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    An American Tragedy How A Good Company Died Assignment

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    rafidah
    Burgmaster Corp was a thriving machine tool maker in 1965, but was sold to Houdaille Industries in an LBO. The LBO choked off investment funds needed to compete with foreign rivals. Burgmaster rushed defective products to market and promised unbuilt features to maintain cash flow. Both internal issues like outdated production systems and external forces like government policies, procurement practices, and foreign competition contributed to Burgmaster's demise. Poor operations management exacerbated these issues by failing to implement strategies to identify customer needs, control costs, and improve productivity.

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    An American Tragedy How A Good Company Died Assignment

    Uploaded by

    rafidah
    4K views3 pages
    Burgmaster Corp was a thriving machine tool maker in 1965, but was sold to Houdaille Industries in an LBO. The LBO choked off investment funds needed to compete with foreign rivals. Burgmaster rushed defective products to market and promised unbuilt features to maintain cash flow. Both internal issues like outdated production systems and external forces like government policies, procurement practices, and foreign competition contributed to Burgmaster's demise. Poor operations management exacerbated these issues by failing to implement strategies to identify customer needs, control costs, and improve productivity.

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    Burgmaster Corp was a thriving machine tool maker in 1965, but was sold to Houdaille Industries in an LBO. The LBO choked off investment funds needed to compete with foreign rivals. Burgmaster rushed defective products to market and promised unbuilt features to maintain cash flow. Both internal issues like outdated production systems and external forces like government policies, procurement practices, and foreign competition contributed to Burgmaster's demise. Poor operations management exacerbated these issues by failing to implement strategies to identify customer needs, control costs, and improve productivity.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    4K views3 pages

    An American Tragedy How A Good Company Died Assignment

    Uploaded by

    rafidah
    Burgmaster Corp was a thriving machine tool maker in 1965, but was sold to Houdaille Industries in an LBO. The LBO choked off investment funds needed to compete with foreign rivals. Burgmaster rushed defective products to market and promised unbuilt features to maintain cash flow. Both internal issues like outdated production systems and external forces like government policies, procurement practices, and foreign competition contributed to Burgmaster's demise. Poor operations management exacerbated these issues by failing to implement strategies to identify customer needs, control costs, and improve productivity.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    The key takeaways are that Burgmaster Corp was a machine tool maker company that was thriving in 1965 but faced demise due to various internal and external forces. Some of the internal forces included high costs, defective machines and lack of cash flow. Some of the external forces included increased foreign competition and unfavorable government policies. Operations management also played a role through failing to identify customer needs and follow best practices.

    The internal forces included high machine costs, pushing out defective products quickly and lack of investment funds. The external forces included increased foreign competition, government policies favoring imports and industrial policies that left domestic makers unprepared for change. A cartel by Japanese government also injured US tool makers.

    Operations management contributed to the demise through failing to identify customer needs, follow quality and cost leadership, develop productivity measures, operations strategy and solicit worker ideas. There was also a mismatch between resources, capabilities and customer needs.

    ASSIGNMENT 1

    AN AMERICAN TRAGEDY: HOW A GOOD COMPANY DIED

    WRITE A REPORT THAT OUTLINES THE REASONS (BOTH INTERNAL AND


    EXTERNAL) FOR BURGMASTERS DEMISE, AND WHETHER OPERATION
    MANAGEMENT PLAYED A SIGNIFICANT ROLE IN THE DEMISE.

    NAME

    : RAFIDAH BINTI ABD RAHMAN

    ID NO

    : 819441

    An American Tragedy : How a Good Company Died


    This case study tells us the story of Burgmaster Corp which is a machine
    tool maker company. Burgmaster was a thriving enterprise by 1965, when
    annual sales amounted to about $8 million. Although it needed backing to
    expand, it sold out to Buffalo-based conglomerate Houdaille Industries Inc.
    The case study also, informs us too many machine- tools and auto parts
    factories are silent, too many U.S. industries still cant hold their own.
    Holland uses Burgmasters demise to explore some key issues of
    economic and trade policy. The LBO chocked off Burgmasters investment
    funds when foreign competition made them most necessary.
    Houdailles charge that a cartel led by the Japanese government had
    injured U.S. tool makers.
    Holland offers plenty of ammunition by creating enormous pressure to
    generate cash. Burgmaster pushed its products out as fast as possible. It
    shipped defective machines. It promised customers features that
    engineers hadnt yet designed.

    The Internal Forces for Burgmaster Corp Demise


    1. The system for computerizing production scheduling was too crude;
    2. High cost and much expensive machines;
    3. Defective machines as a result of pushing products as fast as possible
    without
    regarding to quality and customers needs;
    4. NO Cash to fund process and procedures to face competition;
    5. No formula was a substitute for management involvement on the shop
    floor;
    6. A dramatic depiction of supply snafus that resulted in delays and cost
    increases.

    The External Forces for Burgmaster Corp Demise


    1. The Government policies: tax laws and macroeconomics policies that
    encourage LBOs and speculation instead of productive investment;
    2. Pentagon procurement policies for favouring
    machines over standard, low cost models;

    exotic

    custom

    3. The industrial policy : Domestic tool makers were too complacent


    when imports seized the lower end of the product line , the ill
    prepared for change and struggling to restructure;
    4. A cartel led by the Japanese government had injured U.S. tool
    makers;
    5. Foreign competition made.

    The role of the operations management in that demise


    i)

    Companies must be competitive to sell their goods and services in


    the marketplace. This company didnt follow the operations
    management principles or functions in its three major departments:
    finance, operations and marketing;

    ii)

    Burgmaster Corp didnt identify customer needs. It didnt follow the policy
    of
    low price and high quality;

    iii)

    It didnt be able to reflect joint efforts of product and service design;

    iv)

    No match between financial resources, operations capabilities, supply


    chains
    and consumer needs;

    v)

    It didnt follow inventory strategy to be competitive;

    vi)

    It neglected operations strategy;

    vii)

    It didnt develop productivity measures for all operations;

    viii)

    It didnt develop methods for achieving productivity improvements such


    as
    soliciting ideas from workers and re-examining the way work is
    done.

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