Widget Production Executive Summary: Taylor Inc.

Widget Production Executive Summary
University of Phoenix
ISCOM/305
Kate Bethea
June 6, 2011

Widget Production for Taylor Inc. Taylor Inc is looking to maximize the company’s productivity while minimizing worker’s compensation. As management starts to look at the options available to them, they need to evaluate their operation-management processes. The best option for breaking down the information and seeing what options are best a cost-benefit matrix is best follow. The cost-benefit matrix will show which alternative option will maximize productivity with lesser workers compensation claims.
Cost-benefit Matrix
| |Current |Alternative 1 |Alternative 2 |
|Number of Personnel |17 |6 |9 |
|Labor Wage Per Shift |$5,848 |$2,064 |$3,096 |
|Labor Wage Per Year |$2,105,280 |$743,040 |$1,114,560 |
|Claims |4 |0.3 |1.9 |
|Claim Cost Per Year |$436,000 |$32,700 |$207,100 |
|Wage + Claims Cost |$2,541,280 |$775,740 |$1,321,660 |
|Capital Expenditure |0 |$1,300,000 |$967,000
|
|Savings in Wage + Claim Cost |0 |$1,765,540 |$1,219,620 |
|Year 1 Cash Flow | |$465,540 |$252,620 |
|Year 2-5 Cash Flow | |$1,765,540 |$1,219,620 |
|Output |208 |392 |288 |
|Weight Limit |42 |12 |23 |

The cost-benefit matrix shows that alternative one would be the best option for Taylor Inc to follow. Alternative one has the best savings for worker’s compensation compared to alternative two and current operations. By having reduced wasted motion to 1% alternative one reduces the lifting from 42 pounds to 12 pounds, therefore also helping to lower the workman’s compensation. Though alternative one may have fewer workers the workers can bring productivity up from 208 to 392 units which are also more than what alternative two can produce with a few more workers than alternative one. Alternative one not only lowers labor wages per year but also has almost double the cash flow in year one and continues to raise during years two through 5.
Effects on Productivity Alternative one provides a reduction in down time therefore raising the productivity. Productivity jumps from 208 to 392 units. An upgrade in equipment of $1.3 million in robotics and mobile storage carts is needed. These upgrades will allow company to produce more in the allotted eight hour shift. The life span of the new upgraded equipment is seven years. This will also help production to stay on track. Not only does it allow less down time from wasted motion but should also have a reduced down time for any adjustments or modifications on the new equipment.
Network Strategy There can be some benefits of using a network strategy to streamline operational procedures. Using this type of streamlining can help to keep the employees on the assembly line up to date on where numbers are with production. Management can benefit well with the network strategy as it can be immediate. They will be able to know where the assembly line is on the production numbers and how many worker’s compensations claims are active. It will help to keep communication open between the assembly line workers and management as to how the new system is working.
Conclusion
It has been decided that for Taylor Inc to thrive in production but minimize worker’s compensation that alternative one is the best choice. Taylor Inc will be able to maximize its production and therefore maximize the company’s profits. Spending the extra funds on updated robotics and storage carts will allow Taylor Inc to be successful and save in other areas.