McLeod Motors LTD

Essay by ashhaha2002University, Bachelor'sA-, March 2009

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McLeod Motors Ltd

Case Study


McLeod Motors Ltd factory in Chilliwack, British Columbia makes over 40 models of electric motors ranging from one quarter to 10 horsepower. The company has a number of customers in the original equipment manufacturer (OEM) market, which used the motors as components in larger products, and also in the replacement market. Naturally, McLeod's product mix changed over time as its OEM customers phased products in and out and made annual supply decisions. Recently the company has started facing problems in inventory management since it standardized end shields considering that it would cut both the manufacturing costs and inventories. But the results have been otherwise.

Location of Inventory

The plant is divided into three parts. One half is for production; the other half is divided into a small office, and a Warehouse. The warehouse is used for storing and managing the inventory which is located inside the Plant and is headed by plant manager Sue Reynolds.


Major Function of Inventory

Inventory is a list of goods and materials held available in stock by the business. The inventory store keeps the raw materials, work in process, and finished goods and supplies.

Reason for increase in inventory level

In the beginning of the current quarter it was decided by the management to standardize the end shields. The earlier analysis suggested that such standardization would cut down the inventory levels as well as the manufacturing cost. For attaining optimal productivity, the decision was implemented but didn't yield the expected results. Rather dropping the inventory levels down, it has resulted in a rise.

Action Required

Serious consideration is required to address the problem. As a first step, the decision taken earlier should be rolled back thus eliminating that standardization of end shields...