Lean Wausau Equipment Company (A)

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DardenBusinessPublishing:212105 UVA-OM-1354 Rev. Mar. 1, 2010 This document is authorized for use only by Haiying Yang at university of Texas at Dallas. Please do not copy or redistribute. Contact permissions@dardenbusinesspublishing.com for questions or additional permissions. WAUSAU EQUIPMENT COMPANY: A LEAN JOURNEY (A) History and Business Background Ashford Elevator Company was founded in 1946 in a small midwestern town. Its first products were grain elevators, sold to local co-ops and farms. Started as a small shop with five workers, the company, which quickly grew to include 50 employees, began engineering, manufacturing, and servicing a variety of machinery and equipment for the agribusiness industry. The company changed its…show more content…
Most breakdowns received the shortterm, band-aid treatment; so consequently, equipment downtime continued to increase, contributing to the run-to-failure mentality. At times, labor management relations were strained, and union organizers met strong resistance. Leadership at the top was also slow in recruiting younger executives; there was little interest in succession planning and other career-development processes. The Lean Journey Beginning Late in 2000, WECO’s executive board gathered for its annual business-strategy meeting at a nearby lake resort. The last year had seen a 10% decline in operating profits due to the high cost of labor and materials, flat revenues because of resistance to price increases, and increased competition in both domestic and foreign markets. In addition, work-in-process and finished goods totaled almost 30 million, a five-year high. There was considerable concern that, for the first time in memory, company market share could drop from 35% as its principal competitive advantage—although a highly engineered and reliable system, it was no longer the key factor driving sales. Other factors had become important, among them shorter lead times (a steady decrease during five years, from between 16 and 22 weeks to 10 and 12

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