Below is a list of recommendations from the study, the recommendations are backed up with statistical proofs as per their workability and possible outcome and they address the key four areas of concern which my analysis paid attention to.
How to improve the current workflow in the plant
Workflow forms the backbone of this company and for its success, the workforce has to be catered for and their issues addressed as soon as possible to avert a looming industrial action that would precede any form of dissatisfaction form the employee.
For productivity to be enhanced, employees must be motivated. The management of the firm is well motivated by the good working environment that the firm offers and they undertake their management duties with lots of enthusiasm. This is very good, however, it is of essence that other junior staff members of the firm feel the same way and work with a similar zeal, failure of which the firm with all its branches faces an eminent oblivion (Miller, 1995).
Some of the key motivators that would increase work out put include the realization that money can be a major employee motivator. Employees; both the permanently employed and those on casual basis, must be remunerated in a manner which shows gratitude and instills a sense of self-worth to the workforce. A motivated employee is more likely to impact the firm positively, the firm must thus ensure that there is equity at the workplace and appreciate excellence and hard work put in by a given employee (Guest, 1964).
Making the workforce competitive and providing some other incentives such as insurance and on job training opportunities would make these very fundamental members of the firm develop a sense of belonging. The feeling of patriotism would help safeguard the secrets of the company and make the employees work with vigor for the overall good of the company.
China, like the United States of America, is not a cheap labor market. To attract more employees, the firm must offer a very competitive remuneration. To record higher rate of production, the firm should double the number of employees. From the data provided by the Shanghai branch, the rate of production for the Rugged Wear Work Boot is as follows:
With a doubled workforce, the timings in the chat above will be halved to come up with 5 minutes instead of 10 and so on. If that is not achieved, the rate of production would remain constant but made to run for a longer duration. The first half would report for the day shift and work at that same rate for the first twelve hours then the second bunch made to report for the night shift, this way, the production doubles and possibly the profits (Miller, 1995).
As mentioned in the last bit of the paragraph above, production should resonate into profit for the firm in equal measure. This means that all the departments must be coordinated effectively to ensure that as the department of production increases output, its marketing counterpart determines markets for the very products.
This way, there wills not a rise a backlog of unsold products which could result in the firm accruing loses. It would thus be prudent to make a claim that before the department of production increases or even doubles the number of employees, the department of marketing should first determine the market for the products that will be produced.
The management is also faced with a major coordination challenge and these would all be wrapped up in the type of layouts that the company employs. Management and supervision go hand in hand, for effective management, the firm must be laid out as follows:
Office Layout: the office constitutes the home of management and one management factor that must be taken into consideration is time. The office layout must be done in such a way that time is not lost moving from one faction to another. The offices must be made to run into each other so that the Chief Executive Officer does not waste time walking for a long distance to meet his vice president or vice versa.
The facilities of the office too need to be incorporated into the office so effectively yet seamlessly enough to have the recourses of the company not depleted or wasted and at the same time the staff should not experience a shortage. A printer or a photocopier for example, could be centrally placed to serve an entire floor. The computers in the office too need to get interconnected to form an effective Local Area Network, and this would reduce time and make the sharing of equipment like printers possible.
A fully automated office ensures that no document is lost and the access of the very document is easier because there will be no bulky filing system. Backing up the files of the company in some virtual cyber data backup system such as the one made possible by the cloud computing system enhances document safety and accessibility assuring the employees of a more secure system. The use of password limits unwelcome data access thus improving security (Guest, 1964).
Some other aspects of the company such as ware housing and retailing must be strategically located so as to ensure closeness to the market and convenience to the employees. Should a warehouse be located so far from the possible labor market, employees are more likely to shy away from the firm and this would impact negatively in the returns accrued by the company.
However, should that be the case, the company must provide transport to and from the warehouse. This would cut costs for the employees thereby acting as a motivator to the middle employee.
Analysis of the initial and ongoing costs needed for the new sandal line being introduced
The company is introducing a new brand into the American market. To guarantee a good interdepartmental relation, it is evident that the department of marketing has already determined possible markets for the intended product. It is the market which dictates the pace of production in any given firm and this is evident even in the introduction of these commonly referred to Maui Sandals models.
The market anticipates ten thousand batches, an amount that the firm hopes to manufacture for its Chinese warehouses. This would prove to be a very costly venture. Just as stated in the subsequent paragraphs, China is not a third world country and one should not therefore expect to find cheap labor in this market.
This, coupled with the rates of fluctuating foreign exchange, the local taxing system and eventually the transportation costs would only mean that the firm sells the product at a higher price. High costs need to be a brand position that tags along quality. Luckily for the company, quality is one of its key product features.
The sale of the sandals at a higher cost must be mapped out so effectively to avoid a product flop. Tying the price to the quality and class that the sandal promises would ensure that the target market does not shy away from the product despite its price, this means that the marketing department should be giving the figures it is providing alongside the intended market price. This way the company shall know how to balance costs thus avert any possible underperformance of the product.
Below is a mathematical breakdown of both the initial and on going costs of manufacturing the new sandals:
The market anticipates 10, 000 batches of the new shoes and with the first five batches estimated to take1, 000 labor hours. With the company labor cost averaging at $ 1.08 this would mean that the entire labor cost is: 1000*1.08= $ 1,080 but there is an additional hold: the 80% learning curve.
A learning curve refers to the graphical representation of the knowledge that is retained in an individual after a lesson. An 80% learning curve implies that the employees are capable of retaining up to 80% of the knowledge they learn.
This would only mean that the firm invests 20% more on a continued teaching program to ensure that the employees continue producing the exact type and quality of products as was intended. It would also mean that the initial batches would take longer to produce but the subsequent ones would be produced 80% faster,
20% of 1080 is $ 216. However with an average of 250 batches a month, 10,000 batches would last 40 months costing a total of 216*40= $ 8640.
However, should the number of employees be doubled, the hours taken to produce any given batch would be halved and this would be a positive move. Producing these shoes faster would mean that they take the market by storm and the initial sales would boom, as the shoes stays for longer in the market, it creates space and room for imitations and these imitations would normally be introduced at lower prices.
This stands to sway the undecided market or would appeal to the lower class that coincidentally forms the majority of any economy. Should that be the case with this products in the states of California and the South West which the firm targets then the company would have a scoop and quit the market when it is still ripe and profitable (Miller, 1995).
Should that be the case, then the initial cost needed for the new sandal line would be $ 1296 dollars for labor only within the first five batches. Add this to the cost of raw material for the same batches and that would be $ 500,000. There are other bills that would need footing such as power and water bills, rent and miscellaneous expenses. The money lost to the foreign exchange and the stock markets all added to the cost of transporting the finished product back to the American market would extend the figure to approximately $ 825,000.
The cost of continued production would be varied but stay at about the very figure established for the first five batches. This is because there are a number of market factors that influence the current costs of production. The costs of electricity differ and so is the rate of foreign exchange.
It would be wise to try and find additional markets in China. This would help reduce the costs of transportation to America thereby increasing the market base.
Staffing plan
Staffing entails the process of recruiting labor. It is a very vital stage to the process of production. The techniques employed in recruiting the staff would lead to either a success or a failure of the firm. There are millions of people in China but Shuzworld would be interested in a very small fraction to facilitate the process of production.
The process of recruiting must be properly guided by laid down procedures to ensure that only the best brains are admitted into the family. Admitting the best brains will help increase the learning curve. Currently, it stands at 80% and it would be only sensible that all those who are yet to come have a similar capacity.
To retain the learning curve, the requirements set by the department of human resources like submission of a college diploma or bachelor’s degree in textile engineering would mean that only those who qualify are employed. However, not all employees would have to be highly schooled. There are those who would do jobs like running errands, packaging and loading. Such employees would not require any qualification, save for physical strength.
The majority of those who would work in this project are the non skilled laborers and there is no better way of recruiting them other than on short term scheduling. The future of the company in China is not predictable given the current affairs in this region and the management problems it has. Keeping such a group on the short term scheduling makes managing them a lot easier for the managers and reduces risks.
Techniques of managing them include the following:
Contract
This is the best method of managing skilled labor in a formal way. An employee is hired on contractual terms for a specified duration. After the end of the period, should the company still be interested in their services, then they can be given an opportunity to renew their contract, otherwise, these individuals are laid off. Such individuals are paid the agreed terms and given the company benefits only for the period that their contracts are valid. However, as their duration comes to a close, they lose all the company benefits and are allowed to go home or seek alternative employment.
Casual labor category
The casual labor category is the one best fit for employing the unskilled labor. This is a contract in which the workers are recruited either daily of weekly after which they are paid for their work and let off. These are people who have no attachments with the company whatsoever despite for the man-hours that they spend in the company premises.
This would save the company a lot of money because the workers would only be recruited when their services are needed. The firm would not be compelled by civil activists to cover them, save for the few hours that they spend in the company (ibid).
These people are not entitled to any other benefit apart from their daily or weekly wages.
In a nut shell, keeping the staff on the short term scheduling strategy is a profitable way of acquiring the labor cheaply. The company does not get entangled for longer periods with the employees. Some other cost effective long term benefits like pensions do not come into the picture thereby resulting into more savings for the firm.
However, very many people are wary of the job insecurities related to contracts, to attract qualified employees, the firm would be advised to make the package for the contracted individuals look as enticing as would be possible. The pay package must be something worthwhile and the contracted employees be given the provision to renew and extend their stay at the firm as they deem fit.
Allowing them to have periodic on job trainings would give them an additional asset should they chose to leave the firm and this would attract as many of them in the firm as possible. While on the contract, they should be given full medical covers and other additional benefits.
The casual labor on the other hand is normally an open field with a willing buyer and a willing seller without any other constrains. However, the terms should be friendly and human enough to make the laborers work with passion and eagerness.
Making the period of the recruitment weekly or even monthly and paying them in accordance to the amount of work they do would boost their morale at work and further spread the good reputation of the firm. This would ensure that the firm does not run short of cheap labor and could even influence the market for the company’s products in the country (Guest, 1964).
References
Guest, P. (1964). Brand loyalty revisited: a twenty year report. New York: New York Times.
Miller, D.(1995). Acknowledging consumption: A review of new studies. London: Routledge.