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Case Presentation y• Dinesh Jain• V Phonekar
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Overview : Mission, Objectives, Core Values & CompetitivePriorities.History of New BalanceQ (a) : Current Operations StrategyQ (b) : What Do The Numbers Look Like?
Assignment Question (c)Assignment Question (d)The New Balance BusinessSuccess of New BalanceThe Six Manufacturing StrategiesDomestic Manufacturing DetailsChallenges Facing New BalanceWorld Class PerformanceQuestions & Answer Session
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To Be Recognizedas the WorldsLeadingManufacturer ofHigh PerformanceFootwear andApparel.
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IntegrityTotal Customer SatisfactionTeamwork
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TechnicalSuperiorityWidth-Sizing
Manufactured in theUSAGrassrootsPromotionsRetailerPartnerships
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Equip the seriousathlete withfootwear andapparel thatprovides the bestperformance, fit,quality andcomfort
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1906 – Foundation by William J. Riley
1934 – Riley partnered with Arthur Hall1954 – Hall sold the business to Eleanor and PaulKidd1961 – Trackster Launched
During 60’s –Popularity of New Balance’s reputationfor manufacturing innovative performance footweargrew1972 – Jim committed himself to uphold thecompany’s founding values 1978 – Anne joined New Balance1980 - New Balance’s First international sales office and first European manufacturing facility opened
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1982 –Company reached $60million in salesand debuted the well-received 990 runningshoe1984 – Jim and Anne got married
1990 –Company unveiled is New balanceSuspension System2004 –New Balance declared that it wouldmatch whatever possible its associates
donatedNew Balance adopted New BalanceExecutional Excellence NB2E)
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$9 Billion in shoe sales in 2004
New Balance has an 11.36% market share inthe US
Total Sales for New Balance in 2004 equaledapprox. $1 billion.
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US Market in 2005 - 400,000,000
New Balance US Market Share – 11.36%
NB Shoe sold – 1x2 = 45,424,000
% of Manufactured in US = 25%
NB’s shoes made in US – 3x4 = 11,356,000
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Cut through Assembly made – 5x33%=3,747,480
Sourced Upper made in US – 5x67% = 7,608,520
Extra Cost of Cut through Assembly – 6x$13 =48,717,240
Extra Cost of Sourced Upper – 7x$0.5 = 3,804,260
Total Extra Cost to Manf in US – 8+9 = 52,521,500
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Spend less on marketing, spend more onproductionReduce time and cost for deliveryQuickly move products into the marketstreamStay true to company's American roots
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Continued
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Products
Services Processand
Technology
Capacity
HumanResources Quality
Facilities Sourcing OperatingSystems
Continued
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Increase In
• US
manufacturingcosts
• 24 hour
domesticshipping costs
Decreases In
• Inventory
Costs• Overseas
shipping costs
• Lead Time
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