Objective of case analysis
To study and implement the operation strategies to the problem of Alden Products manufacturing as they are facing the challenges regarding expansion of the capacity
The European organization of Alden Products, Inc. is contemplating a doubling of unit sales about 40% over the next ten years. Their largest plant, located in Holland, was set up 25 years earlier to supply all demands of the EEC countries on the continent. It has since expanded six times. So it was considering:
Should it expand again?
Should it build a new plant in Southern Europe?
Or should it increase subcontracting?
And to consolidate the different factories units in to single production Unit?
Why should Alden products international in1962 consolidate its continental European production into one single facility?
In the early 1960s, API had several subsidiary plants across Europe. They were responsible for their own products and distribution networks in there own country. At this time the company was going through great changes and was expected to be growing at a rate of 40% a year. This growth would put their current arrangements in Europe at great strain and if nothing was done to meet the increasing demand of the company products. Otherwise it would lose out on this great opportunity and market share.
Two options were considered,
To increase capacity at each of their regional subsidiary plants?
To consolidate all European production to one single production centre?
A decision was made that API would consolidate all its European ventures into one single operation and turn the existing factories into regional distribution centers. The site for the new factory was Nijmegen in Holland and this site opened in 1962. According to our analysis the decision to change the structure of the company to a single production centre was wise and good decision because by analyzing this decision in terms of operational strategy, we...