Applichem Case Study Pt. 2

Strengths and Weaknesses of Each Plant – Rich

The table below summarizes the strengths and weaknesses of Applichem’s manufacturing plants:

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Business Strategy

Release-ease was created due to customer concerns over cleaning molds quickly.  The company answered the concerns of customers by having Applichem applications engineers derive the chemical Release-ease.  The chemical was effective when added in low concentrations to plastic molding compound during its manufacture so that the molded parts would be easier to separate from the mold and leave the mold cleaner.

Applichem held the patent on the chemical technology of Release-ease and had a steady generation of profits until 1982 from Release-ease and the product family.  However, Applichem had not done any research and development on the product since 1953.  There was no mention of new patent filings or new formulations that Applichem may have filed with the US Patent office.  New formulations and product process changes were performed by manufacturers and individual plants.  Most of these changes were made at the Frankfurt plant by Aristotle Pappas who was the manager at that plant.  Process changes were made by trial and error rather than some form of formal research and development department through good scientific methods.

In Europe, suspensibility of particles in liquid was an important property.  Competition was fierce in Europe than in the US.  Also, quality and product specifications were more closely monitored in Europe.  European customers used Release-ease within one year whereas this differed from US where customers used the product over a 3 year period of time and purchased packages of Release-ease in 50-kilo packages.

– Poor communication among plants to avail of experiential learning to improve efficiency in plants that need assistance.

– Utilized a Mixed (i.e., Process and Product) focus by having a four-step production process.

– Wide range of experience level of employees – skill level reflected in different regions.

– Labor is non-union, low-skilled work force in Venezuela and Mexico; semi-skilled in Canada; highly trained US and Germany employees, high-technical staff in Japan.

– Functionally organized with plants spread out in different parts of the world.