Pyrex

11 Pages Posted: 21 Oct 2008

See all articles by Timothy M. Laseter

Timothy M. Laseter

University of Virginia - Darden School of Business; Emory University - Goizueta Business School; University of Navarra, IESE Business School; London Business School; New York University (NYU) - Leonard N. Stern School of Business

Leena Baran

University of Virginia - Darden School of Business

Abstract

The global sourcing department at World Kitchen faces a make/buy decision that could result in closing a 90-year-old facility in Pennsylvania. Concerns about labor costs and capital investment both come to the fore owing to ongoing union negotiations and the upcoming need for a major refurbishment of the glass-making furnace. Although many potential suppliers offer lower labor costs, tariffs, transportation, and quality must be factored into the decision.

Excerpt

UVA-OM-1323

Rev. Feb. 21, 2014

PYREX

On the first day of her MBA internship in 2006, Leena Baran was greeted by World Kitchen's Steve Trussell, vice president of global sourcing, and Andrew Pullenza, the newly hired director of purchasing. Within a few short minutes, she was given her assignment: make a recommendation on a make-versus-buy decision for PYREX, the company's strongest brand. The aging PYREX plant needed to have a major equipment replacement within two years. On top of that, the labor contract with the union workers that was being negotiated was perilously close to an impasse. Should World Kitchen continue to produce the product line itself, or should it build inventory ahead of a plant shutdown and begin purchasing the products from overseas?

History of World Kitchen and PYREX

World Kitchen, LLC, manufactured and marketed bakeware, cookware, dinnerware, kitchen and household tools, range-top cookware, and cutlery. Its brands included PYREX, CorningWare, Corelle, EKCO, Baker's Secret, Magnalite, Chicago Cutlery, and OLFA. The company was formed in 2000 with the backing of buyout specialists Kohlberg, Kravis Roberts & Co. (KKR) as a combination of three separate organizations: Corning Consumer Products, EKCO Group, and General Housewares. In 2004, World Kitchen sold its popular OXO line of products to Helen of Troy for approximately $ 275 million, helping it continue its recovery after emerging from bankruptcy in 2003.

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Keywords: operations strategy, make-buy, outsourcing

Suggested Citation

Laseter, Timothy M. and Baran, Leena, Pyrex. Darden Case No. UVA-OM-1323, Available at SSRN: https://ssrn.com/abstract=1282909 or http://dx.doi.org/10.2139/ssrn.1282909

Timothy M. Laseter (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/laseter.htm

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Leena Baran

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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