing Method - The Detroit plant is being benchmarked against the...