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Wriston Manufacturing

In: Business and Management

Submitted By albatross
Words 641
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Wriston Manufacturing Corporation

The Detroit plant of the Heavy Equipment Division is the central source of concern in the operations of the Automotive Supplier Group, primarily because of the following reasons :- * The plant has been producing only a residue of low-volume products. * Product variety has been incredibly high with two lines of products with their own families and models. * Although visibility is low in the company as a whole, the Detroit plant has a higher visibility due to the existence of the servicing facility for the company’s three product lines and the potential visits of customers who came to the head office which was situated in Detroit.

The usual implications of the above combination are high job repetition, less systemization and high unit costs.

The main reason for low profits out of the products in Detroit is a high total overhead burden rate (highest among all the plants in the group). On top of that, the development of the layout of the plant has been completely unplanned and haphazard, leading to deficiencies in the electrical system, water and fire sprinkler systems, and more importantly, storage and machine layouts.
Continued production with high overburden costs would only lead to very low investment on the plant (as investment on a plant is currently dependant on the plant’s return on assets) and in turn, poor motivation levels and performances of the employees in the plant.
Recommendations –
With 60% of the plant’s sales from on-highway axles and the remaining 40% from off-highway axles, * Production of all the on-highway axles should be transferred to one or more of Lebanon, Tiifin, Fremont, or the upcoming plant in Lancaster by allocating the different product families to the appropriate plant, so that there is a...

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