CASE STUDY

United Screen Printers (USP)

Company Objective
Focus more on short lead-times
Lower prices
Less on decal durability

Proposed Projects
1) Purchase new large press
2) Build new headquarters
3) Pursue ISO 9000 certification
4) Develop formal procedure for mixing inks
5) Purchase and install equipment to produce four-colour
positives in-house
6) Purchase ink jet printers

Purchase new large press

Currently, there is a 3.5 to 4 weeks backlog in screen
printing department.
Total lead time is 4 to 6 weeks compared to an industry
average of 3.5 weeks to 4 weeks.
Currently, USP ships 13% early, 38% on time and 49% late
75% backlog is waiting for press 6
Press 6 needs replacement parts but unable to find parts
because press is outdated.
Purchasing new press costs $160,000, increase process jobs
by 50 to 100%

Build new headquarters

CEO believes need strong corporate identity
Already purchased land and plans had already been
drawn up
Although new headquarters can improve operating
efficiency, savings generated will not pay for the new
building
Board members viewed the project as risky as it would
increase the company debt as a percent of capital from
almost zero to 50 percent

Pursue ISO 9000

ISO 9000 is a set of standards that provide customers
with assurance that a supplier follows accepted
business practices
USP want to pursue ISO 9000 because they want to
compete with industries that are able to export to
Europe
The process would help it document and perhaps
improve the processess

Develop formal procedure for mixing

inks
Mixing inks is a specialized skill that consumes 2 to 3
hours of the team leaders time each day
Focus on developing ink formulas to make the task of
mixing inks more routine, and less specialized and
subjective
The team leader is paid $25,000 annually

Purchase and install equipment to

produce four-colour positives inhouse

The lead time to have positives made by outside

supplier is one week and costs $1,500 to $6,000
Cost of purchasing would be approximately $150,000
and $25,000 for installation and training
The variable costs of producing positives in-house are
estimated to be $375 per job
The lead-time for four-colour positives would be 1 hour
30 minutes

Purchase inkjet printers

Add capacity based on newer technology
Given the inkjets production rate, 6 inkjet printers
would cost $140,000 to provide equivalent capacity of a
new large screen printing press
Inkjet disadvantage is the outdoor durability is more
limited
Inkjet printers are more economical for small orders
while screen printing press are more economical for
large orders

Project, costs and available budget

Project

Cost ($)

160000

4000000

300000

10000

175000

140000

Budget

700000

Score range from 1 to 5, with 1 being the lowest

and 5 being the highest
Criteria
Weightag
e
Projects
1
2
3
4
5
6

Leadtime

Cost

Durabili
ty

0.4

0.5

0.1

Leadtime

Cost
3
5
4
1
3
2

Durabili
ty
Total

Conclusion
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