For the EMMCO case, prepare an 8-10 slide presentation on how EMMCO should solve Incoming material inspection and material flow problems.
For the exclusive use of E. DWOMOH-APPIAH, 2018.
August 15, 2016
EMMICO: How to Improve Inventory Turns
Rochester, New York-based EMMICO had just acquired its supplier in Vienna, Austria, Franz Kuerten, and
was rapidly shedding employees throughout its ranks as it attempted to integrate operations with the Vienna
plant when it tapped a Tauber Institute for Global Operations intern team to seek solutions to the myriad of
operations problems facing the newly organized company. The team consisted of three students supported
by two University of Michigan faculty advisors, one from the College of Engineering and the other from the
Ross School of Business.
The issues facing the student team revolved around the integration of the Franz Kuerten plant into
the corporate operations of EMMICO. Frank White, director of sales, Europe, and head of the integration
effort, pointed out that the key EMMICO metric of operational performance, economic value add index,
was negatively impacted by the large amount of inventory carried at the Vienna plant and at its off-site
warehouse. The maintenance of this external warehouse alone was costing EMMICO €2.2 million (2.5 million
USD) per year.
When the team arrived at the Vienna plant in May 2015 they realized that a project of this scope and
magnitude offered many areas in need of improvement to meet the objective of better inventory turns while
eliminating the need for an external warehouse and thereby improving the economic value add index.
Some of the areas the team would have to address were the large amount of inventory awaiting
disposition by quality; an inefficient incoming material inspection process; a lack of responsibility for timely
disposition of customer returns; inaccurate demand forecasting for slow-moving and obsolete parts, resulting
in a larger-than-needed inventory; inefficient usage of space both at in-house and external warehouses;
asynchronous external warehouse and plant working…