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Iscom305 wk 4 Widget Production Executive Summary




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Widget Production Executive Summary
ISCOM/305 - Systems Operations Management

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Widget Production Executive Summary
The operations management process of Taylor Inc. needs evaluation in order to assist in
maximizing labor productivity. In order to recommend an alternative management technique a
cost-benefit matrix, listed below, evaluates the current Widget assembly line along with two
Cost-Benefit Matrix
Current Alternave 1 Alternave 2
Wasted Moon 27% 1% 7%
Physical Liing 42 12 23
People Required 17 6 9
Producvity 208 392 288
Worker's Comp Claims 4 0.3 1.9
Capital Investment $ - $ 1,300,000 $ 967,000
Life of Equipment 7 5
Wages Per Shi $ 5,848 $ 2,064 $ 3,096
Wage Per Year (260 working days) $ 1,520,480 $ 536,640 $ 804,960
Cost of Worker's Comp Claims $ 436,000 $ 32,700 $ 207,100
Total Wages and Claims $ 1,956,480 $ 571,404 $ 1,015,156
Savings from Wages and Claims 0 $ 1,385,076 $ 941,324
The recommended management technique as indicated in the above cost-benefit matrix is
Alternative 1. Alternative 1 provides the best option, in that the savings in Workers Comp
Claims exceeds Alternative 2 and the current; resulting in a higher cash flow even after
deducting capital investment. Alternative 1 not only has immediate cash flow impact, it is
superior in many other aspects as well. Productivity drastically increases from 208 to 392 with
less than half of the current workforce. Finally, wasted motion is reduce to a mere 1%,
Alternative 1 reduces the physical lifting from 42 pounds to just 12 pounds; this will drastically
reduce employee down time due to Worker’s Comp Claims.

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Effects on Productivity
Alternative 1 will have a positive effect on productivity. Productivity will almost double
from 208 to 392; an increase of 184 widgets per shift with less than half of the current
workforce. Wasted motion is reduced from 27% to an astonishing 1%. Physical lifting is reduced
from 42 pounds to only 12 pounds; the reduction in lifting will also reduce Workers Comp
Claims and employee absences. Since wasted motion and lifting is reduced, it is believed that
employee moral will increase and in return increase overall productivity.
Benefits of a Network Strategy
Most companies need to periodically reevaluate their network strategy. The main goal in
doing so is to optimize the balance between service and costs. Network strategies can assist in
streamlining operations and improving productivity by eliminating wasteful steps in the
production process. In addition, network strategies can also substantially help by deploying
industry best practices and techniques. The cost of implementing this tool does not have to be
huge; however, the benefits that this technique provides can be substantial.

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Really great stuff, couldn't ask for more.