Case Objective:
Applichem case brings the purpose to define whether or not the company, Applichem should keep the production line of Release-Ease within its plants or to relocate the production to another location:
• Gary (USA)
• Mexico City (Mexico)
• Frankfurt (Germany)
• Sunchem (Japan).
To define the scope, the cost analysis needs to be conducted to prove whether the business case of keeping the original production line of Release-Ease or relocating the production to another plant. Within the scope of the cost benefits, transportation and production cost differences must be considered.
Recommendations:
With analysis, it is recommended to continue the production at Gary Plant. Instead of deserting the facility due to it’s shortage …show more content…
The plant was built in 1952, so ROI has long been achieved assumption for a medium size plant is $20-$25 million, comparing to the cost of Gary Plant. Sunchem is the lowest productive plant showing the data at 50% of the Yearly yield of 2 million, where half of the cost by the Japanese partner. The market competitiveness is currently exclusive, however there is no confirmation as exposed to have the market open up to substitutes and competitors. In the past, Mexico plant was used to service Asia, so there is back-up coverage plan. As mentioned above, Frankfurt plant can be utilized as R&D and possible to relocation of Headquarter due to its central location, high capacity, high yield, and skilled workforce.
Advantages & Disadvantages of Release-Ease Plants:
• ADVANTAGES: o GARY
High Employee loyalty with low turnover rates:
• Employee show loyalty to AppliChem and their managers
• Shows how well Gary plant employees will react when new business plan and recommendation will be directed o FRANKFURT
38 million pounds of Release-Ease produced annually with 600 labor power
• Most productive AppliChem plant
Machinery Capital Equipment upgraded to increase capacity to produce Release-ease
• One installed between 1971 and 1974, the other one installed 1961
Employees created and implemented their own processes to improve the manufacturing process
Only …show more content…
Also, having All-hands meeting with the employees every quarter are recommended as well to share innovation and increase the globalization of the company together; all throughout the Supply Chain. To achieve the changes AppliChem is required to invest in locating internal property, plant, and capital equipment. Investment also need to include continuing training and educating its employees to adapt the new technology and be transparent with the current event internally, and in the future this will bring the cost down of the productivity with high educated trained
Applichem case brings the purpose to define whether or not the company, Applichem should keep the production line of Release-Ease within its plants or to relocate the production to another location:
• Gary (USA)
• Mexico City (Mexico)
• Frankfurt (Germany)
• Sunchem (Japan).
To define the scope, the cost analysis needs to be conducted to prove whether the business case of keeping the original production line of Release-Ease or relocating the production to another plant. Within the scope of the cost benefits, transportation and production cost differences must be considered.
Recommendations:
With analysis, it is recommended to continue the production at Gary Plant. Instead of deserting the facility due to it’s shortage …show more content…
The plant was built in 1952, so ROI has long been achieved assumption for a medium size plant is $20-$25 million, comparing to the cost of Gary Plant. Sunchem is the lowest productive plant showing the data at 50% of the Yearly yield of 2 million, where half of the cost by the Japanese partner. The market competitiveness is currently exclusive, however there is no confirmation as exposed to have the market open up to substitutes and competitors. In the past, Mexico plant was used to service Asia, so there is back-up coverage plan. As mentioned above, Frankfurt plant can be utilized as R&D and possible to relocation of Headquarter due to its central location, high capacity, high yield, and skilled workforce.
Advantages & Disadvantages of Release-Ease Plants:
• ADVANTAGES: o GARY
High Employee loyalty with low turnover rates:
• Employee show loyalty to AppliChem and their managers
• Shows how well Gary plant employees will react when new business plan and recommendation will be directed o FRANKFURT
38 million pounds of Release-Ease produced annually with 600 labor power
• Most productive AppliChem plant
Machinery Capital Equipment upgraded to increase capacity to produce Release-ease
• One installed between 1971 and 1974, the other one installed 1961
Employees created and implemented their own processes to improve the manufacturing process
Only …show more content…
Also, having All-hands meeting with the employees every quarter are recommended as well to share innovation and increase the globalization of the company together; all throughout the Supply Chain. To achieve the changes AppliChem is required to invest in locating internal property, plant, and capital equipment. Investment also need to include continuing training and educating its employees to adapt the new technology and be transparent with the current event internally, and in the future this will bring the cost down of the productivity with high educated trained