Southern Cross Electrical, located in the state of Victoria, Australia, recently implemented changes to improve its manufacturing operations. Following are average process statistics before and after changes to one of the company’s processes.

Previous Current Percentage Item Process Process Change COSNOROTCErSIMONOCESS) ware terene tren ear ee ete ee Bt ad $ 5,568 Srsne (75.3%)

CyclestiMetOer UiMtts-ssavenesrdtanat ngetacoeecseoenessee seeseceeeeetay sme e 16 hr. 2 hr. (87.5)

PADOntIMEIO en Uniti cee amcret ce kaccecceem: ae sam tmnnene ners 4.45 min. 3.4 min. (23.6)

Distance traveled in meters through the process............0:08 11.75 m. 5.5 (53.2)

Floorareatimimeterstusediemen cate. accent scare serene ee 36 sq.m. 12 sq.m. (66.7)

Required

a. Explain how each of these changes could improve Southern Cross Electrical’s profitability.

b. What are possible nonfinancial impacts of the process changes?

c. What decisions would Southern Cross Electrical’s managers have to make for the company to benefit financially from these process improvements?