Danshui Plant No. 2 is a contract manufacturer locating in southern China and was assembles electronic products for companies wishing to save labor costs and they are using semiskilled labor for less than 1 dollar an hour. In August 2010, Danshui Plant No. 2 in southern China has a 1 year contract in the period between 1 June 2010 and 31 May 2011 with Apple incorporation to assemble the Apple iPhone 4.
Based on the contract, Danshui need to assemble 2. 4 million iPhones within 1 year. However, Wentao Chen, manager of Danshui Plant No.2 was anxious about the plant is not able to assemble 2. 4 million as their expected and is operating at a loss when the third month of the contract. Their current production was only 180,000 units per months compared to their planned monthly budget is 200,000 units. Therefore, manager was called the plant controller to analyze the budget and request a summary of monthly operations for August as soon after the end of the month as possible in order to identify the source of performance problem.
Problem statement In the contract between Apple and Danshui Plant No. 2, Danshui need to assemble 2. 4 million iPhone within 1 year. This means that Danshui need to produce 200,000 units iPhone 4 per month but now in the third month of the contract they only produce 180,000 per month. Therefore, there are unable to assemble the iPhone 4 within 1 year this may because of they are lack of qualified labor. Danshui Plant No. 2 are employs those semiskilled labor and just pay for less than one dollar an hour.
The Essay on Danshui Plant No.2
Background: Danshui was a contract manufacturer assembling electronic products in southern China. There were many manufacturers like Danshui in China assembling parts for the companies wishing to save labor costs. Apple contracted with Danshui to assemble 2.4 million iPhones in Plant No.2 with the expected high demand of this product in 2010. As a profit center, Plant No.2 was credited for each ...
This might cause those labors do not have motivation to work, they will feeling lazy, bored and tiring so lead to unable complete 200,000 unit per month. Besides that, Danshui are assembly of hard drives before they assembly of iPhone, which means there are totally two different things. Although Danshui Plant No. 2 are confident that its workers would adapt to the new assembly tasks but it still cause mistake to be happened during the production.
For example, there are one thousand flash memories were damaged and need to be replaced after inspection. In addition, the manage operation also is one of the problem. As the plant manager, Wentao Chen was responsible for control of all costs in his plant. These kind of duties might be too heavy for him because it is hard to manage so many task at the same time because he have to control the waste , damage , theft or inefficiencies as well.
