Quality and Productivity

Quality-Productivity If your name is not on the Cover Page you will not get the mark for this assignment. Case Study – Supreme Inc. You have just joined the Supreme Company as a financial analyst, reporting to the Controller. Based upon your recent business education at Humber, which included a wide range of subject areas, your new boss has asked you to help her review the recent changes in the manufacturing area. Until recently, the company had offered only a limited number of standard electric motors for sale. They had purchased raw materials and the lowest level components, but produced most of the subassemblies and all of the finished products in their own plant. The company’s profitability had declined over the years and marketing believed that customers needed both more variety of product and lower prices. In early 2022, the manufacturing division had been assigned the task of recommending changes to accomplish this dual goal of increasing variety and reducing costs. Manufacturing had recommended that they change their strategy to:  Buy (rather than make in-house) most of the subassemblies. As tooling-up to produce a much wider variety of subassemblies, would take several million dollars of investment and 2-3 years to implement. Retaining production of existing sub-assemblies in- house was not considered viable as their volumes were expected to drop dramatically, when the variety being offered increased. Also the company needed all the existing space for the more flexible final assembly process needed for the greater variety of products being sold.  Build final products to customer order. This plan had been approved in September of 2022. The plan and associated personnel layoffs were announced in October 2022, with the layoffs scheduled for December 31, 2022. The increased variety of products had been announced in October, with the first build-to-order shipments scheduled for Jan 2023. Selected Historical Results: Period Sales ($ '000's) Labour ($ '000's) Material ($ '000's) Other Costs ($ '000's) Jan 2022 250 63 104 65 Feb 252 62 102 66 Mar 262 65 103 64 April 255 64 106 66 May 263 66 103 63 June 270 69 104 65 July 265 68 102 64 Aug 262 66 108 67 Sept 254 69 107 66 Oct 259 75 109 65 Nov. 265 76 115 69 Dec 268 77 120 70 Jan 2023 255 51 156 64 Feb 265 47 150 63 Mar 275 35 149 64 April 290 31 144 65 May 284 30 146 63 June 286 31 147 65 July 295 29 148 64 Aug 292 29 148 63 Sept 301 31 150 65 1