Scenario
The following chart displays the results of the first year’s production of the, Lacks Tracks Cycles, an electric-powered chopper-style motorcycle being produced by Lacks Tracks Cycles to compete with Harley-Davidson's Electra Glide. The metrics table below was created from data supplied by Lacks Tracks Cycles five (5) plants. The purpose of the table is to provide data for management to decide what controls and actions are needed to increase production efficiency.
You recently joined the Lacks Tracks Cycles' headquarters staff as a quality assurance associate. Your manager has requested you to do an analysis of the first year's motorcycle production results. This information will be used by management to evaluate and improve overall production efficiency.
Lacks Tracks Cycles is known for producing high-quality products at reasonable prices. They plan to compete against Harley's top-end model by developing superior production efficiency that will allow them to price significantly below Harley Davidson's Electra Glide model.
The chart below lists the desired production standards and the actual production metrics for each stage of the electric motorcycle's manufacturing process that needs to be completed to determine the overall production efficiency at each of Lacks Tracks Cycles' five (5) production facilities.
A comparison of the production standard to the actual production outcomes using all the relevant metrics allows management to determine which of its facilities is the most efficient producer of the electric motorcycle. This knowledge will help Lacks Tracks Cycles' management team to determine what controls need to be put into place at their various production plants to match the production efficiency of their most efficient plant. More efficiency means higher production at lower per unit (cycle) costs.
Metrics |
Standard |
Maryland |
Delaware |
New Jersey |
Texas |
Alaska |
Total Cost to Manufacture (per unit) |
13,500 |
15,250 |
14,100 |
12,750 |
16,000 |
14,250 |
Manufacturing Cycle Time (time to complete a single vehicle - in hours) |
15 |
18 |
16 |
12 |
12 |
14 |
Yield (percentage of cars produced to specifications first time without rework) |
98% |
99% |
97% |
96.50% |
97.50% |
95.15% |
Defective Rate/Recall Rate |
2% |
1% |
3% |
3.50% |
2.50% |
4.85% |
Scrap Rate |
2% |
3% |
4% |
2.50% |
2% |
1.90% |
Average Production Downtime |
0.50% |
1% |
1.50% |
0.75% |
0.50% |
0.75% |
Training Time (hours per month) |
8 |
6 |
3 |
5 |
7 |
4 |
Shipping Problems/Damage (per 10,000 units) |
1 |
2 |
4 |
2 |
1 |
3 |
Safety Incident per Employee |
1.50% |
2.25% |
0.75% |
3% |
2% |
1.90% |
Number of units manufactured per year |
45,000 |
43,000 |
27,000 |
42,500 |
48,000 |
45,500 |
Utilization Rate (Capacity rate facility is utilizing during available production time) |
81.82% |
78.18% |
49.09% |
77.27% |
87.27% |
82.73% |
References should be only from Lumen’s Principle of Management, Module 15: Control at the following link below:
https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/why-it-matters-control/
Introduction
Write an Introduction paragraph. The introduction paragraph is the first paragraph of the paper and will be used to describe to the reader the intent of the paper explaining the main points covered in the paper. This intent should be understood prior to reading the remainder of the paper so the reader knows exactly what is being covered in the paper. The introduction is often written after the paper is completed. (Use as needed appropriate in-text citation and include the references in the Reference section)
The body of the paper will cover the following:
Controls
Explain what control means in a business setting. (Use heading below and in-text citation as required)
Explain why Lacks Tracks must be concerned with the actual production metrics at its plants. (Use headings below and in-text citation as required)
Control Defined
Importance of Lacks Tracks Production Metrics
Standard Specifications
Compare the metrics table standards to the actual performance outcomes at each of the five (5) plants and explain your findings for each plant. (Use the headings below and citations and references as appropriate.)
Identify the four (4) most important and common deviations from the standards among the plants and explain why this data is important to Lacks Tracks management. (Use the headings below and citations and references as appropriate.)
Using course materials identify and explain two (2) types of controls that could be used by Lacks Tracks management to attempt to correct the deviations from standards at its plants. (Use the headings below and citations and references as appropriate.) Types of controls listed in course material are Strategic Control, Operational Control, Tactical Control, Top-Down Control and Normative Control.
Four Most Significant Deviations
Two Recommended Controls
Total Quality Management
Explain why the implementation of a Total Quality Management (TQM) program could improve operational efficiency at Lacks Tracks. (Use as needed appropriate in-text citation)
Conclusion
Create a concluding paragraph. The conclusion paragraph highlights the major findings covered in the paper. (Use as needed appropriate in-text citation)
References
Solution
Introduction
This paper was written by a newly appointed quality assurance associate to analyze the first year's results of Lack Track Cycle's production of electric-powered chopper motorcycles at its manufacturing facilities as one of the major steps in improving efficiency and lowering costs for these motorcycles. The analysis is crucial to management because the results will be used to evaluate the production efficiency at each manufacturing plant and make decisions on which factors to control or implement to boost efficiency. Lack Track Cycle, if successful, will be able to outperform its primary competitors, such as Harley Davidson.
The investigation included the use of measurements at each stage of the manufacturing process to identify the most efficient and least efficient facilities. The intention was to offer management information that they could utilize to improve facility performance, boost motorcycle production, and cut expenses to increase profits.
As a result, the following are the primary points covered in this paper:
The definition of control and why it is important
Comparing the standard metrics to the actual performance
The four most significant deviations
Two recommended controls
Why the Total Quality Management program could improve operational efficiency
The conclusion of the paper
The research design and referencing of the work were carried out under the directions of referring solely from the Lumenlearning (2021a), Principle of Management, Module 15: Control.
Keywords: Control, Metrics in Manufacturing, Total Quality Management, Deviations in Manufacturing.
Controls
i) What are controls and their importance
According to Lumen Learning (2021b, para. 2), control is part of the four managerial functions that entail "the processes and procedures that regulate, guide, and protect an organization". In addition, Lumen Learning (2021c, para. 3) gives an example of a basic control process that involves 5 steps that can be used by Lacks Track Cycles:
Setting standards for performance at the facilities
Measuring the actual performance of producing motorcycles
Comparing actual with standard performance
Analyzing the deviations from production
Take action to correct or make changes that can increase efficiency and reduce cost.
Those steps are expected to be repeated logically during the production at Lack Track Cycle if the manufacturing efficiency is to improve.
This is why Lacks Tracks must be concerned with the actual production metrics at its plants:
Actual Production metrics are numerical measurements that can be used to assess production progress at the Lacks Track Cycle. They can be used to determine how well the five facilities perform in terms of efficiency, cost, and volume. As a result, if the production indicator reveals a decline or increase in production, management will investigate the reasons behind those changes. Just like in the 5th step of control (using what lumen describes as the 5 basic steps of control), that involves taking action to correct the negative changes in production.
Standard Specifications
ii) Standard Specifications: Contrasting Standard Metrics With Actual Performance
To ensure excellent manufacturing quality and production of electric-powered chopper motorcycles, the entire manufacturing process must be carried out efficiently. The actual output performance at each production facility was compared to the metrics table standards, and the results were explained.
The outcomes at production facilities (Maryland, Delaware, New Jersey, Texas, and Alaska) compared to the standards were as follow:
Total Cost to Manufacture (per unit) metric
Using the Total Cost to Manufacture (per unit) metric, the total cost of producing one motorcycle unit was greater than the standard of 13,500 for the four sites (Maryland, Delaware, Texas, and Alaska), with only New Jersey showing a lower result. This is not good since it indicates that the prices of labor, materials, machinery and other fees for each product are greater than necessary in these four facilities.
Manufacturing Cycle Time Metric
The measuring cycle time, or the amount of time taken for a motorcycle to be completed in hours, was higher than the standard of 15 hours for two facilities (Maryland and Delaware) but lower than the standard for New Jersey, Texas, and Alaska. This means the two facilities having more hours of the manufacturing cycle are not performing well because the cycles are longer, incurring more cost and minimizing overall profitability.
The Yield Metric
The percentage of motorcycles produced at the facilities to specifications the first time without rework was higher than the standard of 98% for only one facility (Maryland) but lower for the other four (Delaware, New Jersey, Texas, and Alaska). The results show slightly below the required performance for the three facilities and improvement is required because the rework cost more money and time.
Metric for defect rate/recall rate
The percentage of motorcycles that are faulty or do not meet their intended purpose was higher for four facilities (Delaware, New Jersey, Texas, and Alaska) than the standard rate of 2%, and only Maryland performed better with 1%. This shows how the other three facilities are costing the business with higher faults and defects. The business is committing more resources to rectify issues on finished motorcycles.
Scrap Rate metric
The scrap rate of the first three facilities (Maryland, Delaware, and New Jersey) was higher than the set standard of 2%. Texas had the same rate as the standard, while Alaska had the lowest scrap rate. This means that the first three facilities did not perform well because they had more scrapped or rejected material during the manufacturing process.
Average production downtime metric
The rate of unplanned time during which equipment stops running (for example, because of malfunctions) was higher than expected for four facilities (Maryland, Delaware, New Jersey, and Alaska) and only Texas has the same average production downtime as the standard of 0.50%. Since it is a requirement to keep equipment running at an optimum level, higher results for facilities show that more money is being lost there.
Metric for Training Time (an hour per month)
The time taken to train each employee in each facility was measured following the set standard of 8 hours per month. The results show that all five facilities (Maryland, Delaware, New Jersey, Texas, and Alaska) had fewer hours compared to the standard set. This means training of people in the facilities to perform better inefficiency is short than the standard required hours.
Shipping Problems/Damage Metric (per 10,000 Units)
The standard was set at 1 shipping problem/damage per 10,000 units of motorcycles produced, and out of the five facilities, four (Maryland, Delaware, New Jersey, and Alaska) had higher times than the standard. Only taxes matched the standard once during that year. This means the four facilities are not efficient enough and are incurring high costs in production.
Metric for Safety Incidents per Employee
The standard rate was set at 1.50% for each facility. Four facilities (Maryland, New Jersey, Texas, and Alaska) had a higher percentage while only one, Delaware, had a lower percentage of 0.75%. This means that the four facilities will have higher percentages are less safe for employees because more are getting injured compared to the estimated percentage and costly because of medical payments and delays.
Metric of the number of units manufactured per year
The standard figure was set at 45,000 motorcycles per year and only two facilities (Texas and Alaska) performed better than expected, with figures higher than that set as a standard. The other three (Maryland, Delaware, and New Jersey) performed below the standard. This means that those with low figures are not meeting the required number of motorcycles produced in the year.
Metric for Utilization Rate
The percentage of the rate of capacity used at the facility had a standard of 81.82%. Two facilities (Texas and Alaska) performed better than the standard while the fast facilities (Maryland, Delaware, and New Jersey) performed below standard. This shows that those performing below standard are not operating at maximum efficiency and therefore costly to operate.
iii) The Four Most Prominent Deviations
Looking at the data above, the identifiable important deviations are:
The high total cost of manufacturing a unit of a motorcycle was found by measuring in each facility the Total Cost to Manufacture per unit. The metric showed higher deviations from the standard (of 13,500) in four facilities (Maryland 15,250 units, Delaware14,100 units, Texas 16,000 units, and Alaska 14,250 units). This information is useful to management because it assists in identifying costs that need to be controlled when producing a unit.
Higher than planned defects and faults were seen when a standard of 2% was used. Four facilities had a higher percentage than the standard, but the highest was in three facilities (Delaware 3%, New Jersey 3.5%, and Alaska 4.85%). This information can be used by management for decision-making on ways of reducing faulty units that cost the business more money.
The third important deviation is the high average production downtime seen when a standard of 0.50% is used. The deviation was too high in Maryland (1%), and Delaware (1.5%). This can be used by management to improve the running time of all equipment in a facility so that there is no time lost and no cost incurred when work is taking place.
The number of units produced in that year by the facilities was another important deviation because three facilities performed below the standard of 45,000 motorcycles set for that year, (Maryland, Delaware, and New Jersey) while Delaware performed very poorly with only 27,000 units. This information can be used to make decisions on increasing the units produced per year, at the required quality and cost.
This analysis shows how Lack Track Cycles can use standards to ensure that the electric motorbikes are of high quality, right number, and cost. They were some deviations from the standards during manufacturing in some facilities caused by inefficiencies. For example, workers may have made blunders, equipment not operating properly, poor quality supplies, or incorrect methodology. As a result, such deviations result in inefficiency, poor quality, higher costs, and possible recall of the motorbikes from the customers.
In summary, the above data obtained on the deviations is important for management to determine control mechanisms for the worst-performing facilities as they determine "whether more control is necessary or if the standard should be changed" (Lumen Learning, 2021d, para.3). Therefore, it helps management to make decisions that increase efficiency so that the final unit can be priced lower than that of the competitors.
iv) Two Controls Recommended
The two types of controls that Lack Tracks Management can use to correct the deviations from standards where they happen at the 5 facilities are Operational control and Normative control.
Operating control can be used to ensure that all the facilities are operating efficiently by making sure "that activities are consistent with established plans" (Lumen Learning, 2021e, para. 8). It helps in ensuring efficient operations in terms of material used, each worker's output, methods, and equipment use. When efficiency has been controlled, the quality of operations increases, leading to efficiency quality control.
Normative control "uses values and beliefs called norms, which are established standards" that ensure products meet the accepted set standards at the five manufacturing facilities. These standards are not written policies or procedures but based on different factors that help in governing deviations, such as quality and safety (Lumen Learning, 2021f, para. 18).
Management of Total Quality
v) How a Total Quality Management Program Can Increase Operational Efficiency
Total quality management (TQM) is a technique that can be implemented in manufacturing businesses to monitor, control, and modify all activities in ways that maintain and improve desired levels of quality (Lumen Learning, 2021g, para. 11). Therefore, it can be a great technique for controlling the quality of the final electric-powered motorcycles being produced. When quality is maintained at a high level, customer satisfaction will also increase, and fewer mistakes will take place in the facilities because of the learning from performances and mistakes that come with the implementation of the technique.
When customers are satisfied with the quality that comes from efficient control of operations, the business will gain a competitive edge and make more profits because of the increased customer loyalty and reduced cost of acquiring new customers (Lumen Learning, 2021h, para. 12).
Conclusion
vi) The Paper's Conclusion
The paper was written as an analysis by a newly appointed quality assurance executive at Lack Track Cycle, a motorcycle manufacturing business with five facilities. The data was analyzed from the five facilities against the set standards and the funding was reported.
Major deviations from standards took place when evaluating the total cost of manufacturing a single unit of motorcycle, the defective rate, average production downtime, and the number of units manufactured per year. Looking at these results, the recommended control processes for this business were operational control and normative control. And finally, the total quality management technique will help management to increase and maintain a high level of quality that can internally reduce costs and increase efficiency while externally creating customer loyalty and a competitive edge.
References
Lumen Learning. (2021a). Principles of management |Why It Matters: Control. Lumen Learning Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/why-it-matters-control/
Lumen Learning. (2021b). Principles of management | Control in the Business Setting. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/control-in-the-business-setting/
Lumen Learning. (2021c). Principles of management | The Control Process. Lumen Learning. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/the-control-process/
Lumen Learning. (2021d). Principles of management | The Control Process. Lumen Learning. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/the-control-process/
Lumen Learning. (2021e). Principles of management| Levels and Types of Control. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/levels-and-types-of-control/
Lumen Learning. (2021f). Principles of management| Levels, and Types of Control. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/levels-and-types-of-control/
Lumen Learning. (2021g). Principles of management | Financial and Nonfinancial Controls. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/reading-financial-and-nonfinancial-controls/
Lumen Learning. (2021h). Principles of management | Financial and Nonfinancial Controls. Retrieved October 21, 2021, from https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/reading-financial-and-nonfinancial-controls/
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