Mabuhay Pumps Company

* Aside from maximizing profits, list the key factors that managers should consider when deciding whether or not to outsource offshore. Determine the key factors that you believe to be the most influential. Provide a rationale for your response.

To stay successful throughout the planning process and management of overseas operations, we have to work with leaders throughout the organization to identify events that may affect the achievement of our objectives and to determinate contingency plans or alternative solutions. We understand that the goal of operations management is to affect the entire cycle of a new product line in a positive manner (Chase, Jacobs & Aquilano, 2004), so we strive to take into consideration the addition of new resources, the rearrangement of existing resources, and the possible removal of resources to execute the strategic, intermediate, and short-term decisions made by overseas teams. To resolve the situation in Malaysia, we should consider at least two different options that both take into account a flat development expense and uniform unit cost wherever possible.

This case analysis explores the possibility of Breezy, a leading supplier of carburators and air filters in North America, the possibility of developing offshore busines in countries where car manufacturing is growing. The report is structured as follows: First, there are five important questions that Breezy must consider and ask itself before developing a relationship with a new customer. After Breezy decides to go offshore, it will have to go through the negotiating process, which involves five steps. Breezy then, must have capabilities of how an offshore business is organized, consider the many different costs and risks involved in the implementation and decide how it will finance the project. The report also talks

Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.

The Theory of Constraints indicates that excess capacity from ‘subordinate’ departments should be utilized to lessen the strain on the bottlenecked department. Until the constraint on production has been removed management should subordinate everything else to the constraint. The proposed action of outsourcing inspection from the coating and sharpening department will free-up more valuable direct labor hours in the area of constraint. A separate inspection station before the final stage of production should be added to the production process. An employee from the chemical bathing stage will be cross-trained to inspect products as needed for the brief periods of inspection required. Because the second process has been deemed subordinate to the area experiencing constraint its excess capacity can be utilized in a more valuable capacity. Each additional hour in the coating and sharpening process will result in a firm benefit of $1250, or the contribution margin per unit of constraint for the Model C210. The addition of an inspection

Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark

1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt

In analyzing the second reason listed for why outsourcing is used; ‘inability to attract the highest caliber of employees to job functions that may be peripheral to the organization’s core discipline’, companies employ a different kind of outsourcing tactic. This reason leads to offshore outsourcing solutions. If a company cannot attract high caliber domestic employees to job functions secondary to their main function then they seek help where labor may be less expensive and more efficient.

However, MacDowell Corporation believes that changing the relationship with San Fabian Supply Company will make it benefit more. On one hand, MacDowell has been marketing its products through an exclusive distributor only in the Philippines and the parent company wants to market the products same as in other countries. On the other hand, the demand for construction materials has decreased since the expansion of its plant in the Philippines before. MacDowell Philippines’ plant operating rate was very low, at only about 45% capacity, and the overcapacity plagued the company a lot. To get rid of this situation, MacDowell Philippines wants to increase sales and its new president believes that having more dealers can lead to more sales. So MacDowell wants to change the relationship with San Fabian Company in the

As the financial consultants of Catawba Industrial Company our aim is to determine the best course of action to pursue with respect to the introduction of the new proposed light weight compressor. This course of action must remain within the production capacity restrictions the company faces.

The Wilkerson Company is in the business of manufacturing valves, pumps, and flow controllers to sell to companies that manufacture water purification equipment. The company started out with a very unique and more efficient way of designing the valves and it was better than any of the other competition that also made valves. And this actually helped them establish a loyal customer base since they were so innovative and had the best quality at the time. They are looking for help since they are having issues with the decline in their company’s profits. The company wants to figure out exactly how and why their profits are as low as they are by reaching out to their controller and manufacturing manager. They want to seek additional help and

1- FlexCon should keep its family of pistons in-house. In fact, if it outsources its pistons, it will save money the first year- about $30,000 before tax and $18,000 after tax. However, the second year, Flexcon will lose a significant amout of money- about $124,200. Based on the case, “once a firm outsources an item or service, it usually loses the ability to bring that production capability or technology in-house without committing significant investment.” So, the savings brought by outsourcing the pistons manufacturing in the first year will not be useful because it will be used to cover a part of bringing the manufacturing back in-house. In addition, the company cannot keep the pistons manufacturing outsource because FlexCon will lose

The method showed that the pricing that was being used for the three products were not correct. The price at which the pumps were being sold was low were high whereas flow controllers were low. Because of which the most profitable product was coming out to be flow controllers whereas it was actually the least profitable.

They are a small, local company that assumingly delivers quality products on time and at the convenience of their buyer’s needs. While their relationship with CJI appears to have been professional and successful, they will not be able to continue to supply CJI with all of their bilge pumps once the demand reaches 50 pumps monthly. This situation forces them to consider their options which are: to expand their production capabilities or maintain their current production levels and risk losing their business with CJI.

Two locations were found to be appropriate for the plant, first is on Kimberly Street just a few blocks away from the main plant. Second being located in Hampton, which is small town around 180miles from the main plant. The Executives of the company decided that they will eventually require minimum of 75000 Square feet of floor space and 600 labors (300 Skilled, 150 Semi-Skilled, 150 Unskilled) so as to operate efficiently. The estimated cost of the machinery and equipment needed to manufacture the parts is around $2 Million and this requirement was met by the government by equipping them with government owned equipment under a contract.