Operations Management
Assignment 2
Case studies
2.1. As Stevenson (2012) reminds us, “top management has the
ultimate responsibility for quality” (pg. 377).
Poor designs or defective products can result in loss of business.
Failure to devote adequate attention to quality can damage a profit-
oriented organization’s reputation and lead to a decreased share
DISCUSSION AND ANALYSIS
As it is elaborated in the case, the fundamental problem that challenged
the company was diminishing sales, which in turn made the profit to
slip. But, the company couldn’t manage to identify the root cause of its
problem. Different figures in the company attached different
factors to the issue. Hence, there was no consensus among people
about what the radical cause of the declining sales and profit margin is.
Similarly, different personalities in the company proposed various
measures to resolve the same problem. According to our analysis, this
coordination failure created the vicious cycle on the company in the
attempt to resolve the problem
CASE STUDY ON TOYS, INC
.
These are minimizing cost of production and lay off in the design and
product developments. The vice president of sales has been concerned
with customer complaints about defective model products provided by
the company. The assistant of the vice president proposed the following
actions to be taken: Replacing malfunctioning models with new ones,
repairing the defective products and selling it at discounted price, and
Letting the current workforce to repair the faulty products during slack
time period.
Moreover, the production assistant suggested the 100% inspection of
finished models before delivering them to the customers, as the way to
avoid the problems. Therefore, this paper is designed to identify and
analyse the real situation of the company and recommend some
measures that we would undertake, if we were in the shoe of the
consultant called in by the company’s president.
The production manager stated that a cause of sales decline was “the
economy”. According to our analysis, even though, the production
manager was prompted to undertake the belt- tightening moves like
cost reduction and layoff in product design and development
Analysis
For a company that has been around for twenty years, sales should
not be declining. Although the company has not lost any money,
sales remain stagnant. To help the company adjust to the
declining economy the production manager, Ed Murphy, had to cuts
costs and implement a layoff in both the production and product
development departments. Optimistic, Murphy believes these cuts
will be sufficient enough to increase profits. For a company that
has been a leader in the industry, problems such as product quality
and innovation should not exist. Keith McNally and Steve Bukowski
proposed two different solutions. McNally suggested the company
implement a trade-in program, which is where defective products
are replaced and then the company then fixes the product and sells
at a lower cost. Bukowski suggested that increasing inspections
would help to eliminate defective products altogether.
Problem
A veteran company like Toys, Inc. should know better than to make
a decision without properly analyzing and inspection. Every
company goes through a slow period, and companies must cut cost
to keep the company profitable. The company is having to lay off
people in departments that are essential in the creation of quality
and innovative products. The company wants to reduce cost while
still providing quality products to the customer, however with the
way the company has been operating future sales are not looking
good for the company. A decision must be made on whether to put
money into inspecting or replacement products. Each decision has
pros and cons and needs to be looked at in closer detail.
Resolution
A combination of the two ideas would be most beneficial for the
company. The trade in policy should be temporarily implemented,
followed up by a more efficient inspection process. McNally’s
suggestion of replacing and fixing defective products would...
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