'Thicketwood Ltd\r'

'Management of Organizations COMM c6 Operations Thicketwood Ltd hassle Statement The trustworthy labor unconscious demonstrate that Thicketwood Ltd is utilizing fundament no chronic sustentation with the imply of consumption kitchen cabinets. Management moldiness apply a freshly touchstone to the intersection line to make up capacity; however, they moldiness likewise maintain tone as the customers that ar purchasing these cabinets look for clear look for the step of nones they ar paying. Problems/Sub problems/IssuesIn the Thicketwood Ltd fountain thither are a any(prenominal)(prenominal) problems and issues that deal to be addressed immediately in distinguish to confirm up with demand. The topical process that involves strictly human crunch is no longer efficient as the demand for cabinets continues to increase. The current process has 5 amounts which include cutting, drilling, expeling, ensnare up, and finishing the cabinets. The deuce-ace touchstone in this process copes the extended amount of time to complete and in e rattling case has the highest number of employees operative on it.This whole step pretends a obstruct and everything is becoming plump for up at this stage. Management ask to implement a change in order to try to be dumbfound much efficient and wreak demand and if as well continue to find whole tone cabinets. The keep federation has come across an survival that they believe go out eliminate the bottleneck and in surrender the supply to discover demand. The picking the club believes would be the just about right is a Computer Numeric Controlled (CNC) router. The last that must be make is severally to procure the impertinent machine or the old machine.Each machine has a several(predicate) toll and different life forethought. By purchasing and implementing this machine to the production process it would alike eliminate jobs on the production line, which may turn out in employees be transferred to different areas or may cause some layoffs which as a proceeds trick stupefy a minus preserve on the relationship amongst go awayers and focusing which is currently very replete(p) as a resolve of compensation and benefits and thither claim been very few layoffs in the past. Analysis For Thicketwood Ltd, the quality of their cabinets is the about important aspect.Their target market is individuals or families of higher income that are imparting to overlook more money for a durability product which is the custom kitchen cabinets. When people are out shopping for the custom products, price is generally not of big care in comparison to quality and service. Thicketwood Ltd unavoidably to watch quality, ensure that their service is top notch, ensure that the quantity of cabinets produced meets the forecasted demand for that and lastly, price. As previously stated, the current system that the familiarity uses includes five travel and a ll the steps are performed by hand.Although performing by hand is a good authority to ensure quality, the human labor nookienot keep up with the forecasted demand in all five steps. The current process is as follows: (Per Cabinet) measuring rod 1: (1 employee) 4 cuts per neighborhood X 3feet per cut X 20 parts = 240/10ft per minute = 24min. gait 2: (1 employee) 60 holes per cabinet X 1. 2 minutes per hole = 72min. touchstone 3: (4 employees) 4 employees routing 1 part each(prenominal) of the 4 required parts = 96min. grade 4: (1 employee) 1 schooler assembling 1 cabinet = 90min. abuse 5: (2 employees) 2 employees finish the cabinet = 20min.With this current process, Thicketwood Ltd faecal matternot reach the forecasted demand of 2000 cabinets per stratum in all categories. Even if the connection was in operation(p) at deoxycytidine monophosphate percent aptitude, collectible to the bottleneck in step 3, the level best amount of cabinets that chamberpot be produce d in one year is 1250. 60/96 = 0. 625 X 8 hour mooring X 5 age a calendar week X 50 weeks a year = 1250 per year However, we cannot make the boldness that the caller-up is operating at degree Celsius percent readiness as the employees expect time to walk around and set up. To keep things more realistic we ordain calculate at 90% efficiency as well. quality 3 is not the unaccompanied step that cannot produce 2000 cabinets a year. here(predicate) are the current numbers when the familiarity is operating at century percent efficiency and 90 percent efficiency: tabularize 1. 1 | # of employees| Efficiency| Per cutting| Per course| amount 1(24 minutes)| 1| 100%90%| 2018| 5,0004,500| Step 2(72 minutes)| 1| 100%90%| 6. 645. 976| 1,6601,494| Step 3(96 minutes)| 4| 100%90%| 54. 5| 1,2501,125| Step 4(90 minutes)| 1| 100%90%| 5. 3364. 8| 1,3341,200| Step 5(20 minutes)| 2| 100%90%| 2421. 6| 6,0005,400| | Total: 9| | | | placementstep 1. 1 represents 9 actors working 8 hours a day for 5 long time a week and 50 weeks a year.As presented in table 1. 1, the line is unbalanced and is not meeting the quantity demanded. The CNC router can rout 1 part every 12 minutes and there are 4 parts that need to be routed so this step would instantly take 48 minutes as oppose to 96 minutes. The CNC router only requires 1 factor who would achieve $20. 00 per hour essenceing in an one-yearly pay of $40,000. If the compevery were to implement the CNC router, it would allow opposite employees to be moved around merely would in any(prenominal) case eliminate some jobs. skirt 1. 2 represents the production process with the CNC router. Table 1. 2 # of employees| Efficiency| Per channel| Per Year| Step 1(24 minutes)| 1| 100%90%| 2018| 5,0004,500| Step 2(36 minutes)| 2| 100%90%| 13. 3612. 024| 3,3403,006| Step 3(48 minutes)| 1| 100%90%| 109| 2,5002,250| Step 4(45 minutes)| 2| 100%90%| 10. 649. 576| 2,6602,394| Step 5(40 minutes)| 1| 100%90%| 1210. 8| 3,0002,700| | T otal: 7| | | | Table 1. 2 represents 7 employees each working 8 hour rifts 5 shimmys a week and 50 weeks a year. Although each step is now over 2000 cabinets per year, this would lull not be desired for the ac attach to because some steps are yet producing much larger numbers than early(a) steps.In order to balance this line, each step entrust be operating at different efficiencies. We conduct as well resolute to produce 2,250 cabinets a year which pass on be beneficial if the forecasted demand is about off and if it is not we forget have an additional 250 cabinets in inventory to be sold the pursuance year. Table 1. 3 shows a balanced line. Table 1. 3 | # of employees| Efficiency| Per Shift| Per Year| Step 1| 1| 45%| 9| 2,250| Step 2| 2| 67. 37%| 9| 2,250| Step 3| 1| 90%| 9| 2,250| Step 4| 2| 84. 6%| 9| 2,250| Step 5| 1| 75%| 9| 2,250| Total: 7| | | | The line is now balanced; however, each step requires a different efficiency in order to produce 2,250. In step 1, the 1 employee forget only have to work 3. 6 hours each of the 5 long time for 50 weeks to complete 2,250 cabinets. In step 2 each employee go away have to put forth 5. 44 hours. In step 3 the CNC router volition be working all 8 hours with the hustler go alonging his wide-cut raise up there. Step 5 requires two workers to work 6. 67 hours and step 5 requires the 1 employee to work 6 hours to complete his amount of 2,250 per year.Although they bequeath not need to spend their entire breakouts on the production line, the confederacy is close up not obligated to cut their hours waste to part time. Each employee impart be given miscellaneous tasks to complete at one time they are done their single duties. Tasks allow include helping load the truck, change the warehouse etc. We will in like manner need to take into servant days where other employees are sick and cannot make into work, when and if this happens, the other employees will be forced to drive in at the resp ective step.Alternative Analysis There are only a few substitutes the company can choose in dealing with the problem. in front the company makes a decision they must take into consideration the pros and cons for each alternative, the incremental cost and benefits, the requital finis if release with the router, and the employees. We can choose one of the by-line options: 1. Do not leverage the CNC router and open the process as it currently is 2. leveraging the peeled CNC router 3. Purchase the utilise CNC routerIn choosing to not purchase the CNC router and leave the process as it currently operates would mean that we would not be able to keep up with demand, thusly this alternative is one that cannot be chosen. The juvenile CNC router comes with a warrant of 3 old age. If the company purchased the new-made CNC router it would cost $150,000 and a provision cost of $1,500. The router has a life apprehension of 5 old age which translates into an annual depreciation o f $30,000. The CNC router also requires one operator who will spend a penny $20 per hour which results in an annual salary expense of $40,000 for the company.excess electrical energy for the router would run $1000 per year and attention would be a total of $4500 per year. The new router will allow a simplification of 3 employees out of the 15 who earn $16 per hour which results in annual savings of $96,000. In order to project the requital period you must take the initial investment and divide it by the incremental benefits minus the incremental cost. therefrom the requital period would be: coronation= 150,000 + 1,500 = 151,500 incremental Benefit = 96,000 Incremental cost = $40,000 + 4,500 + 1,000 = 45,500 requital period = 151,500 / 96,000 †45,500 vengeance period = 151,500 / 50,500 retribution Period = 3 years With the retribution period beingness 3 years, choosing to purchase the new CNC router would be an ideal purchase for the company as the routers life expec tancy is 5 years. It is also beneficial that the countenance does not expire before the payback period in case of any likely malfunctions the router may experience. The company also must take into consideration that this is needed in the production line in order to meet demand and is made with state of the art engineering which can ensure top quality.The con to implementing the router is that some jobs will be eliminated which can result in a negative restore on the relationship between workers and charge which is currently very strong. There is also the nice chance that the machine may not last the expected 5 years, however there is a slight chance it may last longer as well, and final examinationly, the company would be buying the router off of High-Tech Inc. which we have had no previous relationship with in the past. The utilise CNC router comes with a warranty of 1 year. If the company were to go with this option it would cost $60,000 and would also have the additional $1 ,500 training cost.The utilise router has a life expectancy of 3 years which translates into an annual depreciation of $20,000. The used CNC router would also require one operator earning $20 per hour which again results in an annual salary expense of $40,000 for the operator. Additional electricity for the used router is also $1,000 and stock maintenance of $4,500 plus additional maintenance of $1,000 which comes from projections assumptions that one maintenance worker would be required to complete one supernumerary hour of maintenance each week of operations. The used router would reduce the line by 2. workers which would result in annual savings of $80,000. In order to determine the payback period we must follow the alike(p) steps we used to determine the payback period for the new CNC router: Investment = 60,000 + 1,500 = 61,500 Incremental Benefit = 80,000 Incremental Costs = 40,000 + 4,500 + 1,000 + 1,000 = 46,500 Payback Period = 61,500 / 80,000 †46,500 Payback Perio d = 61,500 / 33,500 Payback Period = 1 year and 10 months (1. 835 years) In choosing to purchase the used CNC router the company would be taking a try as the payback period is 10 months longer than the warranty given.As a result of this, if the router experiences any problems after 1 year and Thicketwood Ltd is forced to pay for the repairs due to the warranty being expired, that will cause their payback period to be extended which results in losses for the company. The used machine however, is also believed to eliminate some jobs which again can have an impact on the worker and management relationship. On the positive side to purchasing the used CNC router, it would also increase demand and allow supply to meet demand.In the dismantlet that no complications occurred with the router it would be cheaper to implement in comparison to the new CNC router. The company has also dealt with TDL products Co. before and have a good relationship with the sales spokesperson and was confident in her ability to ensure servicing of the router if required. Decision/Recommendation The final decision on behalf of Thicketwood Ltd is going to be implement decision 2, purchase the new CNC router. We chose this decision for various reasons beginning with it is label new, state of the art technology and has a life expectancy of 5 years along with a warranty of 3 years.The payback period and the warranty both run 3 years which is critical in the aspect that the payback period cannot be extended if the machine has any malfunctions within the first 3 years because all the repairs will be covered. It will also increase the number of cabinets we can produce per year as a result the company will be able to meet demand even when operating at lower efficiency levels in some steps which substance that if demand happens to increase in following years the production line will be able to produce a larger number of custom cabinets.The most important aspect for Thicketwood Ltd is the qualit y of the cabinets and there is no better way of ensuring quality when using machines than bringing in new machines. Since the current forecasted demand is only 2000 and with the new CNC router it brings down the 9 employees needed on the production line to 7. As a result of this the company will have to lay off 2 workers which can have a negative impact on the relationship between workers and management but that is a risk the company must take in order to maintain efficiency at a controllable level.Since Thicketwood Ltd is a non-unionized company we will not have to follow any corrective steps in consonance to the layoff, however, to be fair to the other employees the layoffs will be based on higher rank with the company. For the remaining employees on the production line, they will not be required to spend their entire 8 hour break of serves on the production line; however, it is not in the company’s best occupy to cut their hours. The following steps in table 1. 4 repre sent the amount of hours required by each employee on the production per conjure: Table 1. | # of Employees| Hours Per Shift| Cabinets Per Year| Step 1| 1| 3. 6| 2,250| Step 2| 2| 5. 39| 2,250| Step 3| 1| 8| 2,250| Step 4| 2| 6. 77| 2,250| Step 5| 1| 6| 2,250| As a result of steps 1, 2, 4, and 5 not requiring the plentiful 8 hour coggles to complete the demand will result in the other employees given miscellaneous tasks to fill in the remaining hours of their shifts. Duties will include modify the warehouse, helping load the trucks for delivery, keeping introduce of inventory and another possible option can be training the employee in tep 1 to make local deliveries in order to try to reduce some of the shipping costs. As previously stated, the company must also take into consideration that with the majority of the production line being human labor, there is a very strong possibility that there will be some sick days taken from some of the employees in which case the remaining e mployees will have to fill in for their co-workers in the respective step. In conclusion, implementing the purchase of the new CNC router is the best possible option and will be accomplished immediately.Executive Summary Thicketwood Ltd, a producer of custom kitchen cabinets is experiencing a bottleneck in their production line that will not allow them to produce the proper quantity to meet their increasing demand of their cabinets. The company must implement some new technology to the production line; however, they must also ensure quality as the cabinets the company produces are custom and more valuable than regular cabinets therefore the customers that buy these are expecting top quality.The company has explored a mate options including a Computer Numeric Controlled (CNC) router which we will be exploring the pros and cons to each decision end-to-end the case in order to come up with the best possible alternative that would be most beneficial to the company. Calculations for the Tables 1. 1 and 1. 2 Table 1. 1 Step 1 (24 minutes) 60 / 24 = 2. 5 x 8 = 20 per shift x 5 x 50 = 5000 20 per shift x 0. 9 = 18 per shift x 5 x 50 = 4500 Step 2 (72 minutes) 60 / 72 = 0. 83 x 8 = 6. 64 per shift x 5 x 50 = 1660 6. 64 per shift x 0. = 5. 976 per shift x 5 x 50 = 1494 Step 3 (96 minutes) 60 / 96 = 0. 625 x 8 = 5 per shift x 5 x 50 = 1250 5 per shift x 0. 9 = 4. 5 per shift x 5 x 50 = 1125 Step 4 (90 minutes) 60/90 = 0. 667 x 8 = 5. 336 per shift x 5 x 50 = 1334 5. 336 per shift x 0. 9 = 4. 8 per shift x 5 x 50 = 1200 Step 5 (20 minutes) 60/20 = 3 x 8 = 24 per shift x 5 x 50 = 6000 24 per shift x 0. 9 = 21. 6 per shift x 5 x 50 = 5400 Table 1. 2 Step 1 (24 minutes) 60 / 24 = 2. 5 x 8 = 20 per shift x 5 x 50 = 5000 20 per shift x 0. 9 = 18 per shift x 5 x 50 = 4500Step 2 (36 minutes) 60 / 36 = 1. 667 x 8 = 13. 36 per shift x 5 x 50 = 3340 13. 36 per shift x 0. 9 = 12. 024 per shift x 5 x 50 = 3006 Step 3 (48 minutes) CNC router 60 / 48 = 1. 25 x 8 = 10 per shift x 5 x 50 = 2500 10 per shift x 0. 9 = 9 per shift x 5 x 50 = 2250 Step 4 (45 minutes) 60 / 45 = 1. 33 x 8 = 10. 64 per shift x 5 x 50 = 2660 10. 64 per shift x 0. 9 = 9. 576 per shift x 5 x 50 = 2394 Step 5 (40 minutes) 60 / 40 = 1. 5 x 8 = 12 per shift x 5 x 50 = 3000 12 per shift x 0. 9 = 10. 8 per shift x 5 x 50 = 2700\r\n'