CASE APPLICHEM HBR

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CASE 3: APPLICHEM

1. Compare the performance of Applichem’s 4 Release-ease plants.

Competitive environment

Applichem is a company that offers high product customization. Indeed, they provide solutions to specific customer problems, and then refine the product and process to arrive at a product with broader application.
They created a product that was widely used: Release-ease. This product enabled the customers to clean easily the mold at the end of the process, which was a bottleneck in the former line. In 1982 the market research team expected little increase in the demand during the next five years. The sales and profit were strong through 1982. However Applichem has done little focused research on
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It shows us a very low performance in Sunchem factory, in spite of Frankfurt that has a much higher value.
Also, is possible to visualize on Error: Reference source not found the volume that results from the comparison of the total production and the total utility costs, and is possible to notice how big is the difference between the 4 Plants, once again showing that the Japanese plant has a much lower volume, and the Gary plant also, as its not supposed to be a streamlined operation, but to produce batch operations for research and specialty products.

Table – Productivity per Employee Mexico
Frankfurt
Gary
Sunchem
Total Workers
45
86
58
31
Production Volume
17,2
38
14
4

Volume Per Employee
0,382222
0,44186
0,241379
0,129032

Table – Volume per Utility Cost Mexico
Frankfurt
Gary
Sunchem
Production (million Lbs)
17.200.000
38.000.000
14.000.000
4.000.000
Total Utility Costs
12.012,00
11.116,00
19.365,00
36.675,00

Volume per Utility Cost
1.431,90
3.418,50
722,95
109,07

2. Why were some plants "better" performers than others?

In this analysis initially is possible to set two main characteristics to being evaluated: cost and productivity
Regarding costs, is possible to see in the Error: Reference source not found that the Mexico plant outperforms others in the area of labor costs (only $2.38/100 pounds),

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