Listed below, there is an analysis of the benefits (financial and non-financial benefits) and the costs (financial costs) expected to be achieved with the implementation of cell: -Benefits: – The Company will gain financial and nonfinancial benefits which will affect the revenue stream and the level of satisfaction of both customers and employees. The financial benefit of cell for the company expected is an increase in its revenues as a consequence of increasing the productivity by finding and eliminating the waste within the process. This is achieved through reorganizing and tidying the manufacturing floor, improving work flow to eliminate motion and transportation between stages of production and increasing employee efficiency by specializing and standardizing the work and cutting out wasteful work.Non-financial benefits are shown by the level of customer and employee satisfaction. On one hand, customer satisfaction increases by meeting requirements and on-time delivery; improving customer retention and attracting new customers.
And on the other hand, employee satisfaction increases by empowering them and taking into consideration their opinion.Costs: – There are two aspects that would affect the cost stream: cost reduction within the process and cost ofcell implementation. Cost reduction can be located from different attributes of the manufacturing process: inventory, defects, maintenance, labor cost, compensation … etc. Each task in the process gets specialized and standardized, the employee can stop the production line if they detect defects, thereby reducing the number of defects and work-in-process; production line productivity is improved to deliver products on time, helping the company to avoid compensation and discount, and reducing over-time working. Specialized jobs require particular machines or tools, to be handled with care and regularly maintained by the employees using it, reducing risk of break-downs and repair/replacement costs. And also, a reduction of raw materials inventory (waste) is expected.
Cost of cell implementation can be located from: training for employees for redefinition and re-assignment, production line stoppage, workshop layout reorganizing, information technology systems and management cost for implementing new system. These costs might be quite high when the companyOne of the non-financial benefits of the cell system is the enhanced level of motivation on the part of the employees. Implementing the cell manufacturing system means that there will be less supervision in the individual cells and as a result, employees will be empowered to make their decisions. This will add to the motivational factor of the employees.
Other benefits are minimization of inventory. This will minimize the level of carrying costs and therefore facilitate the implementation of the cost minimization strategy. The costs will be incurred from upgrading the machinery so that they could be made compatible with the cell manufacturingsystem. Another cost category can be in the form of separate cells requiring the same machinery and therefore the result is duplication of resources and this adds to the level of expenditures required in making the process effective.
2- At what stage, and how, should Dean sell his idea to the Joinery Manager and the workers?Dean should sell the idea to the Joiner manager and to the workers at the very start during the conceptual stage. Converting to the cell system means that this will be a project of managing change. Most projects of this kind fail because employees are unwilling to accept change. Therefore it is a critical success factor to involve the workers from the very beginning in order to make them contribute to the process. In fact the success of the conversion depends on the early involvement of the workers because they are in the best position to generate ideas on how to maximize the efficiency of the process design.
In this respect, it is a critical consideration to maximize the number of contributions from the workers because they will ultimately be responsible for making the new operational processes effective.3) How different would the cell work be to that in the main Joinery Department?The cell work would be different because the entire floor of the department would be divided into small cells that would specialize in different parts of the product manufacturing process. Previously it was not specified where different products were placed on the department floor. The location of the equipment was also not specified. However that would all change with the conversion to the cell manufacturing system.
The new system would also differ in terms of the workers being assigned to individual cells rather than being responsible for all parts of the process. It would also involve training the workers so that they can adapt to the cell operational, the Joiner Manager would need to supervise less and would be in more of a support position.4- Should Dean differentiate the working environment by providing distinctive work-wear such as T-shirts and distinctively painted machines, in order to reinforce a cultural change?Dean should implement the suggested changes because as mentioned before the project is one of managing change. This means that the management should build an organizational culture that is based on the process of innovation.
Employees are the most important assets of an organization and therefore the top management should create the best possible working conditions designed to maximize employee satisfaction. This is a criticalconsideration in the present scenario because the existing processes are going to be redesigned fundamentally. This means that Dean will have to sell the idea to the workers because the cell manufacturing system will entail completely different work processes Therefore Dean should implement the suggested changes in order to bring about culture change.5-What risks are associated with Dean’s proposal?The risks associated with Dean’s proposal have to do with the costs that will be incurred as a result of the factory floor being rearranged. There will also be work stoppages during implementation process. Therefore the challenge for Dean will be to manage project implementation in such a manner that the normal process flow is not disrupted during transition period.
The risks also have to do with the employees not being motivated enough to make the switch to a new manufacturing philosophy. Additional costs will be incurred in the form of formal training and development programs that will have to be conducted in order to help the employees adapt to the new structure. Also, the equipment might have to be upgraded from time to time. These upgrades might be costly in the event that the equipment is bolted to the floor.