Evaluate a company that has personal issues that must be resolved. Read the following
scenario to evaluate Taylor Inc. operations-management processes to help them maximize
labor productivity. Management for Taylor Inc. would also like you to suggest alternative
management techniques to improve productivity.
Taylor Inc. manufactures widgets. There is a particular assembly line for Widget X. This
assembly line includes the assembly of various raw materials, subassemblies, and
packing of the finished widget. Currently, approximately 27% of the total labor time is
utilized in walking by assembly line personnel to obtain the needed parts required to
accomplish their assigned tasks. The average hourly cost, including all benefits, is $43
per hour. Seventeen people are required on the assembly line. Lifting containers that
weigh approximately 42 pounds is required in several of the respective tasks. The current
output of finished widgets is 208 per 8-hour shift. The company incurs an average of four
worker’s compensation claims per year in back injuries due to lifting. An average claim
equals $109,000 and the employee is out for an average of 280 hours. The injured
worker must be replaced to sustain production. By improving the physical layout,
productivity may be improved and worker’s comp claims reduced. Two layouts have been
proposed.
Alternative One reduces wasted motion (walking) to 1% of total labor used on the
assembly line. Physical lifting is reduced to no more then 12 pounds. Six people will be
required on the assembly line. Productivity in finished goods per 8-hour shift will increase
to 392. It is anticipated that worker’s comp claims will be reduced to .3 per year; however,
a capital investment of $1.3 million is required in robotics and mobile storage carts.
Useful life of the equipment is 7 years.
Alternative Two reduces wasted motion to 7% of total labor time while physical lifting is
reduced to no more then 23 pounds. Nine people are required to staff the assembly line.
Productivity will be 288 widgets per 8-shift. Worker’s comp claims are estimated at 1.9
per year. Capital investments are $967,000 with a useful life of 5 years for the equipment.
• Write a 350- to 500-word executive summary that provides justification for the particular
alternative you select. As part of your justification, provide
o a cost-benefit matrix that compares the alternatives.
o the effects the alternative will have on productivity.
o possible benefits of using a network strategy to streamline operational
procedures.
Note. The lowest cost alternative may not be the best alternative.
To evaluate Taylor Inc.'s operations management processes and suggest alternative management techniques, we need to compare the two proposed alternatives and consider their cost-benefit analysis, impact on productivity, and the potential benefits of using a network strategy to streamline operational procedures.
First, let's compare the cost-benefit matrix of the two alternatives:
Alternative One:
- Reduces wasted motion to 1% of total labor time.
- Reduces physical lifting to a maximum of 12 pounds.
- Requires only six people on the assembly line.
- Increases productivity to 392 widgets per 8-hour shift.
- Anticipates decreasing worker's compensation claims to 0.3 per year.
- Requires a capital investment of $1.3 million in robotics and mobile storage carts with a useful life of 7 years.
Alternative Two:
- Reduces wasted motion to 7% of total labor time.
- Reduces physical lifting to a maximum of 23 pounds.
- Requires nine people on the assembly line.
- Increases productivity to 288 widgets per 8-hour shift.
- Estimates worker's compensation claims at 1.9 per year.
- Requires a capital investment of $967,000 with a useful life of 5 years for the equipment.
To determine the best alternative, we need to consider both the cost and the productivity gains:
Alternative One:
- Cost: $1.3 million initial investment
- Productivity: 392 widgets per 8-hour shift
Alternative Two:
- Cost: $967,000 initial investment
- Productivity: 288 widgets per 8-hour shift
Next, we should assess the effects of the chosen alternative on productivity. Alternative One has the potential to significantly increase productivity with its higher output of 392 widgets per 8-hour shift. This improvement can lead to increased revenue and profitability for Taylor Inc. Additionally, the reduced worker's compensation claims, from an average of four to 0.3 per year, will save the company significant costs.
Now, let's explore the possible benefits of using a network strategy to streamline operational procedures. A network strategy involves integrating various components of the supply chain, such as suppliers, manufacturers, and distributors, to improve efficiency and coordination. By implementing a network strategy, Taylor Inc. can:
- Enhance communication and collaboration among different departments and stakeholders, leading to better decision-making and improved operational processes.
- Optimize inventory management, ensuring that raw materials and subassemblies are readily available when needed, reducing the time spent walking to obtain parts.
- Improve logistics and transportation, allowing for faster delivery of finished products to customers, thereby improving customer satisfaction.
- Enable real-time tracking and monitoring of production, allowing for proactive problem-solving and minimizing downtime.
In conclusion, after evaluating both alternatives, Alternative One appears to be the better choice for Taylor Inc. despite its higher initial investment. This alternative offers a higher productivity rate, a significant reduction in worker's compensation claims, and the potential benefits of implementing a network strategy. By investing in robotics and mobile storage carts, Taylor Inc. can improve labor productivity, reduce injuries, and streamline its operational procedures, ultimately leading to improved profitability and competitiveness in the market.