The Boomer Bangs projects presented to the Strategic Planning Committee were acc

Question

The Boomer Bangs projects presented to the Strategic Planning Committee were accepted for production and roll out by the company is scheduled for January of 2019. The first product scheduled for production is a pill that helps reduce blood sugar levels. Market studies predict that this pill likely will be the most successful of the three products, which is why it is the first product to roll out.

Upper management decided that Luis Montego of the Los Lunas, New Mexico Branch Production Team will take the lead for this project. The plan is for Luis to serve as a model for organizing that will be copied by the rest of the branches so that roll out can be concurrent. Luis knows that his production floor is set up exactly like the rest of the plants. Luis has put some thought into the fact that the new pill production will require additional production lines requiring changes to the existing set up. Luis believes space could be a problem. Luis estimates he will need 200 sq. ft. for the additional line set up. He will also need two conveyor belts as well. Luis knows that some relocation of machinery or line set up will have to be done because pills have to be produced away from direct sunlight and stored at low temperatures.

Luis has also come to the conclusion that he will need additional personnel - one pharmaceutically trained pill machine operator for the day shift and two operators for the night shift. Trained line workers cost $3 more per hour than untrained line workers. Luis also knows that these new workers will need supervising. He may have to restructure the floor staff.

Primary pill ingredients bitt goud, spreading hogweed, Chinaberry (mostly found in India) and burra gokhru will be shipped from Madras, India. However, sourcing of the Chinaberry has been a little difficult for Luis and he suspects the cost of production will have to increase the estimated R&D cost by $0.075 per pill. Additional labor costs and costs of the rare Indian ingredients places the overall production cost of one bottle of 60- pills at $5.75, which includes packaging.

ask 1: Identify and discuss six major areas of the organizing process that Luis Montego must address in organizing the production floor for both existing production and the new project.

Task 2: What specific area needs immediate attention? Why?

Explanation / Answer

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Answer

Here are the areas which needs to be focussed by Luis while organizing the product floor

Production lines – The production lines which is set for the new pill will be replicated to the other branches as well. Hence, Luis must need to focus on having the appropriate Production floor and set this as a model for other branches too.

Required machineries – There is going to be a production of new product and the machineries needs to be very much suitable since the production needs to be made away from sunlight. The Machinery will need to fit according to our requirement and the labours in the company should be able to operate them. It should not be too difficult to operate them.

Skilled labour – Since there are more skilled people required for this production purpose and it costs more than the normal charges of unskilled labours, the selection skilled labours needs more focus and attention. Hiring should be given more importance and the labours who gets selected has to be very well trained. Since they are getting paid more, they should be more careful on this section.

Cost of materials – To produce a pill there will be a lot raw materials which needs to be added as an ingredient. Not all the products are made available in the same place. Some of the ingredients needs to be imported from other countries. In such cases planning needs to be done to check on the alternatives to reduce the cost of raw materials.

Production cost – Since the production cost is going to increase due to increase in labour cost for hiring more people and shippingpackaging charges to import the ingredient from India. Luis must focus on reducing the production cost which may lead increase in product price as well.

Research & Development (R&D) – R&D plays a vital role in the entire setup. Since it is a new product a proper R&D needs to be done from start to the end. R&D is required from a product design until the finished product comes out. All the pro’s and Con’s needs to be analysed and then move ahead with kick-starting the work

2) The specific area which needs immediate attention is R&D Research and Development. Since the shipping of additional ingredients from India is going increase the shipping and packaging cost, the cost of production will increase and Luis will need to focus on what needs to be done to reduce the cost of the product. Some research and analysis needs to be done to see if there is any other alternate to Chinaberry product or if there is no other alternate what can be done to compensate the shipping cost and reduce any other cost which can reduce the cost of production.   

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