Your great uncle Luigi, the 1960\'s King of frozen Italian foods has left the bu
ID: 345140 • Letter: Y
Question
Your great uncle Luigi, the 1960's King of frozen Italian foods has left the building. He recently died. Since you were his only living relative, you get his distribution business. Since your uncle was the king in the 1960's, the business is still operating in the 1960's. The situation you inherited is as follows:
300 hourly workers
10 supervisors
Very high hourly turnover rate - unhappy workers
One injury per month
Paper only transactions
High picking error rate
No accurate inventory counts
All picking done by hand
Only one of three shipping bays can be used at a time due to clutter and staging
You have no idea how your operations stacks up with similar operations. Now it's time for you to figure out various avenues of improvement for your company. Detailed business report that addresses each of the above items. Make certain the report covers how you would address and recommend corrections for each of the situations mentioned above. You are to include details regarding each type of equipment that you would recommend purchasing, training and incentive programs, and anything else necessary to get the company operating in a world-class modern environment. Feel free to include diagrams, drawings, equipment specifications, etc. as supplemental materials to your written report.
Explanation / Answer
The present case is an example of a situation, which is unfavourabe. 300 hourly workers, means, high labour costs and labour productivity seems to be very low or, even negative. The necessary step is to increase the productivity of labour through more capacity uilization or retrenchment of the excess labour, if any.
10 supervisors, leading to a very high incidence of Overhead Costs. Care should be taken to relate the work of the supervisors, case to case basis and if needed there should be a revamping of the situation, through Business Process Re-engineering.
Very high hourly turnover rate - unhappy workers, calls for re-drafting of the personnel policy of the Company. Where needed, suitable labour welfare schemes and motivational factors also to be considered.
One injury per month, is an alarming situation and a proper safety policy should be implemented.
Paper only transactions, should be verified with the Budget and Actual Production schedules and thereshould be a proper co-ordination between production and sales departments.
High picking error rate, can be eliminated through Statistical Quality Control Technique.
There should be physical verfication of the inventory, matched with Perpetual Inventory System and Continuous Stock Taking. Inventory Control Techniques like, Stock, Levels, including the conceprt of Stock Out Costs should be evalutaed and remedial actions should be taken.
If needed there should be Autometic Process for Picking, ofcourse on the basis of Cost and Benefit Analysis.
Only one of three shipping bays can be used at a time due to clutter and stagin, should be avoided through proper concept of sequencing and optimal utilization of all the bays.
Besided the above, proper on job training should be implimented, to improve the performance of the workers. If needed and standard hours required to complete a job should be initiated through Time and Motion Study, Jor Evaluation and Method Study.
Overall Cost Reduction and Cost Control, should be implemented, through proper production planning, holding right inventory, reducing production processes, etc.
Labour Incentives Schemes should also be implemented, in oder to boost the morale of the labour force.
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