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Jamestown

In: Business and Management

Submitted By arzin1990
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Jamestown Electric Supply Company is an electrical supplies company which designs, manufactures and supplies electrical equipment to various firms. It has been operating since 1962 (45 years from 2008). Its largest customer group is the automotive industry with revenue of over 10 billion worldwide. Jamestown’s automotive segment produces 55% of the firm’s gross sales. Jamestown continues to invest mostly in research and development of automotive technology as it is known for supplying its customers with the best and latest technology and has to keep up with the quick advancing of technology in the automotive industry in order to succeed. Some of its products include wiring harnesses, headlight systems etc.
In order to compete with competitors Jamestown has services that include overnight delivery of electronic products, JIT inventory deliveries to client plants and warehousing of client parts until they are needed. These services are very attractive to customers and have caused sales to increase, but management has observed that the profits are not moving at the same pace as the sales growth. Thus management decided to prepare a customer profitability analysis chart for a few customers in order to see if they can know which customers are the most profitable and which are the least. An evaluation of production, marketing, distribution and customer support was prepared by the executive team in order to know the reason for shrinking profits.
In n annual Board of Directors meeting, the board members decided to evaluate the efficiency of the initial profitability system and what is actually causing the shrinking profits. The head of manufacturing was blamed for the increasing costs of direct labor. His rebuttal was, the labor costs were due to the marketing teams ‘unrealistic rush orders’ which caused workers to have to work overtime and increased labor costs. The...

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