The Policy and Organisation for dealing with Small Orders in an Industrial Company

Abstract

The research described in this thesis was undertaken at Dunlop Limited,
General Rubber Goods Division, Skelmersdale and concerned automotive
braking components supplied to Automotive Products Limited. The
majority of the sales revenue was generated by a small number of
injection moulded components; the remainder was generated by those
components which constitute the majority of the product range and were
generally manufactured by compression moulding in small quantities.
The large number of small order products represented an area of
uncertainty for the Dunlop management; ae major objective of the
project was to reduce this uncertainty. The problem was considered
under three headings: the marketing, manufacture and costing of smell)
orders.
An investigation was undertaken to identify the significant differences
between the high volume and low volume order markets. A survey Was
made of industrial buyer behaviour literature end hypotheses generated
predicting the behaviour of the Automotive Products purchasing
organisation. The hypotheses were tested and an assessment made of
Dunlop es 2 supplier. Alternative approaches to product pricing were
evaluated end a pricing policy which related product price to the
amount of customer tooling investment was developed.
Small order manufacturing efficiency was examined and improvements
suggested. A new approach to labour costing was developed and
implemented. Subsequent investigations revealed that the existing
standard costing system was not appropriate to the costing of small
orders; an exercise was undertaken to forecast future demand for
small order and derive standard cost budgets in order to assess the
viability of small order manufacture. An interactive cost model of
small order manufacture was also developed which enabled expected actual
performance to be predicted.
As a result of the investigations the company was recommended to
continue small order manufacture on condition that some improvements
were made. An attempt was then made to draw some general inferences
from the study.

Date of Award	1979
Original language	English
Awarding Institution	Aston University