Palletizing Decision at Greaves Brewery: A Cost-Effective Expansion

Greavess Brewery enjoyed an first-class repute as a shaper of beer that had won both local drinkers and tourers who chanced to seek out its bottled merchandise during their trips. Located in Trinidad. a southern Caribbean island. Greaves Brewery was established in 1924 by John Greaves. its laminitis. Through the old ages. Greaves Brewery had steadily grown and finally began to tap the export markets. every bit good. The company reaped its highest degree of gross revenues in February 1991. The increased demand for Greaves beer called for prompt action for the company to better its production operations to maintain up with the favourable development.

Issues of the Case

In the class of finalising the design for an extra bottling line for Greaves Brewery. the company’s head applied scientist. Lesley Simpson. had to make up one's mind on issues refering to how the bottled beer in instances should be placed on the palettes. The company was presently utilizing manual labour for this portion of the production line.

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Meanwhile. there is the available option to put up an machine-controlled system for it. Considerations and Alternative Courses of Action The company gross revenues were expected to top out during the carnival season in February. the Easter jubilations in April. the Independence Day at the terminal of August and the Christmas season in December.

To bring forth more of its merchandises during the peak times of the twelvemonth. the company resorted to using more workers and scheduling extra production displacements. Finding people for the 3rd displacement and oversing them is non easy to carry through.

The 1. 000-bottle-per-minute operation is known to extinguish the demand for the 3rd displacement ; such operation would necessitate merely one displacement and a few overtime hours every now and so. A Comparison Between Greaves Brewery’s Current and New Bottling Lines Particulars Current New Capacity per minute 400 bottles 1. 000 No.

of day-to-day displacements 2 to 3 1 Weekly displacements 5-7 yearss 5 Time public-service corporation of line operations 85 to 100 % 100 % Meanwhile. the undermentioned compares the two different makes of the automatic palletizing equipment that the company is sing to put up to make off with the manus lading operation: Particulars Perrin Clark No. of instances grips per minute 45 45 No. of beds to be stacked 5-7 5-7 Equipment cost $ 324. 000 $ 408. 000 The company would hold to make up one's mind to buy either the Perrin or the Clark palletizing equipment to travel with the increased bottling capacity of its works.

Recommendation Based on the foregoing. it is recommended that the company set up its new bottling line and the Perrin equipment to travel with it. The costs showed that the alternate equipment. Clark. had turned out to be manner more expensive than Perrin even if it did non offer any improved public presentation or any extra advantages. Therefore. the improved productiveness that resulted from two factors – viz. . the puting up of the Perrin equipment and the increased bottling capacity of the works – were shown to bring forth net benefits for the company’s operations.

Case Questions 1. What operations have an impact on the palletizing determination? Discuss. The operations instantly prior to palletizing procedure have an impact on the determination sing it. In peculiar. the bottling and the instance packing operations are the sections of the full operations of the company that have the most influence on the determinations refering to palletizing. The figure of bottles and the figure of instances packed up for palletizing would find the most economical process for it.

The lesser the dislocation caused by faulty equipments. the more sagely the operation personnel’s clip was used for the day-to-day operations. and the faster the palletizing is accomplished. the better for the company which in 1991 has holding trouble in commanding its costs while get bying with the increased demand for its merchandises. 2. What standard should be used to do the determination? The standards to be used to do the determination sing palletizing should be cost-effectiveness. labour use. productiveness. increased production volumes. improved quality of jammed beer in bottles and finally. higher profitableness for the company.

These are the things that should be borne in head while doing determinations sing the company’s operations. 3. As Leslie Simpson. what is your analysis of the palletizing determination? What would you urge? The palletizing determination would decidedly be a move frontward in the company’s command to continually turn both in the local and export markets. I would urge that the company travel for the Perrin equipment since I consider it more cost-effective. Choosing Clark might intend holding the equipment functional still for a longer period of clip as compared to Perrin.

However. there might be plentifulness of alterations – extra enlargement stages or even new assortments of the company’s beer merchandises – within the approaching old ages. Buying the more expensive. albeit more lasting. equipment might non be the wise move. Meanwhile. Perrin is in itself a good pick. Choosing it. so. has benefits that make its cost justifiable and evidently easier to retrieve every bit compared to Clark. 4. If Greaves chosens to buy from Clark or Perrin. what contractual footings should be sought?

Upon purchase of a palletizing equipment from Clark or Perrin. Greavess should elect to maximise the footings that either company can offer in footings of monetary value. payment strategy. free service of the unit. equipment guarantee and insurance coverage. Greavess should seek to bask as much free services as offered by either Clark or Perrin so as to retrieve its extra investing in its works within a shorter period of clip. Work Cited Leenders. M. R. & A ; Erskine. J. A. “Greaves Brewery. ” Cases in Operations Management. Ivey Management Services. 1991.