Corwin Corporation

By June 1983, Corwin Corporation had grown into a $150 million per year corporation with an international reputation for manufacturing low-cost, high-quality rubber components. Corwin maintained more than a dozen different product lines, all of which were sold as off-the-shelf items in department stores, hardware stores, and automotive parts distributors. The name "Corwin" was now synonymous with "quality." This provided management with the luxury of having products that maintained extremely long life cycles.

Organizationally, Corwin had maintained the same structure for more than 15 years (see Exhibit I). The top management of Corwin Corporation was highly conservative and believed in using a marketing approach to find new markets for existing product lines rather than exploring for new products. Under this philosophy, Corwin maintained a small R&D group whose mission was simply to evaluate state-of-the-art technology and its application to existing product lines.

Corwin's reputation was so good that they continually received inquiries about the manufacturing of specialty products. Unfortunately, the conservative nature of Corwin's management created a "do not rock the boat" atmosphere opposed to taking any type of risks. A management policy was established to evaluate all specialty-product requests. The policy required answering yes to the following questions:

• Will the specialty product provide the same profit margin (20 percent) as existing product lines?

• What is the total projected profitability to the company in terms of follow-on contracts?

♦Reprinted from H. Kerzner, Project Management: A Systems Approach to Planning, Scheduling and Controlling, 6th ed. New York: John Wiley, 1998, pp. 509-517.

Exhibit I. Organizational chart for Corwin Corporation

• Can the specialty product be developed into a product line?

• Can the specialty product be produced with minimum disruption to existing product lines and manufacturing operations?

These stringent requirements forced Corwin to no-bid more than 90 percent of all specialty-product inquiries.

Corwin Corporation was a marketing-driven organization, although manufacturing often had different ideas. Almost all decisions were made by marketing with the exception of product pricing and estimating, which was a joint undertaking between manufacturing and marketing. Engineering was considered as merely a support group to marketing and manufacturing.

For specialty products, the project managers would always come out of marketing even during the R&D phase of development. The company's approach was that if the specialty product should mature into a full product line, then there should be a product line manager assigned right at the onset.

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