Shawns: case 1
General Motors was faced with some tough decisions on the use of a new
grommet – RIM (Reaction Injection Molding). After much debate, it boiled down to
keep using the IHG (Injectable Hardshell Grommet) or implementing the new RIM.
There are 3 options that David Schramm (Chief Engineer for Cable and
Component Design) could recommend, however, the best option and simplest
would be to have Packard Electric go with the IHG for all its 1992 models.
Some advantages of the IHG include being a smaller machine and allowed for
more portability if the equipment was being moved from plant to plant. The IHG
was more economical in that the unit cost of materials were cheaper ($4.40)
compared to the RIM ($7.00). There were less issues with the materials on the
IHG as the RIM grommet would freeze below 64F and render useless.
Some disadvantages included the specialized comb where wires needed to be
separately divided and fed through by the line workers at several stages.
Although the IHG was given a “5 and 5” test (allowing for 5 inches water to be
sealed on each side for 5 minutes), it proved that it wasn’t completely waterproof
but was splash resistant.
Although, both the IHG and RIM are very comparative, it would appear that it is
not financially feasible to move towards the RIM until further research has been
completed and various modifications to the product and its manufacturing
equipment. For example, if the equipment malfunctioned, they wouldn’t be able
to continue with the product for several days unless a second unit was on site but
this would cost more and take up more space. Therefore, it is more profitable to
maintain current IHG production until further review.
Reference:
Ellet, W. (2007). The case study handbook; How to read, discuss, and write
persuasively about cases. Brighton, Massachusetts: Harvard Business Review
Press. Provide response here: Case 2: GM: PED Case Study Analysis Options 1. 2. Parallel Development: prepare the IHG with a RIM grommet for the
customer’s 1992 requirements.
Stick with the IHG for all 1992 models. Criteria
Based on the demand from the customer and the goals of Packard, the main
criteria is for higher quality parts; in this case, a part that doesn’t leak. The
customer is willing to pay for it. Future prospects of the RIM grommet as new
technology against the IHG have initialized with demand for a 1992 upscale car.
Costs: manufacturing costs overall increase while repair costs are forecast to
decrease.
Manufacturing issues: Highly complicated process for manufacturing which pose
health and safety risks. This will impact the strategy of taking high-tech
processes to Mexico at lower financial assembly costs, but increase control
problems. Analysis of Options
Initial design and testing for the RIM grommet proved to be more superior
to the IHG. As the demand for technology increases, so too does the demand for
more wiring. Packard Electric Division (PED) already realizes an annual 6-8% wire
increase (p.219). The RIM grommet is capable of handling 2 times the amount of
wiring it currently sustains, is smaller in size compared to the IHG, but costs
more: RIM grommet unit cost @ $7.00 [Exhibit 8] is significantly higher than IHG
cost @ $4.40 (p.227).
It certainly costs more, but the technology, assembly line, and finished product
prospects can be greatest with the RIM grommet. The initial cost and risk with
manufacturing are certainly agonizing under the current process of the
components being assembled in Mexico. The annual estimated savings, when
taking all forecast and current information into account could be anywhere from
$2 - $6 million.
IHG plant leak data from Mexico [Exhibit 7] and [Exhibit 10] illustrate that leaks
increased from 1987 – 1989, including leaks caused by IHG cracks. RIM grommet
does not crack, so no defects.
The argument to combat a steadily declining market share is to increase
technological capabilities for the end product. GM could gain leverage over its
competitors with new components such as the RIM grommet. Recommendations
I recommend for Schramm to implement the second option of developing both
grommets, where the customer requested RIM grommet is primary and the IHG
will be secondary, should any prolonged or costly issues arise from the use of the
RIM grommet. Actions
Manufacturing: RIM grommet is more complex than IHG molding, with the need
to purchase a second machine. In order to safeguard workers, it is necessary to
develop new protocols for health and safety when operating the highly technical
and complex RIM molding machine.
The manufacturing efforts will require 2 components for the same purpose, but
will reduce the amount of SKUs needed in stock. Provide Response here for case 2: Melanie: Case 3:
General Motors: Packard Electric Division
The presenter did say what he recommended and the fact that David Schramm
was faced with a decision. The introduction is kind of confusing, He mentions “it
boiled down to keep using the IHG … or implementing the new RIM” that is only
two options, then he states “There are 3 options that David Schramm (Chief
Engineer for Cable and Component Design) could recommend” but he never
states the options, just the recommendation. So how would we know what he has
to choose?
Comparison between the two products should be made so that the argument is
convincing. Some statistics on the time or money required for the specialized
comb or RIM use would be beneficial. In an age where the environmental impact
is a business’s focus, the fact that the product that is used to manufacture the
RIM is toxic is a main detail that should not be overlooked.
The conclusion states “it would appear that it is not financially feasible” but very
little is mentioned in the criteria for success, how can we conclude this from one
comparison? He is also mentioning equipment malfunction, this is something that
should have been mentioned prior as part of the argument, not introduced in the
conclusion.
He does offer his best option, “Therefore, it is more profitable to maintain current
IHG production until further review“, but I do not find there is enough information
to convince me that it is actually the best option, especially since he is basing it
on financials and very little is mentioned about it.

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