Copeland Corporation: Manufacturing in China

Describes the startup of a new manufacturing facility in China, to serve the China market, previously served by a field sales force and imported products. Plant, which incorporates state-of-art manufacturing technology, attains world-class status in manufacturing shortly after startup, but increased competition and sales stagnation in China market offer new challenges. The vice president of Asian Operations desires to use the new manufacturing facility as a competitive weapon and must integrate more closely with Sales and Marketing. Case is designed for a course in Operations Strategy or International Business; can be used to illustrate issues associated with plant startups in China, and issues related to Marketing and Manufacturing interaction. Excerpt UVA-OM-1019 Copeland Corporation: MANUFACTURING IN CHINA As Steve Stewart left the Asia headquarters of Emerson's Copeland division for the annual strategy meeting, he went over his notes on the Service Factory concept once more. In just a few minutes, he would be making a presentation on how the new Suzhou, China factory could be “used as a competitive weapon,” but he realized that he faced organizational skepticism and even some opposition. Like any other new initiative, adopting the service factory concept would require organizational changes that threatened other departments, especially the sales team, and he was not sure how to overcome those barriers. Stewart, currently vice president and general manager of Asia Operations, had been developing the Service Factory concept as a manufacturing response to the changing nature of competition in Asia. Opened in June 2000, the Suzhou plant was under tremendous pressure to offer lower prices and faster delivery. Copeland was also finding itself in direct competition with several Japanese compressor manufacturers with good manufacturing processes, high quality, short lead–times, and good costs. In order to keep Copeland competitive in a strategically important region, the company had to go beyond these “tickets-to-play” and “take a total value stream approach to eliminate non-value added activities from the value stream” and offer true manufacturing partnerships and consulting services. The ability of the Suzhou plant to compete as a Service Factory was based on three inter-related elements. First and foremost was the very successful ramp up of the factory. Using a combination of tried-and-true manufacturing processes outlined in Copeland's Plant Technology Franchise, Steve Stewart and Eddie Turrentine, general manager of the Suzhou plant, had already turned the first Copeland factory in China into a world-class manufacturing plant. In less than one year from the plant's opening in June 2000, Suzhou had achieved the highest quality ratings of any Copeland plant in the world and had successfully passed Copeland's exacting plant audit procedures. . . .