iphone danshui plant 2 underproduction problem

Danshui Plant No. 2

Overview

1. Recognition of Decision Requirement2. Diagnosis and Analysis of Causes3. Development of Alternatives4. Selection of Desired Alternative5. Implementation of Chosen Alternative6. Evaluation and Feedback

Decision Requirement

Low production Required to produce 200000 iphone 4 units Currently producing 180000 iphone 4 units

Analysis of causes

Inadequate qualified labor Time factor Technical trouble with the samsung flash

memory installation The process was labor intensive

Development of Alternatives

Outsourcing• Skilled labor• Finished products

Adaption of Capital intensive Recruiting more labor(30-35%) Relocate the plant to an area where

unemployment is high Give incentives to increase working hours Increase supervision

SWOT analysis

StrengthAssembly line technique according to

specification of international companiesLow labor costs/semi-skilled laborDanshui Plant No.2 was known as a

profit center

SWOT Analysis

WeaknessesExcess capacityComponents of assembly sourced

internationallyWrong budget estimation Production based on labor intensiveProblem of hiring enough qualified

workers

SWOT Analysis

OpportunityIt would be a great opportunity to show

the company’s abilities in order to secure future assembling jobs for apple and other companies

SWOT Analysis

ThreatsDelay in meeting required capacity of

200000 units per monthNot fulfilling contract requirementLoosing trust of Apple to be able to

successful produce the required amount of phones(Threatens future tenders)

Desired Alternative

Production 180000 iphones on our own

Outsourcing finished products from Foxconn

@month 26667 iphones to be outsourced

Implementation of Chosen Alternative

Persuasion• Convincing Foxconn to produce the

iphone 4 at the lowest possible priceContract

• Signing contract with FoxconnPayment

Evaluation and Feedback

Outsourcing of finished iphone units to Foxconn proved to be a successIt was the fastest, most efficient solution to meet the agreed contractThe factory was able to cut down the cost and keep a reasonable profit margin

THANK YOU!

~the end