. . Required Question

Chasser 1O Managment Corol of Opersa CASE 10-3 SIEMENS ELECTRIC MOTOR WORKS Ten years ago our elecrie motor business w in real duce electric motors for other applications. At the end of troube. Low labor rates allowed the Eastern Bloc cowatries to sell slandard motors at prices we wereSiemens factory in West Germany capable of producing mable to match. We had become the high-cost producer in the industry. Consequently, we decided to ities had been completely destroyed or seized by Eastern change our strategy and become a specialty motor Blocountries. Afier an aggressive rebuilding program, producer, Once we adopled owr new strategy, we discovered that waile our existing cost system was adeawate Jor costing standard morors, ir gave inaccurate information he e used ir to cosi specialty moors World War II, the Bad Neustadt plant was the only electric motors, All the other Siemens production facil- Bad Neustadk emerged as the firm's primary producer of electric motors. Through the 1970s, EMW produced about 200 different types of standard mators, at a total annual volume around 230,000 motors, Standard motors accounted far 80 percent of sales volumes-the runs of a single type of motor. Because identical motors were used by a wide range of customers, slandard Headquartered in Munich. Siemens AG, a producer of received. The market for standard ANC motors was world's largest corporations. Revenues totaled S bil pressure to reduce costs so that it could p lion deutsche marks in 1987, with roughly half this was under constant ice aggres sively and still make a profit. Despite a major expan- automation program begun in 1974, by the early 1980s EMW found it could not lower its costs d electronk pruducts, was one of the exlremely competitive. The fim Republic sion and of Germany. The Siemens organizatian was split into seven major groups and five corporate divisions. Thliciently to offset the lkower labor rates of its Easterm Bloc competitors. Low-watlage a current (AIC) motars were produced at the Electric Change in Strategy Motar Works (EMW), which was part of the ManufacAnsive study revealed that EMW could become a turing Industries Division of the Energy and Automa profitable producer of low-volume, customized ANC tion Group. Hh-we motors were pruduced a mots. To help implement this strategy, the Bad Neustadt plant was enlarged and dedicated to the manu- facture of A/C motors with power ratings ranging from 0.16 to 18.5 kilowatts. These motors supported a num- another facility The Electric Motor Warks ber of upplications including automation engineering Located in the small toun of Bad Neastadt, the original Siemens EMW plant ws built in 1937 to manufacture refrigerator motors for Valkskuhlsch-raenke(people's misme Sienes A 9-191-008 and SienceB refrigerators). Less than a ear later, Mr. Siemens haltedrvad Busines Shool. Copyright boy the Presidew and Felkoesof the production of refrigerator motors a , 89 Dru, cases wram by Pilton Robie Cooper and Kan wruck nd began to pro- Chasser 1O Managment Corol of Opersa CASE 10-3 SIEMENS ELECTRIC MOTOR WORKS Ten years ago our elecrie motor business w in real duce electric motors for other applications. At the end of troube. Low labor rates allowed the Eastern Bloc cowatries to sell slandard motors at prices we wereSiemens factory in West Germany capable of producing mable to match. We had become the high-cost producer in the industry. Consequently, we decided to ities had been completely destroyed or seized by Eastern change our strategy and become a specialty motor Blocountries. Afier an aggressive rebuilding program, producer, Once we adopled owr new strategy, we discovered that waile our existing cost system was adeawate Jor costing standard morors, ir gave inaccurate information he e used ir to cosi specialty moors World War II, the Bad Neustadt plant was the only electric motors, All the other Siemens production facil- Bad Neustadk emerged as the firm's primary producer of electric motors. Through the 1970s, EMW produced about 200 different types of standard mators, at a total annual volume around 230,000 motors, Standard motors accounted far 80 percent of sales volumes-the runs of a single type of motor. Because identical motors were used by a wide range of customers, slandard Headquartered in Munich. Siemens AG, a producer of received. The market for standard ANC motors was world's largest corporations. Revenues totaled S bil pressure to reduce costs so that it could p lion deutsche marks in 1987, with roughly half this was under constant ice aggres sively and still make a profit. Despite a major expan- automation program begun in 1974, by the early 1980s EMW found it could not lower its costs d electronk pruducts, was one of the exlremely competitive. The fim Republic sion and of Germany. The Siemens organizatian was split into seven major groups and five corporate divisions. Thliciently to offset the lkower labor rates of its Easterm Bloc competitors. Low-watlage a current (AIC) motars were produced at the Electric Change in Strategy Motar Works (EMW), which was part of the ManufacAnsive study revealed that EMW could become a turing Industries Division of the Energy and Automa profitable producer of low-volume, customized ANC tion Group. Hh-we motors were pruduced a mots. To help implement this strategy, the Bad Neustadt plant was enlarged and dedicated to the manu- facture of A/C motors with power ratings ranging from 0.16 to 18.5 kilowatts. These motors supported a num- another facility The Electric Motor Warks ber of upplications including automation engineering Located in the small toun of Bad Neastadt, the original Siemens EMW plant ws built in 1937 to manufacture refrigerator motors for Valkskuhlsch-raenke(people's misme Sienes A 9-191-008 and SienceB refrigerators). Less than a ear later, Mr. Siemens haltedrvad Busines Shool. Copyright boy the Presidew and Felkoesof the production of refrigerator motors a , 89 Dru, cases wram by Pilton Robie Cooper and Kan wruck nd began to pro