The choice to go on ahead with installing micro-processors is very important. It would not affect employees in any way but scrap would be reduced and the time spent by employees in re-configuring the machines would also be reduced. The micro-processors will benefit the bottom line of the company. If Norm goes ahead and installs the microprocessors without informing the team, a few problems might arise. The teams have been involved in such decisions and even more difficult decisions in the past. If the microprocessors were installed without them being informed, it might cause them to think that they have been overlooked. This might lead to the employees not appreciating the new changes and affect productivity. The advantage of such a move is that the decision will take much shorter. The teams typically meet once a week for half an hour. If they are involved, it would take up valuable company time that might be used better in production.
If Norm puts up the problem to the appropriate production team, there will be a number of advantages. First, there can be a problem with installing the microprocessors that he might not know about. The production team would know about any such problems and the limitations of the equipment used and therefore advise Norm appropriately. Second, involving the team in part of their work would make them feel valued by the company. This acts as motivation for employees to increase productivity. The major disadvantage of passing the problem to the production team is time. The time taken for the production team to reach a decision is going to be more than if Norm made the changes himself. This time would have been better spent by the employees in production. Second, the employees have expressed their desire for management to make some decisions on their behalf. This looks like a case in point because the decision does not affect job security of any employee. It would look like management is pushing even the simplest decisions to the production team.
If the production team approves the changes, it will represent a functional organization project management structure. The team which approves the project is the team which the changes are going to affect the most. This team is in charge of production and the microprocessors will be used in production. The team has the technical knowhow to implement the changes and will take responsibility for managing the project. Norm as the senior management member who proposed the changes will be in charge of project coordination.
The company employs a large number of employees. However, almost all the effort of the company is geared towards production. Their products are specialized cables and wires for submersible oil pumps. This means that at any one time, there are a limited number of unique projects going on at the company. It therefore does not make much sense to have an office dedicated entirely to project management. This is because they would have limited effect on the company. An alternative would be to keep the functional-organization project management. In this case, employees are in charge of projects in their work areas and management only offers coordination. The company also spends a lot of money on employee training on such areas and therefore a project management office would not be necessary.
The cost of one unit is $25000 and installation costs of $5000 each. Assuming a 10% margin for the company, the cost of each unit is about $33000. The microprocessors are expected to reduce production time by 1% and reduce scrap by a further 0.5%. Installing the microprocessors will increase the productivity of the company by about $500 per unit sold. This is a significant improvement in the bottom line of the company.
My recommendation to Norm would be that he goes on with the project. Instead of involving the employees in decision making, he should just inform them of the changes he intends to initiate. If any of the employees has a problem, he will be able to raise it before the changes can be made. This way, time spent in making the decision will be minimized without compromising any confidence the employees have in the existing system. The decision should still go ahead because the micro-processors will reduce production time and reduce scrap, therefore reduce production costs. This is the aim of having the production team management style.
Good Example Of Oilwell Cable Company Case Study
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