The material cost of lead sheets

Running head: MARKETING
Strategic manufacturing management of Singleton
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1MARKETING
Contents
A. Broad analysis of the company.............................................................................................2
Market analysis......................................................................................................................2
Financial analysis...................................................................................................................2
B. Core competency...................................................................................................................5
Company’s current core competencies..................................................................................5
New competencies on the production of new batteries..........................................................6
C. Product selection...................................................................................................................8
Recommendations for producing new batteries.....................................................................9
D. Capacity strategy.................................................................................................................11
Suggestion about capacity strategy......................................................................................11
Implications of the suggested capacity planning.................................................................14
References................................................................................................................................17

2MARKETING
A. Broad analysis of the company
Market analysis
Singleton Electric has achieved accolades and glory by emerging as one of the famous
privately owned Australian companies. Since the foundation, the company is known for
producing industrial batteries for electric wheelchairs and electric golf carts. The wheelchair
market is a monopolistic type of market with only one customer, which is the Australian
company, selling the wheelchairs to the customers with disabilities and special requirements.
75% of the wheelchairs are flexible enough to operate with one single type of battery
(Bhattacharya et al., 2016). Customized batteries are the cornerstone for enhancing the
stability in the relationship with these customers. On the other hand, the market for the
electric golf cart has customized batteries in lower volume. There are specialized
manufacturers, who hail from North America. The transactions in this type of market are
seasonal. The batteries of the electric golf carts consist of standard designs. Threat of the new
entrants from Asia and Eastern Europe has increased the price sensitivity in the market.
Financial analysis
The sales of the standardised and customised batteries, in case of both the electric
wheelchairs and golf carts, in the last 5 years, are as follows:
Sales 2013 2014 2015 2016 2017
Standard 115,350 126,100 103,100 95,650 93,420
Customized 3550 4200 4610 5390 4860

3MARKETING
Sales
Standard
Customized
Fig: Sales projection of 2013
1
2
3
Fig: Sales projection in 2014
1
2
3

4MARKETING
Fig: Sales projection in 2015
1
2
3
Fig: Sales projection of 2016
1
2
3
Fig: Sales projection of 2017
In all of these figures, it can be reflected that the sales revenue of the standard
batteries is more as compared to the customised (Hill, 2017).
The average selling price of the standard batteries is $140. However, the price of the
customized battery is $600. Annual wage is approximately $64 million. The operational cost,
which is inclusive of power, water, council rates, disposal and plant maintenance is estimated
to be $1.5 million per year. Currently, the annual depreciation cost of the plant equipments is

5MARKETING
estimated to be $2.8 million. The budget behind putting a new plant is about $15 million. The
material cost of lead sheets and lead oxide for both the standard and customised batteries is
estimated to be $60 million. The remaining price of the sulphuric acid and others costs
around $20 million in case of the standard batteries. Case sheets for customized batteries add
$20 million to the material costs. The profit percentage for the batteries is fixed every year.
B. Core competency
Company’s current core competencies
The plants in the company work double in eight hours shifts per day. This adds
flexibility to the operations of 115,000 pumps annually. Plans are there of running a third
shift with the employees, which would add more to the sales volume of the production for the
North American market. Common facilities are ensured for the operations of the standardised
and customized batteries (Hamel & Prahalad, 1990). However, the managers are concerned
over the delivery times of the customized batteries, which are adversely affected through
these common facility operations. The production process is intensified, which involves
stamping of the battery grids from the sheets, preparation of pastes from lead oxide powder,
water sulphuric acid and other chemicals. The technologies used are flexible in terms of
infusing the pastes into the lead grid sheets.
Welding of the leads with the associated connectors, insertion of the paste into the
batteries, fitting of the leads and sealing is done by the skilled and qualified manufacturers. In
this context, Samson, (1991) mentions of the risk assessment exercise, which helps in
ensuring the wellbeing of the staffs. The company complies with the standards and protocols
of the Workplace Health and Safety Act (1974) while conducting these operations.
The raw materials are purchased from the local suppliers, which reflect the high
bargaining power of the company. This is the reason for which the customized lids are