The Morrison Company Essay
3626 WordsDec 2nd, 201315 Pages
FIN 485 – Brief Case #5
The Morrison Company
December 5, 2013
Case Overview/Key Issues
The Morrison Company is a manufacturer of Radio Frequency Identification Tags (RFID). These tags can be scanned from small distances away and are used to track items in the shipping and supply chain process. The Morrison Company provides RFIDs to companies in the Pharmaceutical and Retail industries. The company has seen a large increase in sales over the past year, which has forced production to increase as well. As production levels increased, problems began to arise in the production process that hindered Morrison’s ability to run the company at the most efficient and effective level. Shauna Breen was recently hired as the new Director of…show more content…
Another pro of the industry is that the tags require little customization. The customization phase of the production process is the bottleneck for most companies and by limiting this, companies are able to make larger batches and spend less per unit on the production of each. This is especially key for Morrison, because their biggest production bottleneck is in the customization phase, and by not having to go through this phase, they can meet their production schedule and use the extra capacity for other product lines. Morrison is positioned very well in this industry. In 2007, Morrison patented a production process that allowed them to produce tags with unmatched performance. This allowed them to gain a 30% market share in the pharmaceutical industry within 3 years. The higher priced HF tags also help contribute to Morrison’s financials. This product line accounts for roughly two thirds of their revenue and a little over $6 million in net earnings.
c. There are also a few pros and cons within the retail market. The main pro is that the market itself is growing. In 2010, retail sales account for 6-7% of global industry sales, however this is expected to increase to 10% by 2015. This is due to retailer’s use of the lower priced ultra high frequency tags on individual items. This allows retailers to track inventories and prevent lost or stolen goods. The first con of the industry is that the
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