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Michigan Manufacturing Corporation

In: Business and Management

Submitted By nikhilmajhi
Words 2030
Pages 9

Ist Case Submission


Michigan Manufacturing Corporation:

The Pontiac Plant

Submitted on

12th July 2013

Submitted by

Group 13

Nikhil Majhi 1111045

Overview of Michigan Manufacturing Corporation:

Michigan Manufacturing Corporation's Heavy Equipment Division (HED), headquartered in Pontiac is a large scale manufacturer of axles (both on-highway and off-highway applications) and brakes. The division has been underperforming and has been under the corporate radar regarding its long term alignment with the company’s long term business strategy. As of 1987, the division has 9 plants operating on-stream, and 1 (Fremont) under construction.

The complexity of the products manufactured could be measured based on 3 categories:

i. Product line (on-highway axles, off-highway axles, and brakes),

ii. Product families, and

iii. Product model.

The Pontiac plant operates two product lines. It manufactures the low volume product families that include parts for new products and replacement parts for all old products to support its past customers. Based on the corporate strategy, it had been decided that as the demand for a new product being manufactured at Pontiac grows, the production shall be transferred to a new plant having requisite economies of scale and available capacity.

As of 1987, the key factors that possibly have contributed to underperformance at the Pontiac plant are:

• Investment: Due to the existing corporate policy, the company tended reward plants showing the highest demonstrated rates of return by increasing the fund. On the other hand, Pontiac producing low volume dying products had negative return, thus it was unlikely for it to receive new investment and funding. • M/C tools: Most of the…...

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