Title: Danshui Plant No. 2
Authors: William Bruns, Julie H. Hertenstein, Kelvin Liu
Danshui Plant No. 2 in southern China has a one-year contract with Apple Inc. to assemble 2.4 million iPhones. In the first three months of the contract, the plant is unable to assemble as many phones as expected and is operating at a loss. The plant manager must analyze the budget and prepare a summary of monthly operations to help identify the source of performance problems.
1. Danshui Plant No. 2 was not able to fulfill the demand for the contract up to 3rd month.
2. Workers need to be multitasking as they need ...view middle of the document...
C. Outsourcing strategy should be used to ensure the production meet 200,000 units of iPhone 4. Company can outsource the numbers of iPhone 4 that cannot meet its target production for the first three month to sub-contractors.
D. To solve the problem of Samsung flash memory, Danshui should find alternate supplier so that the flash memory will not easily damaged during the installation process.
E. Training program should be organize from time to time to train workers so that workers can focus on one or more task in short period and also reduce human error that will affect the productivity of iPhone 4
F. Assemble process should change from handwork by workers to automate assemble system. Mechanized and automated devices will perform the assembly tasks in the assembly line to reduce human error. These automated devices can be programmed to handle complicated process that required in assembling iPhone 4.
G. Flexible budget should be prepare to compare with the actual performance so that any variance that is occur can be observed and immediate corrective action can be taken so that Danshui can meet its production target.
In short, we concluded that there are few problem faces by Danshui Plant No.2 which is Danshui’s facing difficulty to meet production target according to the contract. It also is facing difficulty in finding sufficient skilled worker to boost the production of iPhone 4. Recently Danshui is running business at loss as the actual cost is higher than budgeted. Few solutions have been recommended in order to meet production target and making profit. Flexible budget is prepared to compare with actual performance so that appropriate corrective action can be taken when error occurred. Wages and incentive should be increase to sound more attractive for potential workers. Outsourcing strategy is implementing to solve the shortage of the production for the first three month. Automated assembly system used to substitute handwork to decrease human error cause by complicated assembles process. Danshui should seek substitute to supply flash memory that have better quality. If solution mention above are put into practice, Danshui Plant No.2 should...