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Prism Canada Inc Case Solution

Solution Id Length Case Author Case Publisher
1473 1277 Words (6 Pages) Niels Billou Ivey Publishing : 9A98D011
This solution includes: A Word File A Word File

Prism Canada, Inc. manufactures and sells electronic hardware products. The operations of the business are quite extensive, and the company operates seven plants. Also, the range of products being created by the company is also significantly wide. The product offering of the business comprises radio equipment, receivers for the radio waves and panels for the equipment. The management of seven manufacturing facilities along with the diverse range of product lines is quite challenging to manage. There are numerous inefficiencies in the production system of the company.

Following questions are answered in this case study solution

  1. Major Facts

  2. Major Problem

  3. Possible Solutions

  4. Choice and Rationale

  5. Implementation

Case Analysis for Prism Canada Inc Case Solution

The business section with the highest degree of inefficiencies is the metal sheet operations. It is important to take an overview of the metal sheet operations to determine:

  • The cost drivers of this business section 

  • The criteria for the selection of a vendor 

  • The key performance indicators for this segment
• Overview of the Metal Sheet Operations 

Metal sheets are produced by the company as casings for its radio equipment. There is a high degree of variation in the requirement of the sheet for different types of the radios. The company needs to create around 150 pieces per week; however, a majority of these sheets have a distinct design. Thus, mass production at a single strength is not always possible. The process of the creation of a typical sheet follows the structure given below:

The key problem in the production of the sheets occurs in the turret press process. The machine of the company is quite obsolete, and the cost of the replacement of the machine is quite large. Also, the idle time in the process is quite high. The efficiency of the operations of 40% indicates that the business will be able to save a sizeable proportion of its costs by outsourcing the production of the sheets. The business will be able to resolve the large time lag between the order placement and the completion. Also, the high cost of maintaining these operations implies that the business overhead costs are higher than they would have been with the outsourced production schedule. Lastly, the business will be able to save a considerable investment into the cost of the replacement of the turret press machine. There are three alternatives to the suppliers for this product category. The business needs to make a decision to choose a supplier among the available suppliers for the best option.

2. Major Problem

What is the most appropriate and cost-competitive solution to outsource the company’s most inefficient metal sheet division?

3. Possible Solutions

There are three possible solutions for the company to choose from:

• Noma Sheet Metals

Noma Sheet Metal is a considerably large vendor and the transportation time from the vendor to Prism Canada two hours. The company has been recommended by a colleague that raises the credibility of the supplier. The existing clients of Noma Sheets are quite large in size, thus, the company has the experience of catering to large clients. The degree of the organization on the floor was not high. Donna found that the manufacturing processes were a little disorganized, and there were evidence of rework to be done by the team. The motivation level of the workers seemed to be quite low. The painting facility is also available with this supplier. Noma Sheet Metal is also characterized by the distinction of possessing the ISO 9001 registration. The delivery times of Noma Sheet Metal are six to eight weeks, and the company agrees to Prism’s practice of clearing the payment within a 45-day period. The average price of a sheet quoted by the company without paint is $48/part with the transportation cost being borne by Prism.

• Henderson and Sons

Henderson and Sons, is a comparatively small manufacturer. The distinguishing element of the company is the presence of high quality standards. The capacity of the operations of the company is quite small, and it would not be able to meet large orders within a short span of time. The degree of organization within the manufacturing operations of the company is very high. The motivation level of the employees is quite high. However, the business is not ISO registered. There is also an absence of the painting facility. One key advantage is the presence of services for the improvement of the process and design of the product. The lead time for the delivery of the good after the placement of the order is six to eight weeks. The price of the product being sold by the company is $47/part, and the corresponding credit terms are 45 days.

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