Strategic Reorganization
Hedstrom Plastics headquartered in Ashland, Ohio is one of the largest manufacturers of rotomolding plastic (Official Website, n.d.). In the recent past, the company has been filed for bankruptcy on the basis of two potential factors i.e. declined sales and reduced profitability (The New York Times, 2012). The company can overcome these issues by changing its approach to sustainability.
The plastic is used mainly for the manufacturing of toys. During its process of production, the plastic is placed in an oven for the purpose of molding. The company has already cleared its intention to sustainability by replacing fossil fuels with alternative sources of energy (such as solar energy) to heat its oven (Bregar, 2010). However, these methods are hardly justifiable, as they have no positive impact on product quality and in the background of current drop in fossil fuel prices (Krauss, 2016).
It is found that CNN Routers (that are controlled by computers) is an innovative technology that can cause handsome reduction in the production cost if used for molding. It promises multidimensional benefits that have already been tested in the plastic industry (as used by Trilogy Plastics Inc.). It is not only cheaper than other sources of energy, but its automated system also ensures comparatively better quality and allows for reduction in labor cost by ruling out the need for much human input (Bregar, 2010).
Therefore, the company is recommended to follow into the footsteps of Trilogy by adapting this innovation solution. Improved quality of product will add value to business and will be source of attraction for customers, and low production cost can be translated into increased profit margins. Hence, the company will be able to combat the issues at the bottom of being on the edge of bankruptcy.
References
Bregar, B. (2010). SPE provides update on machine technology. Plastic News. Retrieved May 14, 2016 from http://www.plasticsnews.com/article/20100426/NEWS/304269962/spe-provides-update-on-machine-technology
Krauss, C. (2016). Oil Prices: What’s Behind the Drop? Simple Economics. The New York Times. Retrieved May 14, 2016 from http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0
Official Website. (n.d.). Hedstrom Plastics: The Rotational Molding Experts. Retrieved May 14, 2016 from http://www.hedstromplastics.com/
The New York Times. (2012). Hedstrom Has Filed For a Bankruptcy. Retrieved May 14, 2016 from http://www.nytimes.com/2000/04/12/business/hedstrom-has-filed-for-a-bankruptcy.html
