This paper examines the strategic and operational challenges facing Trico, Australia's only windscreen wiper blade manufacturer. The company is under financial pressure from internal inefficiencies and external market forces, including shifting Australian government policy toward the automobile industry. Key problems identified include heavy dependence on a small number of car company clients, large-batch production philosophy, excessive inventory costs, poor inter-departmental communication, inadequate quality control, and limited access to non-OEM markets. The paper evaluates two strategic options — plant closure versus technology investment — and recommends a series of targeted improvements spanning lean operations, Just-in-Time delivery, Material Requirements Planning, HR development, and cross-functional integration to restore long-term competitiveness.
Trico is a company that manufactures windscreen wiper blades. It is located in Australia and is the only manufacturer of this type in the region. The company is undergoing a difficult period from the point of view of profitability and needs to make strategic changes in order to survive in the future. These critical circumstances have been caused by a variety of reasons, both internal and external, most of which need to be addressed as soon as possible.
Trico is faced with a situation in which it must decide on a strategy that will prove efficient and effective from a long-term perspective. One option is to close down operations entirely, given that the value of the activity site alone is $5 million. The other option is to make a large investment in developing the technology the organization uses and expanding its Flexible Manufacturing Systems (FMS) technology.
The latter option, however, carries two main disadvantages. The first is that it is highly expensive. The second concerns the company's own capacity to implement this technology — it remains unclear whether the company's structure and resources are sufficient to deploy FMS in an efficient manner. Therefore, Trico must also look for other alternatives.
There are numerous problems that Trico needs to address, and the challenge is made all the more complex by the fact that these problems exist at both the internal and external levels. The external issues include changes in Australian government policy regarding the automobile industry and commerce. The internal issues affect the enterprise at all levels — horizontal and vertical — from the company's organizational structure to its communication processes and its relationships with customers.
One of the problems Trico faces is a strong dependency on the domestic market and on car companies. These clients place orders on a monthly basis, but their requirements and operational philosophy result in large inventory stocks that Trico must store for extended periods — sometimes up to a month. In addition, car companies frequently change their minds about orders and request expedited deliveries, which disrupts Trico's entire production rhythm. Order volumes fluctuate in line with monthly car sales figures.
One potential improvement would be to reduce the periods during which inventory is held in the warehouse. The difficulty is that the car companies themselves impose this condition, wishing to ensure that supplies are always available when needed. The cost of holding inventory reaches up to $2.5 million for the company.
One of Trico's main clients is Ford. This relationship has presented various inconvenient aspects. For example, the purchasing department is located at a significant distance from the assembly area, meaning that small weekly changes are translated into large and costly corrections — wasting both time and money.
Another problem affecting Trico's functioning lies in its production philosophy. The company is focused exclusively on manufacturing large batches, and the size of these batches means production cycles can last up to eight weeks. The production process is itself complex and time-consuming. While processes could theoretically be accelerated, the absence of long-term production forecasts and the frequent changes in requirements from car companies make this almost impossible in practice.
A further element slowing production is the technology currently employed. The wipers are made of three separate pieces, and producing each piece takes a set amount of time. When one piece proves more difficult to produce than the others, work-in-progress accumulates, the entire process slows down, workers are placed under considerable stress, and large stocks of raw materials begin to build up.
A third problem concerns the quality inspection process. Parts that have already been delivered to warehouses are frequently returned after defects are identified — even though an initial quality control check was performed. This results in additional time investment that compounds the existing work-in-progress backlog. Quality control failures of this kind have a cascading effect on production efficiency.
"Departmental silos and poor cross-functional cooperation"
"Plant closure versus FMS technology investment"
"Lean operations, JIT delivery, and MRP reforms"
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