Microlite Case Study Essay

Microlite S. A. is a caller-up in Brazil that manufactures alkalic and zinc-carbon batteries. In 1992 the company was go about with a reduction of responsibilitys on imported manufacture ripe(p)s which would mean that the international competition would ontogenesis signifi stinkertly. Luiz Pinto, who was a Microlite coach at the time, was approach with the opportunity to stretch stab and manufacturing be by closing down the seed in Guarulhos and move production to the go under in Jaboatao. The choices that Mr. Pinto was faced with were to move the Guarulhos equipment to Jaboatao or to purchase new and faster equipment. miserable the Guarulhos equipment to Jaboatao would minimize the capital investment and in any case increment the workflow collect to the reliability of the equipment. buy the new equipment would require much capital investment but reduce labor and increase production. The new tariff reductions were set to be implemented in 1995 and the problems were that Mr. Pinto had to reduce labor and increase productivity in an attempt to maintain the mountainous sh be of the Brazilian battery market that it currently owned. adept non-production issue that Mr. Pinto is faced with is from a financial aspect. One plectrum presented to Mr. Pinto is to purchase new Pan-Orient equipment.The investment in new equipment would be approximately $2 million. It is unknown from the case study how the $2 million would be paid or financed. This, however, would have an impact on the conclusiveness of the stakeholders on whether to accept this proposal or non. The Current Situation The current blocks in the operation of the AA battery operation at Jaboatao are the steps impart bedcover to cup and inspect carbon rods. These 2 steps operate below the indispensable rate of production and would need to be corrected to better productivity.In an effort to increase productivity, the Jaboatao plant should add bingle automobile from Guarulhos d edicated to add bedspread to cup production. While this solution allow increase productivity, it will also increase labor involve to operate the machine and additive labor would be required to inspect carbon rods. If the two bottleneck problems in the process are corrected, this would mother production up to the required 540 units per minute. One concern to Microlite is the amount of downtime that is experienced in Jaboatao. One obvious way to decline downtime would be to simply add to a greater extent machinery from Guarulhos.This would increase productivity but the company is still faced with the increased labor costs associated with the extra machinery. If I were the manager of the Jaboatao plant, I would be faced with a difficult finish. I ultimately would not want the addition al machines imputable to the associated costs. Instead, I would research the differences in operations of the two plants and determine what is factoring into the special Jaboatao downtime. I wou ld use the information to re-train employees and spring up them on the Guarulhos processes and procedures.Justification If the Guarulhos machines are installed it can cure the bottleneck at the add paste to cup portion of the process. increase the machinery will allow for the production to be increased to 540 units per minute and the bottleneck is corrected. The petty(a) bottleneck, inspect carbon rods, would require additional labor. It is estimated that the process would require one additional employee to increase the production of inspecting the carbon rods. The additional machinery and manpower would adequately make up for 1/8 of the production from the Guarulhos plant.Purchasing and installing the new Pan-Orient equipment seems extreme due to the significant amount of capital cash required as an initial investment. Microtel did not appear to be heavily in favor of this decision and I would gauge that stakeholders would be weary of the large investment. moving the equip ment from Guarulhos appears to be the wisest choice as it is the least(prenominal) expensive and drastic. The additional funds that are saved could also be employ on training and machine modifications to improve machine productivity.The difference in one-year expenses is large but the amounts are incite by the initial investment of the Pan-Orient equipment (See exhibit). During my valuation I determined that the ideal passageway would be to move the equipment from Guarulhos to Jaboatao to increase productivity and reduce downtime in the process. The Pan-Orient equipment is a good investment for the future but does not appear to be the right decision now. There could be a unlined transition in the future by introducing the Pan-Orient equipment at later time.