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
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To evaluate Taylor Inc.'s operations-management processes and suggest alternative management techniques to improve productivity, we need to consider the given information and analyze the different alternatives available.
First, let's compare the two proposed alternatives and their impact on labor productivity and worker's compensation claims:
Alternative One:
- Reduces wasted motion to 1%.
- Reduces physical lifting to no more than 12 pounds.
- Requires six people on the assembly line.
- Increases productivity to 392 widgets per 8-hour shift.
- Anticipates reducing worker's comp 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%.
- Reduces physical lifting to no more than 23 pounds.
- Requires nine people on the assembly line.
- Increases productivity to 288 widgets per 8-hour shift.
- Estimates worker's comp claims at 1.9 per year.
- Requires a capital investment of $967,000 in equipment with a useful life of 5 years.
Now, let's construct a cost-benefit matrix to compare the alternatives:
Alternative One:
- Benefits: Increased productivity, reduced worker's comp claims
- Costs: Capital investment of $1.3 million
Alternative Two:
- Benefits: Increased productivity (though lower than alternative one), reduced worker's comp claims (though higher than alternative one)
- Costs: Capital investment of $967,000
To determine which alternative is more justified, we need to weigh the benefits against the costs. Considering the higher productivity and lower worker's comp claims, Alternative One seems more favorable in terms of long-term efficiency and cost reduction.
The effects of Alternative One on productivity are significant. The productivity per 8-hour shift would increase from 208 widgets to 392 widgets, more than doubling the output. This is achieved by reducing wasted motion and physical lifting, which leads to more efficient assembly line operations.
In addition to the suggested alternatives, Taylor Inc. should also consider implementing a network strategy to streamline operational procedures. This involves integrating various processes, departments, and suppliers through effective communication and information sharing. Benefits of a network strategy may include:
1. Improved coordination: A network strategy allows for better coordination among different departments, resulting in smoother workflow and reduced delays.
2. Enhanced efficiency: By streamlining operational procedures, a network strategy can eliminate redundant tasks and optimize resource utilization, leading to improved overall efficiency.
3. Cost reduction: With better coordination and efficiency, cost reduction opportunities arise, such as minimizing inventory holding costs and reducing lead time.
4. Better customer service: A network strategy enables real-time information sharing, allowing the company to respond quickly to customer demands and provide better service.
In conclusion, based on the cost-benefit analysis and its impact on productivity, Alternative One is the recommended choice for Taylor Inc. The implementation of a network strategy alongside this alternative could further enhance operational efficiency and provide additional benefits.