Dorothy Hoffman, plant manager for the Clarksburg, Virginia, location of Fisher Manufacturing Company (Fisher), had a problem: her plant was repeatedly failing to improve its dismal performance when it came to meeting shipping dates. Only 60% of its June shipments had met the well-established four-week service standard of the coated-abrasives industry. She knew that an investment of $8 million in new equipment would provide a significant reduction in setup times for a major portion of Fisher's production process, but she also knew that the board of directors would need more than just her faith that the investment was worthwhile. She needed hard numbers to justify a recommendation.
The case can be used to show the benefits of production flexibility through an increase in capacity by setup-reduction efforts. By reducing setup time, smaller batches may be produced, allowing Fisher to be more responsive to the market while lowering its inventory investment.