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This assignment involves analyzing the factors Mr. Weir should consider when deciding whether to adopt level production and calculating the total savings from implementing this technique. It requires a comprehensive understanding of production strategies, cost management, organizational support, and the financial implications associated with level production adoption.

Paper For Above instruction

Adopting level production is a strategic decision that impacts various facets of a business’s operations, costs, and overall competitiveness. In the case of Mr. Weir, the decision to implement level production requires a careful evaluation of several critical factors, including production costs, organizational structure, social and environmental considerations, and internal procedures. This comprehensive analysis aims to elucidate these factors and highlight the potential financial benefits derived from adopting such a production technique.

Factors to Consider in Deciding Whether to Adopt Level Production

One of the primary factors Mr. Weir should examine is the structure and behavior of production costs. As indicated by Carl and Wei (2012), there has been a persistent change in production and non-production costs within contemporary and integrated commercial organizations. The significance of such costs has grown, and their relative share can considerably influence the decision-making process. High and fluctuating costs, particularly those associated with hiring and training personnel, can make flexible, or variable, production less efficient. In contrast, level production, which emphasizes steady output levels, can help stabilize costs, optimize resource utilization, and lead to economies of scale.

Another critical aspect is the nature of the decision itself, especially its alignment with social, economic, and environmental sustainability. Mr. Weir should evaluate whether adopting level production will contribute to long-term social benefits, such as improved working conditions or community well-being, and whether it aligns with environmental sustainability by reducing waste or resource consumption. Li et al. (2018) assert that sustainable decision-making enhances corporate reputation and operational resilience, especially in an increasingly eco-conscious market environment.

Furthermore, internal organizational support and procedures are vital for successful implementation. An effective transition to level production necessitates organizational mechanisms that accommodate the new process. Management should be fully committed, and internal procedures must be aligned to support steady production schedules. Strong managerial support fosters organizational cohesion, minimizes resistance, and streamlines the integration of new procedures, as emphasized by Ahn and Lee (2019).

Additional considerations include market demand stability and product lifecycle. If market demand is predictable and stable, level production can efficiently meet customer needs without the risk of overproduction or stockouts. Conversely, volatile markets might require more flexible production strategies. Thus, an accurate demand forecast is essential to determine the suitability of level production.

In summary, Mr. Weir must consider changes in production and non-production costs, organizational readiness, social and sustainability impacts, market demand stability, and internal procedural alignment before adopting level production. These factors collectively influence the feasibility, risks, and potential success of shifting to a level production system.

Total Savings from Adopting Level Production

The analysis by Carl and Wei (2012) indicates that Polar Sports, Inc. can realize total savings of approximately $1,080,000 by adopting level production techniques. These savings are attributable to several key areas:

  • Reduction in maintenance costs and overtime premiums, estimated at $480,000. This reduction stems from the steadiness of production schedules, which minimizes equipment wear and the need for overtime labor, thereby decreasing associated costs.
  • Lower training and hiring expenses, amounting to $600,000. Level production simplifies workforce planning, reduces the need for constant hiring or retraining of staff to cater to fluctuating production demands, leading to significant cost efficiencies.

It's important to note that the marginal change in purchase terms illustrates that external procurement costs remain relatively unaffected by the shift to level production. This indicates that internal cost savings are the primary driver of overall financial benefits.

Beyond direct cost reductions, adopting level production can contribute to other long-term financial and operational advantages, including improved workforce stability, better inventory management, and enhanced capacity for strategic planning. These benefits align with broader organizational goals of efficiency and sustainability.

In conclusion, the implementation of level production offers substantial financial advantages, primarily through reductions in maintenance, overtime, training, and hiring expenses. The predicted savings of $1,080,000 underscore the potential profitability of such a shift, provided the company effectively manages the transition and aligns organizational support accordingly.

References

  • Ahn, H., & Lee, S. (2019). Organizational change and production system innovation: Aligning internal support mechanisms. Journal of Manufacturing Technology Management, 30(5), 863-878.
  • Li, X., Zhang, Y., & Zhao, J. (2018). Sustainable decision-making in manufacturing: Balancing economic, social, and environmental factors. Sustainability, 10(4), 1144.
  • Carl Kester, W., & Wei Wang. (2012). Polar Sports, Inc.: Queens University, Kingston, Ontario. Retrieved from file:///C:/Users/user/Downloads/913513-PDF-ENG.pdf
  • Ahn, H., & Lee, S. (2019). Organizational change and production system innovation: Aligning internal support mechanisms. Journal of Manufacturing Technology Management, 30(5), 863-878.
  • Li, X., Zhang, Y., & Zhao, J. (2018). Sustainable decision-making in manufacturing: Balancing economic, social, and environmental factors. Sustainability, 10(4), 1144.
  • Womack, J.P., Jones, D.T., & Roos, D. (1990). The Machine That Changed the World: The Story of Lean Production. HarperBusiness.
  • Ohno, T. (1988). Toyota Production System: Beyond Large-Scale Production. Productivity Press.
  • Shingo, S. (1989). A Study of the Toyota Production System from an Industrial Engineering Viewpoint. Productivity Press.
  • Nonaka, I., & Takeuchi, H. (1995). The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press.
  • Macbeth, D., & McKee, P. (2020). Lean Manufacturing and Cost Reduction Strategies. Journal of Operations Management, 65, 520-534.

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