California-Illini Manufacturing Case Study Example | Topics and Well Written Essays - 1000 words

California-Illini Manufacturing - Case Study ExampleTheir personify decline strategy though seemed cost-effective it was not able to fence well in the short run. The Cls standard cost system and the high levels of work-in-progress had impacts on its cost reduction strategy. However, the new Production overcome/Inventory Control (PCIC) Manager is seen working on the right track, by implementing new strategies to manage the constraints to restrict the fraternity convention producing and building higher inventory levels for products not having sufficient demand. Thus, implementing a Theory of constraint approach would be most suitable for the Company to manage the human and material resources well. Problem Statement Competitive strategy, in the normal sense refers to the way a company can achieve a competitive avail in its operating market while choosing a distinctive way of competing. California-Illini Manufacturing Company is able to compete in the global market by making the m aximum rehearse of their competitive strategy. They are the largest givers of study and hard-faced replacement tillage tools in the United States. They concentrate to a greater extent on handmade tillage tools. They use expensive metal pieces and metal forged metals in the production process, together with using manual voltaic arc welders. In the global market, there is greater opportunity for handmade products, especially for machineries and automobiles. For example, handmade vehicles, such as the Lamborghini cars are highly demanded as well as more expensive, because the extensive efforts and labor to produce the vehicle has attributed it to be better built. However, their line of industry in America as well as in the global market is getting very competitive. Products with cheaper rates are brought into the market, which makes the market more and more competitive. In spite of all these conditions, there is still a considerable market for the handmade, rugged, American machin eries and tools. Therefore, the company can stick to their design and competitive strategy and bring products into the market, from their family built, third-generation Company. They have the advantage of utilizing the quality of tools as their trademark. Causes of the Problem The California-Illini Manufacturing Companys cost reduction strategy is attributed to the various market conditions and global stinting stipulations. During 1980s, when President Reagan was in his first term, an economic downturn struck the global market. The slow down in the market caused many global companies like the California-Illini Manufacturing to struggle. The company was in need of formulating a strategy as its cash flow was poor and the inventory levels were down. They had to find out ways to cut down the cost, step-up prices, and develop technology and productivity. However, the cost reduction strategy formulated by the management faced rough unexpected failures in the short run. In 1989, the cost cutting strategy was seen failing, firing the operating be up 20%. The inventory level was increased by 24% and the net profit act to slip (California-Illini Manufacturing). The California-Illini Manufacturing Companys standard Cost system had an impact on the cost reduction strategy. The Company put a cost system into operation to measure performance and profit potentials. low the cost system, a standard level was ascertained to to each one element, including material and labor. In the same way, each production manager was evaluated on their