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 to improve labor productivity, there are several factors that need to be considered. One important aspect is the reduction of wasted motion (walking) and minimizing physical lifting to prevent worker injuries and increase efficiency. Let's calculate the cost-benefit matrix for the two proposed alternatives and analyze their impact on productivity:
Alternative One:
- Wasted motion: 1% of total labor time
- Physical lifting: maximum of 12 pounds
- Staffing: 6 people
- Productivity: 392 widgets per 8-hour shift
- Worker's compensation claims: 0.3 per year
- Capital investment: $1.3 million
- Useful life of equipment: 7 years
Alternative Two:
- Wasted motion: 7% of total labor time
- Physical lifting: maximum of 23 pounds
- Staffing: 9 people
- Productivity: 288 widgets per 8-hour shift
- Worker's compensation claims: 1.9 per year
- Capital investment: $967,000
- Useful life of equipment: 5 years
Now let's analyze the cost-benefit matrix by considering the cost of implementation and the potential benefits:
Alternative One:
- Cost: $1.3 million
- Benefits:
- Increased productivity: 392 widgets per 8-hour shift (compared to the current 208)
- Reduced worker's compensation claims: 0.3 per year
- Minimized physical strain on employees
- Improved overall efficiency
Alternative Two:
- Cost: $967,000
- Benefits:
- Increased productivity: 288 widgets per 8-hour shift
- Reduced worker's compensation claims: 1.9 per year
- Minimized physical strain on employees
- Improved overall efficiency
Considering the cost and benefits, both alternatives have their advantages. Alternative One offers higher productivity, lower worker's compensation claims, and improved efficiency, but it requires a higher upfront investment of $1.3 million. On the other hand, Alternative Two has a lower capital investment of $967,000 but lower productivity and a slightly higher number of worker's compensation claims.
To make a selection, consider the specific needs and priorities of Taylor Inc. If the company is focused on maximizing productivity and reducing worker injuries, Alternative One may be the better choice. However, if budget constraints are a concern, Alternative Two might be a more feasible option.
In addition to the specific alternatives, Taylor Inc. could also benefit from implementing a network strategy to streamline operational procedures. This strategy involves optimizing the communication and coordination between different departments, suppliers, and other stakeholders. By improving collaboration and reducing bottlenecks, a network strategy can enhance efficiency, reduce lead times, and improve overall productivity.
In summary, after analyzing the cost-benefit matrix and comparing the alternatives, it is recommended that Taylor Inc. chooses Alternative One to maximize productivity and reduce worker's compensation claims. Additionally, implementing a network strategy can further streamline operational procedures and generate additional benefits.