Southern Discomfort
Autor: tsummers2k • September 14, 2013 • Research Paper • 777 Words (4 Pages) • 990 Views
Southern Discomfort, Assignment 4
Todd W. Summers
Modern Management- MGT 500
Dr. Kyle Peacock
Strayer University
June 2, 2013
In today’s economy companies must remain innovative to maintain sustainability. Internal and external stakeholders are affected when companies take a loss. If the cost of operating is larger than or fairly equal to earnings, than the business will fail. Businesses can fail for a number of reasons such as poor planning, lack of operating goals, failure to understand the industry and the needs of the customers, no means of attracting customers, and finally not understanding the competition.
Analyze and describe the issues faced by Malescowski and the company
Jim and Lamprey Inc. face a number of issues. 1) The labor cost at the Oconomo, Mexico plant is too high to sustain business. The employees are making $16 per hour in an area where the average wage is $1.60 (Daft R. 2010). 2) Competitors are making the same product for a better price and with better quality. Basically losing business can put you out of business. 3) The union is being resistant to the option of lower wages. 4) Jim does not want to be morally responsible for the plant closing. He feels there is still hope if the plant can lower cost.
Describe a strategy for changing things that would help resolve the situation
The first and one of the most important things that Lamprey, Inc. needs to do is get back to knowing the customers and obtaining a competitive advantage. Being able to successfully predict and satisfy the needs of customers and future costumers is important. The company must establish core competencies to satisfy customer needs.
The company needs to learn how to better control production cost by maintaining tight control over production and overhead cost (Holstein W. 2008). Measure the difference between operating cost and capital. Make the product right the first time without diversions and reapplications. You can also cut cost by lowering inventory on hand. Also Lamprey needs to make sure that they are giving the Mexico facility products that are better suited for their plant and work force to improve efficiency. For example Noranda USA, Salsbury, N.C. plant handles all light gauge Aluminum products, while
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