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

  • Edward J. McGrath

    Student thesis: Doctoral Thesis › Doctor of Philosophy

    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 Award1979
    Original languageEnglish
    Awarding Institution
    • Aston University

    Keywords

    • policy
    • organisation
    • small orders
    • industrial company

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