Submitted by Group 2: Akshay Lal P(P16037), Abhishek Pandey(P16039), Sourabh (P16040),

V.Ganga Phanindra(P16056), Viral Satra(P16058)

Whistler Case
Company background
Whistler was founded by Dodge Morgan in the early 1970s. It designed and manufactured
electronic specialty products in the founders garage. As revenues began to grow, the
company relocated itself to a more modern facility in Westford, Massachusetts. The company
soon became a dominant and profitable player in small but growing radar detectors market.
Its first radar detector, designed in 1978, became a leading seller and it introduced two more
models in 1982. Whistler was acquired by Dynatech, a Burlington, Massachusetts company.
Between 1982 and 1987, the demand for radar detectors increased sharply in US. To serve
the growing consumer market, the company introduced nine new models between 1982-1987.
The demand growth attracted new competitors, most of which sold radar detectors
manufactured under subcontracting arrangements with Asian suppliers, which led to decline
in average price of radar detectors. Due to this increased competition, in 1986, the financial
performance of the company deteriorated rapidly. By the end of the summer 1986, the
company started losing money for the first time at the rate of almost $500,000 per month.
Also, two states had recently banned radar detectors
Traditional approach to manufacturing.
Manufacturing at Whistler is divided into two sets of operations. 1. Subassembly production
2. Final assembly. Subassembly is carried out Whistlers 40000 sq.ft plant in Westford. The
major three subassemblies a) Microwave subassembly b) a radio frequency subassembly c) a
control subassembly are done in-house. Subassembly involves various steps like surface
mounting, inspection, hand stuffing, testing, water knife, rework area, RF tuning, Functional
testing. As the models and size of the batch has been increasing Whistler moved the Final
assembly in 20000 sq.ft plant in Fitchburg. It involves six steps and after careful inspection
radar detectors are send to packaging. The flow of materials is batch-and-Kit method.
Small electronic components used by whistler were supplied by vendors located in Asia and
lead time from order to delivery was about 10 weeks. Subassemblies were kitted in
Westford and trucked to Fitchburg for final assembly and the entire batches will trucked back
to Westford plant. Major problems in the subassembly were form components sourced from
vendors and SMT technology. Throughput time of the traditional manufacturing is 23 days
even though actual production time is 8 hours.
Decision problem statement
How to improve the profitability of the company?
Alternatives
Option 1: To implement Model Production Line (MPL) in the existing manufacturing plants.
Option 2: To outsource additional low-end products to existing Korean supplier.
Option 3: To move all production off-shore and shut down its two domestic plants.

1
 Submitted by Group 2: Akshay Lal P(P16037), Abhishek Pandey(P16039), Sourabh (P16040),
V.Ganga Phanindra(P16056), Viral Satra(P16058)

Criteria for Evaluation

The options are evaluated based on the following criteria.
Cost of manufacture
Quality of the product
Ability to introduce new products to the market
Market responsiveness
Impact on Workforce
Core competency

Evaluation of alternatives
Saving estimation based on the pilot results of RACE-ME

Category Jan-87 Jun-87 Benefits

Output per direct employee 100 237 58% saving of direct labour
Output per sq ft 100 146 32% saving of shop floor space
Work-in-process 100 46 54% saving of WIP
RF board: 1st pass yield 100 114 14% increase in 1st pass yield
Variable Overhead 100 68 32% saving of variable overhead
Scrap 100 17 83% saving of scrap

Using these saving estimations, cost estimation can be determined for JIT implementations.
Cost estimation of the option Outsource low-end can be determined with below assumptions-
1. Material cost will be the average of current material cost and the cost of material if all
outsourcing strategy is implemented.
2. Scrap cost will be the average of current scrap cost and the cost of material if all outsourcing
strategy is implemented.
3. Direct labor cost will be the average of current labor cost and the cost of labor if all
outsourcing strategy is implemented.
4. Variable overhead cost will be the average of variable overhead cost and the cost of variable
overhead if all outsourcing strategy is implemented.
5. Shipping, duty and US coordination cost will be half of that of all outsource strategy.
6. Westford and Fitchburg plant will face half the work burden if low-end products are
outsourced. And therefore fixed overhead of these plants will reduce to half.

Cost comparison
Current - Outsource low- All
Status quo end JIT outsource
Material 31.9 31.19 31.9 30.48
Scrap 3.83 2.375 0.6511 0.92
Direct Labour 9 5.44 3.78 1.88
Variable overhead 6.3 6.88 4.284 7.46
Shipping - 0.15 - 0.3
Duty - 1.2 - 2.4
US coordination costs - 0.5 - 1

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 Submitted by Group 2: Akshay Lal P(P16037), Abhishek Pandey(P16039), Sourabh (P16040),
V.Ganga Phanindra(P16056), Viral Satra(P16058)

Fixed overhead
Westford 3.38 3.38 3.38 3.38
Westford plant 9.28 4.64 9.28 -
Fitchburg plant 8.14 4.07 - -
20.8 12.09 12.66 3.38
Total 71.83 59.825 53.2751 47.82

Option 1: Implement JIT RACE-ME

26% cost saving- $53.27. Compensation may be required to pay to the employees of
Fitchburg
Quality would improve
o Quality inspection, Line shutdown procedure would help keep the process under
control by drawing attention to defects
o Statistical process control
As 24 month plan is set to implement JIT at plan level, Whistler would not be able introduce
new products.
With the through put time reducing form 23 days to 1.5 days, company would be well
equipped to respond to market changes. The raw materials will still take 10 weeks, but as the
parts are similar, raw materials can be procured in excess.
Number of laborers required would reduce with Fitchburg plant shutting down, the laborers
will lose their job and could create problems.

Option 2: Outsource low-end

17% cost saving- $59.83. Only the part of manufacturing will be outsourced and hence the
cost saving is not significant.
With only low-end products outsourced, employees would still need to manufacture other
products. Possibility of introducing new product is higher.
Responsiveness would be low as the throughput time would still be 23 days.

Option 3: Outsource manufacturing

Highest cost saving. 44% cost saving-$47.81.

Standard quality would be maintained.
The company can now focus entirely on designing and engineering. Therefore companys
ability to introduce the new product.
With entire manufacturing outsourced, the transit time from asia to US will be a major
hindrance to adopt to changing market.
This option will be changing the entire manufacturing system and therefore the companys
focus will shift from manufacturing to design and engineering, which is its core strength.

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 Submitted by Group 2: Akshay Lal P(P16037), Abhishek Pandey(P16039), Sourabh (P16040),
V.Ganga Phanindra(P16056), Viral Satra(P16058)

Recommendation
Based on the evaluation of options, we would recommend that Whistler Corporation should
go for the option of moving the entire production offshore and closing down the companys
two domestic plants. This option gives the company the flexibility and adaptability to the
changing market scenario. As Whistler is currently operating in a niche section whose market
growth is declining and margins reducing drastically due to intense competition, the company
should focus on their R&D to come up with new products and products segment that they
could adapt for future. The option is in line with this strategy and gives the additional benefit
of reducing overheads and investment on a product category that is already in its decline
phase.
Problems likely to be faced and how to tackle them:
Before closing down the existing capacity, Whistler should identify a proper contract
manufacturer for its products. As the Whistler products are known for its high quality and
performance, it is important for the company to take steps towards ensuring proper quality
products from these manufacturers that dont hamper their brand name. The company should
qualify and on-board two or more contract manufacturers at different scales of production in
order to gain better control over its production process. This entire process may take 1-2
years as the contract manufacturers should be trained and synchronised with Whistlers
manufacturing processes and quality standards.
The phasing out of domestic plants should occur sequentially as it should not affect the
production volumes. Based on the rate at which new contract manufacturers are on-boarded,
the company can phase out each of its domestic plants. As the Westford plant is located at a
place where there is scarcity of semiskilled labours and space, it would be easier for the
company to disinvest from this production facility. The packaging operation could be shifted
to the Fitchburg plant while the sub assembly operations outsourced. Later the final assembly
operations carried out in Fitchburg plant could be transferred to offshore centres.
As the company believes that quality and product design is their core competency, it should
invest more in its R&D to bring about more high quality innovative products and processes to
the market. They should transfer its testing department to contract manufacturer locations, but
owned and operated completely by the company. This helps in rectification of production
quality issues that may arise in situ as the manufacturing location is far down the east from
US.
Another issue the company has to face is the production volume issues. As the market is in a
decline phase and expected to reduce by 10% by the end of two years, the companys
production worries are expected to be replaced by a lack of demand for products. The
sequential approach of phasing out domestic production hence has to be supplemented by an
equivalent addition of new contract manufacturer.