Comprehensive Analysis of Pyrex MBA6151 unit VIII PPT

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 a

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

 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

 American customers prefer excellent quality products

 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

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

ALTERNATIVES – 2nd

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

Nations US import and export duties

ALTERNATIVES – 2nd

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

 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

 Core competencies

 Capabilities

 Business Performance

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.