{"id":185,"date":"2011-01-05T18:39:27","date_gmt":"2011-01-05T18:39:27","guid":{"rendered":"http:\/\/www.department99.com\/bobamter\/?page_id=185"},"modified":"2014-08-26T16:24:41","modified_gmt":"2014-08-26T16:24:41","slug":"case-study-emerson-power-transmission-division","status":"publish","type":"page","link":"https:\/\/bobamter.com\/?page_id=185","title":{"rendered":"Case Study: Emerson Power Transmission Division"},"content":{"rendered":"

Emerson Power Transmission Division, <\/em><\/h2>\n

Emerson Electric Co., <\/em><\/h2>\n

Ithaca, New York<\/em><\/h2>\n


\n<\/em><\/p>\n

Situation:<\/strong><\/p>\n

The Emerson Power Transmission Division (EPT) was created by consolidating five Emerson divisions in 1987.\u00a0 The largest divisions were the manufacturers of Browning sprockets and belt drives, Morse roller chain and worm gear reducers, and Sealmaster mounted bearings.<\/p>\n

In 1988, Robert Amter was appointed President of $345 million in sales EPT.\u00a0 It was a profitable and well-established manufacturer, but was struggling and not achieving its objectives.<\/p>\n

Problems:<\/strong><\/p>\n

\u00bb Unit sales and market share were deteriorating in several product lines due to gaps in the line, poor customer service, and non-competitive price points.<\/p>\n

\u00bb EPT was not achieving the consolidation\u2019s cost objectives.\u00a0 Headcount in cost accounting, manufacturing and engineering had been cut too deep in an effort to meet the cost objectives.<\/p>\n

For example:\u00a0 the chain and mechanical clutch and brake plant did not have a plant manager.\u00a0 In addition, the periodic maintenance program had been severely reduced in the chain plant.<\/p>\n

Some plants did not have reliable cost systems and were without routings, bills of material and labor reporting.<\/p>\n

\u00bb The 1986 acquisition of a $15 million in sales electric clutch and brake manufacturer, which was expected to register high sales and profit growth, was losing money.<\/p>\n

\u00bb There was duplication of manufacturing plants and functions:<\/p>\n

– Nine plants.\u00a0 Need five.
\n– Two company employed sales organizations.\u00a0 Need one.
\n– Two IT computer operations.\u00a0 Need one.<\/p>\n

\u00bb Morale was low due to:<\/p>\n

– An unrealistic strategic plan and poor focus.
\n– The consolidation of two completely different cultures.
\n– The prospect of headcount reductions.<\/p>\n

\u00bb Operating profit margins were at record high levels, but costs were increasing.\u00a0 Price increases were unlikely due to EPT\u2019s high price points relative to competition.<\/p>\n

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~<\/strong><\/p>\n

Objectives:<\/strong><\/p>\n