Comprehensive Analysis of Pyrex MBA6151 unit VIII PPT

MBA 6151 Operations Research GROUP 7: 256464 Nguyen Quyet Tien: Data Collector 256460 Le Viet Anh : Drafter 256463 Do Thi My Diu : Coordinator, Reviewer Comprehensive Analysis of Pyrex TABLE OF CONTENTS Introduction Situation Analysis Identification of the Problems Alternatives Recommendations Conclusion INTRODUCTION  World Kitchen - leading brand in the industry of household appliances and equipment manufacturers  Sub-brand name EKCO, Corelle, Corning ware, Chicago, etc  PYREX be recognized by nearly 80% of consumers SITUATION ANALYSIS - PEST  Political-legal Forces  The US Commerce Department rated quite high tariffs to ensure the business of domestic enterprises  Economic Forces  Schroeder et al (2013) pointed out that in 2006 the glass industry has recorded a decrease in profit, at 7%  The country has undergone cosmetic economic crisis, economic growth of just under 2% SITUATION ANALYSIS - PEST  Social-cultural Forces  American customers prefer excellent quality products  Technological Forces  Researched and developed products before the competitors on the market offer similar products  The manufacturer offers the perfect products for grilling, baking… SITUATION ANALYSIS - SWOT Strengths  A variety of production facilities in US and foreign countries  Excellent quality and advanced glass goods  Large market share over other competitors in glass industry  A wide selection of products SITUATION ANALYSIS - SWOT Weaknesses  Small profit margin while expensive production expenses For domestic facilities, the labor cost is exorbitant  Internal competition with other brand names under World Kitchen SITUATION ANALYSIS - SWOT Opportunities  Utilize the potential in overseas markets  Lower the production costs due to the inexpensive labor cost and reinforce its competitive edge SITUATION ANALYSIS - SWOT Threats  Weak law systems in other countries, especially in intellectual rights  Too much reliance on distributors can present potential risks associated with commissions PROBLEM IDENTIFICATION  Large amount of fixed costs for heating, furnace system  Costly to interrupt this process  The production cost was significantly high  The workforce contracts with the Labor Union at the Charleroi plant expired in 2006 at the same time of impending furnace ALTERNATIVES – 1st Remaining operations at the Charleroi plant  Make use of the current assets as to manage stock and logistics service  Continue domestic made goods as “Made in USA”  An increase of transactions and logistics expenses  Low profits and high expenditures in operations ALTERNATIVES – 2nd Supplier Location Cap Utilization Price per pound Shipment Lead time to WKI (days) Labor cost per hour A Australia 100 97% 0.795 0.0200 36 19.45 B Brazil 50 95% 0.765 0.0110 2.69 C China 70 88% 0.755 0.0180 30 0.92 D Thailand 65 85% 0.776 0.0180 33 1.19 E Italy 110 96% 0.785 0.0075 12 14.94 F Turkey 90 85% 0.760 0.0085 15 1.81 G Mexico 80 75% 0.825 0.0050 1.68 47 89% 0.930 0.0025 26.88 WKI Exhibit 1: Supplier Quotes (Schroeder et al., 2013) ALTERNATIVES – 2nd Nations US import and export duties Australia 18% Brazil 22,5% China 22,5% Thailand 22,5% Italy 22,5% Turkey 22,5% Mexico 4% Exhibit 2: Tariff-rate exceptions by country (Schroeder et al.,2013) ALTERNATIVES – 3rd Manufacturing plant in Mexico  Poor operating system and technical platforms  Take a long time to set up and operate efficiently  Intellectual property and quality control need to be controlled strictly  Working closely with sub-contractors RECOMMENDATIONS  Building a proficient warehouse and distribution network firstly in Mexico  Resolving the issue of compensations costs for labor  Liquidating all assets at Charleroi plant to increase the capital  Seeking a joint venture or a reliable partner in Mexico CONCLUSION  Situation Analysis  Core competencies  Capabilities  Business Performance  Identification of Problems  Further strategies  Appropriate plans for executing operations References Schroeder, R G., Goldstein, S M., & Rungtusanatham, M J (2013) Operations Management in the Supply Chain: Decisions and Cases, 6th ed New York, NY: McGraw-Hill Vestring, T., Rouse, T., Reinert, U., & Varma, S (2005) Making the move to low cost countries Boston, MA: Bain & Company  ... equipment manufacturers  Sub-brand name EKCO, Corelle, Corning ware, Chicago, etc  PYREX be recognized by nearly 80% of consumers SITUATION ANALYSIS - PEST  Political-legal Forces  The US Commerce... Analysis of Pyrex TABLE OF CONTENTS Introduction Situation Analysis Identification of the Problems Alternatives Recommendations Conclusion INTRODUCTION  World Kitchen - leading brand in the... economic crisis, economic growth of just under 2% SITUATION ANALYSIS - PEST  Social-cultural Forces  American customers prefer excellent quality products  Technological Forces  Researched and developed