The California-Illini Manufacturing Company's (Ci) Essay

917 WordsNov 17, 20104 Pages
The California-Illini Manufacturing Company's (CI) Q1. What is the firm's competitive strategy? Does the strategy seem appropriate? In the strictest sense, competitive strategy refers to how a company can gain a competitive advantage through a market while finding a distinctive way of competing. California-Illini Manufacturing Company is able to compete in the Global industry because they are handmade tillage and cultivating tools and they are American made; they use expensive metal pieces and are hand metal forged, along with using manual electric arc welders. There is in most every market the opportunity for handmade products, for example Lamborghini cars are hand made vehicles, which are more expensive, but because of the extensive…show more content…
The company decided to remain loyal to their old performance cost system instead of taking an alternative approach which may have helped CI. The process seems to be broken and they are just blindly following the approach to measuring performance. The cost reduction strategy seemed to be well meaning, and had the opportunity for success BUT, CI was chained to old ideas and old ways of thinking, past successes don’t always ensure future success. Q4. What is the role of work-in-process in the cost reduction strategy? The work-in process was important in the implementation of the cost reduction strategy. In General, there are three stages of cost of goods: Raw materials, work-in-process inventory, and finished goods. The cost of each stage includes materials cost, labor cost, and overhead. The cost reduction strategy needs to cut the cost from every stage. Work-in-process is very important. There are always many steps during work-in-process, such as setup and Assembly. We can cut cost by using economic sizes, shorting routine time, and decreasing variances. In this case, the company planned to increase batch sizes to improve productivity. The short-time result was impressive because plant efficiency measures rose about 15%. But it also caused some negative effects. In order to improve efficiency measures, departments kept processing large lots regardless of current demand. It brought much storage expense, overtime

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