Applichem

Measuring Multiple Facilities: Applichem (A) Abridged

Applichem is a global company with a network of

manufacturing facilities worldwide. The case considers the

allocation of manufacturing orders among the plants using

information about productivity and about exchange, inflation

and duty rates. Your task is to compare the plants and make

recommendations for allocating orders and evaluating plant

managers.

Questions:

1. Compare the performance (productivity, costs...) of

Applichem's Release-ease plants. Be prepared to discuss your

calculations.

2. Why were some plants “better” performers than others?

3. How would you advise Joe Spadaro to configure his

worldwide manufacturing system?

Case 2: Applichem

1) All six of the Applichem plants perform differently for

different reasons. The Frankfurt plant only operates at about

80% capacity, but is one of the best plants yield wise because

it is so big. The Frankfurt plant is very well managed because

they are able to produce 38 million pounds of Release-ease

with only 600 employees. The number of employees in the

Gary plant is over 1,000 and they only produce 14 million

pounds a year. The German plant also produces 11 additional

forms of the Release-ease, more than any other plant. Germany

is one of the strongest plants exporting over half of what they

produce.

The Gary plant is large and spends a great deal of its labor on

packaging the different sizes of Release-ease. The Gary plant

sells Release-ease in over 80 different packaging sizes. This is

the main reason they have so many employees compared to

most of the other plants. The other five plants only sell Releaseease in one or two sizes, which enable them to automate the

majority of the packaging process. The plant in Canada sells

100% of the Release ease they produce, making them the only

plant that does not import or export and Release-ease.

The Japanese plant is operated in a joint venture with a

Japanese firm. The Japanese plant...