Comprehensive Analysis of Pyrex MBA6151 unit VIII PPT

MBA 6151
Operations Research
GROUP 7:
256464 Nguyen Quyet Tien: Data Collector
256460 Le Viet Anh

: Drafter

256463 Do Thi My Diu

: Coordinator, Reviewer


Comprehensive
Analysis of Pyrex


TABLE OF CONTENTS
1.

Introduction

2.

Situation Analysis

3.

Identification of the Problems

4.

Alternatives

5.

Recommendations

6.

Conclusion


INTRODUCTION
 World Kitchen - leading brand in the industry of household appliances
and equipment manufacturers.

 Sub-brand name EKCO, Corelle, Corning ware, Chicago, etc.
 PYREX be recognized by nearly 80% of consumers


SITUATION ANALYSIS - PEST


Political-legal Forces



The US Commerce Department rated quite high tariffs to ensure the business of
domestic enterprises



Economic Forces



Schroeder et al. (2013) pointed out that in 2006 the glass industry has recorded a
decrease in profit, at 7%.



The country has undergone cosmetic economic crisis, economic growth of just under
2%


SITUATION ANALYSIS - PEST
 Social-cultural Forces
 American customers prefer excellent quality products

 Technological Forces
 Researched and developed products before the competitors on the market
offer similar products.

 The manufacturer offers the perfect products for grilling, baking…


SITUATION ANALYSIS - SWOT
Strengths



A variety of production facilities in US and foreign countries



Excellent quality and advanced glass goods



Large market share over other competitors in glass industry



A wide selection of products


SITUATION ANALYSIS - SWOT
Weaknesses



Small profit margin while expensive production expenses. For domestic
facilities, the labor cost is exorbitant



Internal competition with other brand names under World Kitchen


SITUATION ANALYSIS - SWOT

Opportunities



Utilize the potential in overseas markets



Lower the production costs due to the inexpensive labor cost and
reinforce its competitive edge


SITUATION ANALYSIS - SWOT
Threats



Weak law systems in other countries, especially in intellectual rights.



Too much reliance on distributors can present potential risks associated
with commissions.


PROBLEM IDENTIFICATION
 Large amount of fixed costs for heating, furnace system
 Costly to interrupt this process
 The production cost was significantly high
 The workforce contracts with the Labor Union at the Charleroi plant

expired in 2006 at the same time of impending furnace


ALTERNATIVES – 1st
Remaining operations at the Charleroi plant



Make use of the current assets as to manage stock and logistics service



Continue domestic made goods as “Made in USA”



An increase of transactions and logistics expenses



Low profits and high expenditures in operations


ALTERNATIVES – 2nd
Supplier

Location

Cap

Utilization

Price per pound

Shipment

Lead time to WKI (days)

Labor cost per hour

A

Australia

100

97%

0.795

0.0200

36

19.45

B

Brazil

50

95%

0.765

0.0110

8

2.69

C

China

70

88%

0.755

0.0180

30

0.92

D

Thailand

65

85%

0.776

0.0180

33

1.19

E

Italy

110

96%

0.785

0.0075

12

14.94

F

Turkey

90

85%

0.760

0.0085

15

1.81

G

Mexico

80

75%

0.825

0.0050

4

1.68

47

89%

0.930

0.0025

1

26.88

WKI

Exhibit 1: Supplier Quotes (Schroeder et al., 2013)


ALTERNATIVES – 2nd
Nations

US import and export duties

Australia

18%

Brazil

22,5%

China

22,5%

Thailand

22,5%

Italy

22,5%

Turkey

22,5%

Mexico

4%

Exhibit 2: Tariff-rate exceptions by country (Schroeder et al.,2013)


ALTERNATIVES – 3rd
Manufacturing plant in Mexico

 Poor operating system and technical platforms
 Take a long time to set up and operate efficiently

 Intellectual property and quality control need to be controlled
strictly

 Working closely with sub-contractors


RECOMMENDATIONS
 Building a proficient warehouse and distribution network firstly in
Mexico

 Resolving the issue of compensations costs for labor
 Liquidating all assets at Charleroi plant to increase the capital
 Seeking a joint venture or a reliable partner in Mexico


CONCLUSION
 Situation Analysis
 Core competencies
 Capabilities
 Business Performance

 Identification of Problems
 Further strategies
 Appropriate plans for executing operations


References
Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations Management in the Supply
Chain: Decisions and Cases, 6th ed. New York, NY: McGraw-Hill.
Vestring, T., Rouse, T., Reinert, U., & Varma, S. (2005). Making the move to low cost countries. Boston, MA:

Bain & Company.