Justification Report – Part 3

JUSTIFICATION REPORT 7

Justification Report

YASIN CAKMAK

ENG 315

02/21/2017

Introduction

Companies thrive through innovative processes. There are various strategies that can be included in companies, and they are usually specific in terms of finding the solution of different problems. This study focuses on a specific process in the business set up and how it can be utilized to ensure that the existing challenges are solved. In other words, the study is taking into consideration the various aspects of a particular project that would ensure that the current problem – that hinders growth and success – is eliminated. The divisions of the study include the problem statement, evaluation of alternatives, criteria, and methodology, evaluation of alternatives, and findings and analysis. The company in questions is one involved in the production of goods.

Problem Statement

The case study is a company that does the production of various home goods. The company has the opportunity of improving its sales, although there are various challenges that hinder it from achieving its goals. The main challenge of the company concerns how it manages the production process in the company and also other issues such as distribution and customer satisfaction. The primary focus is on these two aspects, since the company output is way below the consumer demand. Still on the same note, customer satisfaction has not been highly taken into consideration, since the customer care services are outdated and lacks innovative methodologies to ensure a complete success within the organization.

In other words, the company’s success processes are derailed by various factors both in the production process and in the distribution as well as customer satisfaction. In the first part, there is a challenge regarding the production process, as there is high cost of production, which can be associated to the production process – the amount of money being wasted in the process relative to the raw materials is not yet known. In addition, there is slow production as compared to the products distribution to the customers. With the demand being so high, the company is not able to keep a clean progress of satisfying its customers. In addition, there is poor customer care, which majorly is associated to the huge amount of work being done relative to the number of workers in that department. Therefore, these challenges need to find a solution in order to attain the highest profits while improving on the customer satisfaction.

Overview of Alternatives

When evaluating the best solution to be incorporated, there are a number of alternatives that can be utilized in a bid to find a lasting solution of reducing the wastages and as well as the high production costs. The two alternatives that can be used include the Enterprise Resource Planning and the Inventory management system.

1. Enterprise Resource Planning

The Enterprise Resource System is an integrated management system that deals with the management of the major business processes including product planning, marketing and sales, manufacturing and delivery of service and also the management of inventory and customer service delivery (Sumner, 2005). The ERP system is an overall system that can be highly influential in the management of various processes in a company. For instance, in this case, the company has challenges in the production process and waste management and also in the customer care services. This system is highly advantageous because it allows for the provision of data and networking processes that helps in finding the major issues that are required to reach the success of these business processes such as production. The company therefore has the opportunity of using this product in building a strong system not only for the production but also for the understanding of customer relationships.

b. Inventory management system

The other alternative is the incorporation of the inventory management system. An inventory management system focuses on the management of various aspects such as manufacturing processes, deliveries and stock management (Muller, 2011). The major advantage of this system is that it enables the management of stocks and checks on how the movement of products occurs from the production process up to the consumption level. The system is helpful in monitoring how the customers are consuming the goods and also whether to increase the production process or not. This ensures that there is strict tracking of products to minimize losses through time and waste management.

Criteria

There are various criteria that can be used in evaluating the viability of the two alternatives discussed above.

The first criterion is on the cost; cost can be determined through the amount of money used to purchase, implement and provide training on the usage of the system. Another important aspect to consider is the number of processes being managed relative to the cost of management. Cost is relative to the kind of processes being managed by the system and not the amount of money spent on the system. A system that is expensive in management but handles many processes can be relatively cost effective than the one that is cheaper but handles less needs and vice versa.

The second measure is on efficiency; efficiency can be measured in terms of the coordination of different types of processes and also the performance of these processes. The number of processes once again is crucial for this process. Specificity is also considered a point in efficiency, especially in finding the solutions to the specific challenges that have been described in this study.

The third aspect is on the time for implementation. Implementation time is usually crucial for the development of software and how they are put into place in the company. This criterion checks on the important element of implementation process including development, allowing interaction with the machinery, testing on whether it works, orientation of workers and provision for a back up system.

The fourth criterion is based on the practicality. Practicality can be considered as an issue of how the system finds the solution for the challenges discussed in the study. Practicality helps in understanding the performance of the system in providing detailed information about the current situation, improvement, and future considerations when handling such challenges.

The fifth criterion is on the durability of the systems. The durability of the system is determined by how effective it is to prevent being compromised by other challenges. For instance, with the two systems, the main issue is on the hacking; the durability of the security systems of the software will determine whether the system software should be used or not.

Methods

In the methodology, to confirm the better suited system to solve the problem, there is need to evaluate the characteristics of the systems and taking keen interest in the challenges being felt in the company. There will be evaluation of the challenges and how these systems can specifically find the solution to these problems. Through this cross-examination, the best system will then be selected, which will then be given to the employer for verification.

Evaluation of Alternatives

Productivity

The organization has two major alternatives at stake, the Enterprise Resource Planning, and Inventory Management System. The organization suffers from the headache of the best ways of managing the process of production, followed by the cost of production. To commence with, ensuring enhanced productivity is one of the major concerns that the organization needs to deal with as urgently as possible. There are five criteria that be utilized in an attempt to find a long-lasting solution to the problems currently facing the organization. They include the cost, efficiency, duration of implementation, practicability, and durability of the systems to be used.

The productivity within the organization directly relates to how the firm compels it workforce to offer the best to their employers. Therefore, the best alternative is alternative B: which requires that the organization offers extra floating holidays to each of its employers every single year. Thanks to the evolution of the modern technology and how pervasive the Web has become, the business environment has been subjected to rampant change in a very short period of time. The smartphones and the introduction of the social media has made millions of individuals to find it hard to have a proper balance between their personal and professional life (How to Determine the Unit Costs of Production. 2017). Therefore, due to these challenges the employers have continuously expressed concern with regard to how the employees spend their work days, and the best ways of monitoring their respective productivity. Hence, the organizations need to ensure that the distractions surfed by the employees are minimized as possible, so as to curb the mediocre productivity (Evaluating productivity: Make sure you have performance guidelines geared to your organization - Legacy Bowes Group Articles. 2017).

The first procedure that the organization should take is to create higher expectation within its ranks. The company should take as accurate measurements regarding productivity as possible like taking a simple count of the produced goods or the ones sold, or the provided services. By this, the firm will be able to reveal the rate of productivity per employee. Besides, the firm will be able to exact location where the rate of work flow gets slowed, or terminates due to breakdown of machines, and ineffective processes. It also reveals the areas that has poor training, and improper communication, to mention a few. Finally, if the organization effectively uses the measurements of productivity, then it will be able to reveal the best ways in which the business is progressing towards its set goals and objectives.

The second case is making the right choice of the methods that the organization uses. A good percentage of the employees have the capability of multitasking, whereby some may provide greater measure as compared to the others. Therefore, in the course of identification of the profitability of the employees, it is recommended that the employer takes into deep consideration the very factors affecting the organizational profits, like the cost associated with time, the rates of annual turnover, and the general job satisfaction (The Top 8 Methods for Accurately Measuring Employee Productivity. 2017). Further, the organization should be capable of putting into use variable approaches, and be capable of attempting various methods at varied times, to identify the one which produces accurate data to the firm, and be capable of revealing the one significant with respect to the goals within the organization. To ensure that this becomes a success, the organization should be able to carry out the following key methods as accurate as possible (Evaluating productivity: Make sure you have performance guidelines geared to your organization - Legacy Bowes Group Articles. 2017).

1. Management by identifying the organizational goals.

2. Measurement of the productivity as quantitatively as possible.

3. Accepting feedback in 360-degree.

4. Measurement of the productivity of sales.

5. Measurement of the productivity of the services.

6. Measurement of the productivity of time management.

7. Measuring productivity in terms of profits.

Cost

In terms of cost reduction, then offering two extra floating holidays to each of the employee annually will be ideal. If the organization does produce enhanced numbers of similar goods, then the firm stands a chance of calculating the unit costs accrued for the expenses related to productivity. The total value of the fixed costs by the organization and the variable costs tend to constitute the totals costs incurred by the organization with regard to manufacturing. These are the costs that the organization accounts for as the organization products navigates the process of manufacturing. After the production ends, the firm can make use of both the variable costs and the fixed costs to help with the calculation of the production costs per unit (Evaluating productivity: Make sure you have performance guidelines geared to your organization - Legacy Bowes Group Articles. 2017). Further, by making a comparison of the costs parallel to the production process, the firm stands a chance of determining if the costs goes beyond the actual budgeted costs.

Findings and Analysis

In ensuring that the organization stands a good chance of realizing its goals, the following table will be used in recording and analysing the findings of the research. The firm will also go to greater depths of ensuring that it fully implements the recommendations of the report.

References

Evaluating productivity: Make sure you have performance guidelines geared to your organization - Legacy Bowes Group Articles. (2017). Legacybowes.com. Retrieved 15 February 2017, from http://www.legacybowes.com/authors/entry/evaluating-productivity-make-sure-you-have-performance-guidelines-geared-to-your-organization-.html

How to Determine the Unit Costs of Production. (2017). Smallbusiness.chron.com. Retrieved 15 February 2017, from http://smallbusiness.chron.com/determine-unit-costs-production-80184.html

Muller, M. (2011). Essentials of inventory management. AMACOM Div American Mgmt Assn

Sumner, M. (2005). Enterprise resource planning. Pearson College Division

The Top 8 Methods for Accurately Measuring Employee Productivity. (2017). UniversalClass.com. Retrieved 15 February 2017, from https://www.universalclass.com/articles/business/the-top-8-methods-for-accurately-measuring-employee-productivity.htm