Implementing New Strategies & Policies at Lafayette Plant

Boise Cascade

MBA 513 – Rushabh vedia

Memo

To: Bill Newton

From: Rushabh

Subject: Implementing new strategies & policies at Lafayette plant

Date: Oct, 1978

Dear Newton,

As you being the general manager there have much achieved human resources policies that have been observed in the last 3 quarters. Your observations and recommendations have helped the branch achieve short term goals. Implementing activities to record employees working have contributed much to the progress made post spring 1987. However, concerns regarding having higher sales volumes, flexibility & customization in processes and management of the supervisors have been untreated and needs utmost attention before changing the Human Relations policies. For the plant to be successfully operating there should exists a balance between people and process. Many of my recommendations encompass around the lines of maintaining the balance and increase both profits and efficiency at the plant.

First area that needs improvement is the material ordering processes. Many materials are ordered as and when there is a backlog confirmation post the phase 1 stage. Different materials reach at varying times and many times the company run out of stocks. Such a situation could be addressed by initially analyzing historical data as where the stock outs happen frequently. Standard parts in small batches could be ordered in advance to reduce the factor of stock out and waiting for the process to smoothly function. Another element that is crucial is introducing an automated system in order to maintain stock records which filters data when it is used.

Second area that needs to be focused on is the bottleneck at the outside shop. The 2 halves of the houses or the pods had to go under a series of tasks outside the 18 acre inside shop. Of the many tasks, the tasks of sheetrock finishers created a bottleneck of 3 hours and required high skilled workers. Either by adding a heater machine or by adding a line of sheetrock finishers would help reduce the bottleneck.

Third area to be addressed should be the workers shifts of 4+4. According to Newton and the survey conducted by him that made him implement his inclination towards the 4+4 shift system was not adding much value to the productivity and profitability of the company. In the 4+4 system, Newton ran 2 crews on a 10 hour shift for 4 days each. However this strategy did not pave way for increasing the production substantially but instead added to the cycle time by 2.7 hours.

Cycle Time = Number of hours per week / House starts that week

Initial Cycle Time = 40 / 8 = 5 hours

4+4 Cycle Time = 70 / 9* = 7.7 hours

*The House starts for the quarter were 116 houses. Thus dividing it by 12 will give 9 houses per week

This implies that there should have been a change in the shifts of the workers. My recommendation would suggest to follow the day and evening shift with 2 crews. The 8 hour shifts will not be as long as the 10 hour shifts where 2hours in the end were usually wasted and this study was also conducted by an investigating officer sent by you. Also the autonomy to keep the wages the same for day and evening shifts, the number of hours in a week were 16 hours in a day times 5 working days; 80 hours in a week. This could help increase working hours without increasing the labor costs and more production could be achieved.

Another area to pay attention and among the crucial for the company is the relationship with the dealers. Dealers were responsible to get orders, close deals and set up the final house for the clients. Any dealer that will have to deal with delayed shipments or damaged houses, would be demotivated to work for the company and this will affect the future deals with those dealers. Most of the dealers had additional part time job other than working for the Newton and keeping the dealers satisfied would add to the increment in orders of the houses.