Expand Capacity or shrink – a decision for Bremen Castings

A Wall Street Journal article (August 10, 2011) describes the choice made by Bremen Castings, a foundry in Indiana with $ 47.5 million in sales, that was choosing whether or not to undertake the largest capital project in their history by spending $ 5 million – the next phase of a $ 10 million expansion.  The dilemma was whether to draw conclusions about their demand by looking at the stock market.  In the end, a detailed look at the order stream from their customers – in trucking and agriculture, and the potential orders from US manufacturers moving back to US sources to fill small orders, made them stick with their expansion plan.  Does the example of Bremen Castings suggest a potential disconnect between industrial growth and apparent financial volatility ? Are the long term sourcing shifts to US sources a fundamental source for capacity growth in manufacturing ? Can small US manufacturers focus on their inherent flexibility, skill level but high tech automation to compete  against the low cost but large minimum order level Chinese sources ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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