Industrial Grinders' - Case Study Example

Problem Statement & Analysis of Key Issues/Root Causes Industrial Grinders’ initial problem is the introduction of plastic ring, a surrogate for the steel rings effective in certain machines by the French firm Henri Poulenc. The merchandise is used for the same purpose the steel ring does, which Industrial Grinders manufactures. In analyzing the key issues and root causes, the plastic ring was new to the market and sold at a lower price than the steel ring. The plastic ring is 4 times the wearing characteristics of the steel ring that fully devastate the demand for the steel ring.

Lawrence Bridgeman, the overall manager of the German plant had done a research and found out that the problem stemmed from I.G.’s large capacity of steel rings in hand, and the considerable inventory of exceptional steel for their manufacture. In analyzing the key issues and root causes after a thorough survey by Bridgeman, the problem was that the special steel could not be sold even for scrap and the total book value of these inventories exceeded $93,000 (Industrial Grinders & Machining, 2012).

In analyzing the key issues and root causes, Industrial Grinders Company faced a competitive nature in the line of the product it was manufacturing. Competition had become fairly strong with the idea of Japan’s industries producing low-priced spare parts that successfully entered into the global business (Industrial Grinders & Machining, 2012). Many companies had also established themselves and were producing low-quality and low-priced machines that attracted many clients across the globe. Industrial Grinders lost many clients who decided to try the cheap merchandise that had low price.

Tests conducted by Ericsson and Greiner showed a critical problem faced by Industrial Grinders. In analyzing the key issues and root causes, the problem was the plastic ring produced by the French plant that had 4 times the wearing properties of the steel ring. The challenge faced by Industrial Grinders is that it would fully devastate the demand for the steel ring in the international market, hence reducing the profits achieved annually. The production and selling rate of the steel ring will go down drastically because the plastic rings and the industry will find it difficult to operate in its full capacity and 15100 finished rings would be left on hand by the mid year.

Action Plan & Alternative Courses of Action Plans and Their Associated Consequences I critically think Industrial Grinders’ alternative courses of action and their associated consequences should initiate from the management and employees efforts. They should be ready to find quick and workable solutions to their problems to become effective in their line of business (Industrial Grinders & Machining, 2012). Firstly, I.G’s initial action plan is advertising their steel rings effectively to the consumer by stating the significance and advantages of it.

It should use the media and any other accessible means to reach out to clients and promote their merchandise effectively. Industrial Grinders’ management should not hesitate to release funds for the advertisement purpose and the department concerned should initiate the action plan. The associated consequence for this plan is that Industrial Grinders Company will be known and recognized by potential clients. These