Fisher Manufacturing Company (A)

Abstract

Dorothy Hoffman, plant manager for the Clarksburg, Virginia, location of Fisher Manufacturing Company (Fisher), had a problem: her plant was repeatedly failing to improve its dismal performance when it came to meeting shipping dates. Only 60% of its June shipments had met the well-established four-week service standard of the coated-abrasives industry. She knew that an investment of $8 million in new equipment would provide a significant reduction in setup times for a major portion of Fisher's production process, but she also knew that the board of directors would need more than just her faith that the investment was worthwhile. She needed hard numbers to justify a recommendation.The case can be used to show the benefits of production flexibility through an increase in capacity by setup-reduction efforts. By reducing setup time, smaller batches may be produced, allowing Fisher to be more responsive to the market while lowering its inventory investment. Excerpt UVA-OM-1598 Jul. 5, 2018 Fisher Manufacturing Company (A) Dorothy Hoffman, plant manager for the Clarksburg, Virginia, location of Fisher Manufacturing Company (Fisher), angrily tossed the monthly shipping report back onto her desk and swore under her breath. The Clarksburg plant had again failed to improve its dismal performance when it came to meeting shipping dates. Only 60% of its June shipments had met the well-established four-week service standard of the coated-abrasives industry. Hoffman knew that prompt customer service was necessary to maintain Fisher's competitive position in the industry, but so far, she had seen little improvement in this aspect of the plant's performance. Hoffman was considering the possibility of replacing some of the plant's equipment in hopes of meeting the customer-service targets. An investment of $ 8 million would provide a significant reduction in setup times for a major portion of Fisher's production process. Hoffman knew the board of directors would need more than just her faith that the investment was worthwhile. She needed hard numbers to justify a recommendation. Company Background Fisher was a leading producer of abrasives, including such products as sandpaper and grinding wheels. Industrial firms were the company's primary market. Fisher had four manufacturing plants in the midsouthern and southeastern United States. Fisher's Clarksburg plant produced all of the company's coated-abrasive products—a line consisting of approximately 5,000 finished items in numerous grades, shapes, and sizes. The Clarksburg plant had $ 126.5 million in annual sales, giving it an 18% share of the US coated-abrasives market and making Fisher the third largest of the four major domestic producers. . . .