Northboro Machine Tools Corporation - Outline
Wiley Belknap, Eric Huntermark, Zachary Jumba, Alexander Spoont, David Okwaisie

1) Background a) Founded in 1923 by two mechanical engineers (James North and David Peterboro), made take and armored vehicle parts during WW2 b) How do they make Money? i) By 1975, they “had developed a reputation as an innovative producer of industrial machinery and machine tools” which were sold mostly to local/regional firms ii) Incorporated CAD/CAM into production process which allowed machine presses to manufacture metal parts by responding to computer demands iii) By 1991, CAD/CAM accounted for 45% of sales, presses and molds = 40%,

2) Competition and Outside Pressure iv) CAD/CAM Industry (1) Faced a number of large competitors (GE, HP, Digital Equipment) (2) Aggressive Entry of Foreign Firms/Dollar rising

3) Northboro’s Response To declining revenues c) Devote a larger portion of R&D budget to CAD/CAM d) Corporate Restructuring #1 v) 1989 – sold two unprofitable lines of business, two plants, five leased facilities, and reduced personnel vi) Costs = 44 million e) Corporate Restructuring # 2 vii) Altered manufacturing Strategy, refocused sales and marketing, new procedures to further reduce staff and facilities viii) Cost = 60 million f) Total Restructuring in 1989/91 = 135 million, resulted in “leaner” company g) Restructuring led to the development of what Northboro refers to as the Artificial Workforce ix) This product would allow a firm to design, manufacture, and package a product only using a computer (3) By 10/1991, Northboro had orders of 75 million and year end back orders of 100 million (4) This product was