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Wriston Manufacturing Corporation Case Study Summary

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To: Richard Sullivan From: Team Odyssey Date: 15 January 1992 Subject: Detroit Plant- Heavy Equipment Division Wriston Manufacturing Corporation is loosing sales from last three years. This has put pressure on its HED to perform well. With nine plants on stream and tenth under construction, the management is scrutinizing the company’s investment proposals for these plants very carefully. The Detroit plant being the “low runner” of all plants demands a strong action towards its future. You have three options to decide from keeping overall aspect of the operations and environmental factors into consideration. The following memo will help you to identify the key issues and give recommendations to handle the situation. ISSUES Operational Inefficiency: The …show more content…

Sincerely, Team Odyssey Exhibit 1 – Options Areas of Concern Option 1 Option 2 Option 3 Financial Aspect Net loss of $2M – one time cost. Increase in annual cashflow: $4.9M to 5.6M; one time transferring cost of $25M Cost of upgrading,tool maintenance - $2M loss. On going performance lag on company - $4.64M Capital Intensive – Need $32M for building the new plant. Increase in annual cash flows : $3M Operational Aspect Products are transferred from job shop environment to batch shop. It does not address product process mismatch. A new manufacturing process can be achieved. Improved morale of employees Sales & Service No major change in direct sales but issues arising from loss of product support and service Support sales and product line The new manufacturing process will allow more cost effective solutions and low volume products Social Responsibility Ethical concern towards workers Defer the issue of closure; older workers will be retiring and then new workforce can be hired Tough transition for older employees to new processes. Exhibit 2 – Finances of Detroit

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