University of Michigan Business School - Entertainment, Media & Sports
Club
Getting
Started
The
Process
About
An
Ohio Injection Molder
Company
Private company; founded in 1929; 200 employees.
Serves numerous non-automotive markets with
low- and medium-volume runs.
Situation
Injection molding business is very sensitive
to labor and overhead costs.
The entire US industry challenged by fierce
competition from abroad (China, Mexico and Taiwan), coupled with
an economic slowdown at home.
Company discontinued unprofitable mold-building
operations in 2004.
Was forced to significantly cut workforce
in 2004 and 2005 due to decreased revenues from key accounts.
Sought assistance from GLTAAC in May 2005.
Approach
Company had a well diversified client base,
but GLTAAC identified several key problems and weaknesses within
the firm.
Inadequate marketing knowledge and aptitude.
Lack of comprehensive short- or long-term
business plans.
Excessive inventories, inconsistent production
scheduling methods and low capacity utilization.
Bidding process not linked to internal cost
accounting, with low success rate.
Recovery strategy is for the firm to generate
more business through marketing initiatives, plus to enhance profitability
through improvements to its cost accounting, bidding process, and
manufacturing operations. To accomplish this, the Adjustment Plan
(AP) includes several TAA projects -
Marketing and sales planning
Strategic planning
MRP system improvement, expansion,
and integration
Efficiency improvements
through lean initiatives
Actions
AP was approved in September 2005; firm
began to implement immediately.
A comprehensive market research/strategic
planning project started in May 2006.
Status
Project still ongoing. Scheduled for completion
in September.
To support this effort, a product launch
plan is being developed (wholly paid for by the firm), to assess
a major new opportunity.
The company is building a solid foundation
for long-term growth.
