ITM, KhargharOPERATIONS MANAGEMENT

CASE: Operations Strategy

Company B: As part of a drive to increase overall performance, a packing company undertook a major process investment. However in order to meet corporate return on investment norms, it was committed to increasing overall sales by some 40 per cent. However, entering price-sensitive markets with attendant high volumes and sales revenues could only make achieving these much higher sales. But its current markets were in the higher-quality segments and characterized by short lead times, fast customer response, low volume and high margins. The consequences were significant. Not only did the company now have almost 30 per cent of its total orders with distinct low-cost needs but it also had to meet the delivery speed requirement of the remainder. For the new markets, manufacturing needed to provide low-cost support for which it required, amongst other characteristics, long production runs and stable schedules. For its existing markets it needed to continue to offer short lead-time responses to customers, with manufacturing providing support for this with an ability to change production schedules whilst accommodating the disruption that this introduced. The ramifications were substantial. Almost overnight the process investments and attendance market shift had introduced manufacturing conflict in a large part of its total business.

Analyze the case w.r.t. folowing: What went right ? What went wrong ? What is the issue.