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Pininfarina

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Submitted By SabyasachiG
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1. As Renato Bertrandi, what do you see as the most significant challenges facing Pininfarina over the next five years?

1. The company’s usual business practice is low volume high variety products.
Now in order to accept the Mistubishi proposal,it has to switch to high volume – low variety operation. This needs significant investment including machinery, space, manpower etc to meet the requirement.

2. Mistubishi would have its own quality standards which may be one-fourth the level of Pininfarina’s current customer’s. Definition of “defect” as per Mistubishi standards was not known. This would significantly impact quality standards and training would be required to facilitate such requirement.

3. Major components like the engine have to be imported from Japan either from Mistubishi plant or its approved suppliers. The supplier base had to be created for components sourced within Europe. These domestic suppliers have to audited and qualified by Mistubishi to meet their standard.

4. From the past experience the imported materials from Japan have an average shipping time of 13 days and an additional 3 days for clearance at Italian port. Hence adequate safety stock have to maintained to manage the uncertainties in demand and any unforeseen situation such strikes at port, shipment delay, etc so that the production is not affected

5. The additional manpower required is estimated at 600. At traditional ratio of direct to indirect workers,this meant 200-240 indirect works.However the indirect labors could be reduced for some operation while the others may not be. 6. Since the company has experience in low volume – high variety but not much in high volume-low variety, achieving operational experience by reducing waste, efficient planning, achieving customer satisfaction is also a daunting

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