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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