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 showing the cost-benefit for each alternative.
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.
Executive Summary:
The purpose of this executive summary is to evaluate and compare Alternative One and Alternative Two for improving the physical layout of the assembly line for Widget X in Taylor Inc. The goal is to increase productivity, reduce worker's compensation claims, and justify the selected alternative.
Cost-Benefit Matrix:
Alternative One:
- Capital investment: $1.3 million
- Useful life: 7 years
- Reduced wasted motion: 1% of total labor time
- Reduced physical lifting: no more than 12 pounds
- Staffing requirement: 6 people
- Productivity: 392 widgets per 8-hour shift
- Worker's comp claims: 0.3 per year
Alternative Two:
- Capital investment: $967,000
- Useful life: 5 years
- Reduced wasted motion: 7% of total labor time
- Reduced physical lifting: no more than 23 pounds
- Staffing requirement: 9 people
- Productivity: 288 widgets per 8-hour shift
- Worker's comp claims: 1.9 per year
To assess the cost-benefit of each alternative, we need to consider the initial investment, useful life, and expected outcomes. Alternative One requires a higher capital investment but offers greater reductions in wasted motion, physical lifting, and worker's comp claims. Alternative Two has a lower capital investment but offers fewer improvements in these areas.
Effect on Productivity:
Alternative One has the potential to significantly increase productivity with a projected output of 392 widgets per 8-hour shift. This is a substantial improvement compared to the current output of 208 widgets. The reduced walking time and improved layout will allow assembly line personnel to focus more on assembling the widgets rather than searching for parts. This increased productivity can lead to higher profits and improved customer satisfaction.
Possible Benefits of Using a Network Strategy:
Implementing a network strategy can further streamline operational procedures and enhance efficiency. By leveraging technology and automated systems, the assembly line can optimize the flow of materials, reduce bottlenecks, and minimize downtime. This will result in smoother operations, improved coordination, and faster production cycles.
Justification for Selected Alternative:
After careful consideration, Alternative One is the recommended choice for improving the assembly line for Widget X in Taylor Inc. Despite the higher initial investment, Alternative One offers significant improvements in productivity, reduction in worker's comp claims, and long-term cost savings. By decreasing wasted motion and implementing robotics and mobile storage carts, the assembly line will operate more efficiently, leading to higher output and reduced worker fatigue. The projected increase in productivity to 392 widgets per 8-hour shift is an appealing outcome. Additionally, the lower number of required staff can result in reduced labor costs.
In conclusion, Alternative One provides a strong cost-benefit ratio, promising higher productivity, reduced worker's comp claims, and long-term operational efficiency. By adopting a network strategy to further streamline operational procedures, Taylor Inc. can position itself for success in the widget manufacturing industry.