In order to identify the causes of the problem the Morgan Company would need to carry out three different studies, these are:
- A Works Study
- Market Research
- A analysis of the accounts and sales of the company
The main purpose of the works study would provide Morgan with the evidence of the problem within the company and to highlight the specific problems in the company. For example the poor logistics and layout of the factory which means that the cars have to be manually moved around the factory from one stage to another. The works study will highlight the areas that need to be improved by the business, and how they can be improved, for example the car is predominantly made by hand, can be improved by the incorporation of tooling which is likely to make little difference to the nature and finished quality of the product. The work study would highlight the problem of the length of production for the product which is currently three months and how this could be improved. The work study will be used to show the management and workforce the need for change in the business.
The use of market research would provide Morgan with the knowledge of the customer requirements for the company and knowledge of the customer demand for the Morgan. The most valuable information that can be gathered from the market research is the impact of the use of increased technology in the production phase and how this will affect the sales of the Morgan, for example the company will be able to find out if the customer would still by the Morgan even if it is not handmade.
The analysis of the accounts is to provide details about the financial position of the company as a large amount of expenditure would be required in order to modernise the plant and bring in modern tooling and machinery to aid production. The analysis of the sales will enable the company to find out exactly what the customer demand is for the Morgan.
The first phase is to change the production order and layout of the plant and to bring in less skilled ancillary workers to perform some of the less skilled jobs in the plant for example moving the cars around the plant during production. These changes are less extreme so are unlikely to create conflict with the workforce as the only thing being changed in bringing in more labour and adjusting the layout of the factory to prevent the car having to be moved long distances from one stage of production to the next with will save time and money for the business. This will allow the workforce to continue to manufacture the car in the same way, until the implementation of the second phase.
The benefits to the business of using ancillary workers are, firstly the ancillary workers could be used to do the jobs that the skilled workers do not need to do for example moving the cars around the factory. The use of these workers would enable the trained workers to concentrate on their specific role within the business for example making the car panels etc. The ancillary workers would not need to be trained as heavily as the rest of the workforce which would allow time and money to be saved from not having to go through the lengthy training process.
In the first phase a computerised JIT stock control system will need to be introduced into the company in order to reduce the level of work in progress around the factory. For example there are currently a large number of cars left in the factory that have not been completed which has left the business with money tied up in these resources, when this could be used within other areas of the business. The stock control system within the company is non existent as the parts are just monitored and when they become low they are re ordered, this has delayed the production process and further decreased the output of the plant. A minimum re order level would enable the business to continue production as the stock would be automatically reordered once a certain level would be reached. This will again have a minimal impact on the workforce and resources of the company as only a small number of employees would be required to operate the system. The stock control and production layout will be implemented together as there is only a minimal change in the way the plant is operated, so will only have a small impact on the management and workforce.
The second phase in the strategy will have a larger impact on the workforce and managers of the company, this change is more extreme than the first phase of the strategy and involves the incorporation of more tooling into the production phase, this is more extreme than changing the layout of the factory and will involve conflict with the workforce and managers of the business, as this will be completely changing the nature of the business which will conflict with the way that the business has traditionally manufactured the product. Rewards and targets would need to be set for the workforce in order to motivate them in the new way of producing the product this is because using Reengineering an extreme change will happen all at once, this is because the culture of the company had become so outdated and resistant to change that it will be better to start from scratch as the previous attempt to organise the production has met with little success due to this attitude. This will have a large impact on the workforce as the whole production is being changed from using hand tools to more advanced tooling. Targets and rewards maybe subsequently required to motivate the workforce into doing this.
In conclusion it would be better for the Morgan company if all of these changes were implemented into the company at once, this is because the reengineering process will involve a great deal of change all at once rather than change being introduced little by little with a great deal of continuity. In this case the culture of the company and in general is so negative and conservative and back moving the change may be needed all at once to move the company forward before it becomes obsolete. However in doing this their will be a great deal of conflict with the workforce who are very resistant to change by continuing to make the car by hand. The change would require a large amount of finance to pay for the new tooling and equipment, which would have an impact on the resources available. However the change would enable the Morgan Company to become more up to date and increase the profit margins of the business.
The re engineering process would need to be predominantly conducted with the production and planning director of the business as he seems to be the only person within the company, who sees that change is required in the company to improve the production output. The remainder of the employees and the management of the company are very conservative and resistant to any change in the company. In terms of the long term objectives of the business I believe that the strategy will enable Morgan to increase its sales revenue and profits as they should be able to produce 12 cars per week, however it would be unlikely to achieve the level of output within two years as the employees would need to be trained in operating the machinery and due to the negative nature of the company once the change has been pushed through they are likely to continue to produce the car the same way. In terms of resources of the company a large amount of finance would be required for the business to pay for the production layout and tooling.
