Applichem Case Essay

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INTRODUCTION Applichem manufactures specialty chemicals devised as solutions to specific customer's problems. It was founded in Chicago just before World Was II. Release-ease is a specialty chemical that Applichem developed in 1952 for a customer's request to help in formulating a plastic molding compound, which released easily from metal molds after compression molding. It is in the form of dry powder. The difficulty involved in cleaning stainless steel molds for plastic parts along with un-molding forms the bottleneck for the plastic manufacturing process. Release-ease helps molded plastic parts to separate out easily from the molds and ensures that the mold remains clean. OBJECTIVES The main problem faced relates to differences in operational efficiencies between the various locations producing Release-ease. For example at the Gary (Indiana) plant 1,300 people produce about 300 million tonnes a year, while the Frankfurt facility accounts for almost 90% of this value with only 600 employees. The purpose of this article is to determine whether or not Applichem should keep their production of Release-Ease within their current plants or move production to another location. This new location would be one, or more, of Applichems’ production locations including: Gary (Indiana/USA), Mexico, Frankfurt (Germany/Europe), Sunchem (Japan). ALTERNATIVES > Closing the Release-ease production of plant in Gary. > Do not shut down the Release-ease production in Gary. Making Gary more productive by updating their technology in order to run more efficiently. > Stopping Release-ease production in Japan.  If this is the case, the technology currently in Japan could be sent to the Gary plant to help make production more efficient, or  Sending as much production as possible to Frankfurt where cost of production is cheapest and then sending the remainder of production, after this

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