Copeland Corporation: Manufacturing in China (Abridged)

Abstract

This case describes the start-up of a new manufacturing facility in China that serves the China market, previously served by a field sales force and imported products. Its plant, which incorporates state-of-art manufacturing technology, attains world-class status in manufacturing shortly after start-up, but increased competition and sales stagnation in the China market offer new challenges. This case is designed for courses in operations stategy or international business and can be used to illustrate issues associated with plant start-ups in China and issues related to marketing and manufacturing interaction. Excerpt UVA-OM-1311 Rev. Jan. 15, 2014 Copeland Corporation: MANUFACTURING IN CHINA (ABridged) As Steve Stewart left the Asia headquarters of Emerson's Copeland division for the annual strategy meeting, he went over his notes on the service factory concept once more. In just a few minutes, he would be making a presentation on how the new Suzhou, China, factory could be used as a “competitive weapon,” but he realized that he faced organizational skepticism and even some opposition. Like any other new initiative, adopting the service factory concept would require organizational changes that threatened other departments, especially the sales team, and Stewart was not sure how to overcome those barriers. Stewart, currently the vice president and general manager of Asia operations, had been developing the service factory concept as a manufacturing response to the changing nature of competition in Asia. Opened in June 2000, the Suzhou plant was under tremendous pressure to offer lower prices and faster delivery. Copeland was also finding itself in direct competition with several Japanese compressor manufacturers with good manufacturing processes, high quality, short lead times, and good costs. In order to keep Copeland competitive in a strategically important region, the company had to go beyond these “tickets-to-play,” and “take a total value stream approach to eliminate non-value-added activities from the value stream,” and offer true manufacturing partnerships and consulting services. The ability of the Suzhou plant to compete as a service factory was based on three interrelated elements. First and foremost was the successful ramp-up of the factory. Using a combination of tried-and-true manufacturing processes outlined in Copeland's Plant Technology Franchise, Stewart and Eddie Turrentine, the general manager of the Suzhou plant, had already turned the first Copeland factory in China into a world-class manufacturing plant. In less than one year from the plant's opening in June 2000, Suzhou had achieved the highest quality ratings of any Copeland plant in the world and had successfully passed Copeland's exacting plant audit procedures. . . .