Northboro Machine Tools

In: Business and Management

Submitted By dieseldrew84
Words 665
Pages 3
Northboro Machine Tools Corporation * History * Founded in 1923 by two mechanical engineers and designed machinery parts, presses, dies, and molds * 1970s, firm begins its entry into computer aided manufacturing and design or CAD/CAM * By 1991, CAD/CAM made up 40% of sales * Revenue in 1991 * CAD/CAM accounted for 45% of sales * Metal presses, dies and molds accounted for 40% of sales * Miscellaneous machine tools accounted for 15% of sales * Recent developments * Revenue decline from $607 million to $504 million from 1985 to 1991 * Restructuring in 1989 and 1991 * 1989 restructuring – sold two unprofitable lines of business, sold two plants, eliminated five leased facilities, and reduced personal; restructuring costs were $44 million * 1991 restructuring – altered manufacturing strategy, refocused sales and marketing approach, further staff reductions; restructuring costs were $60 million * Greater share of R & D devoted to CAD/CAM which developed a system that management believed would redefine the industry called the Artificial Workforce * CAD/CAM * Manufactures metal parts by responding to computer commands * Allows an engineer to design a part to exact specifications on a computer * Artificial Workforce * Advanced hardware, software, and applications that distribute information around a plant * Allowed a product to be designed, manufactured, and packaged solely by computer * $75 million in orders by October 1991, $100 million backlog by year-end * Management expects sales growth after 1993 to rely on new applications and creation of add-on features/improvements * Cyclical product * Competitors * Press and mold companies are small or regional firms with limited clientele * CAD/CAM industry…...

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