BMGT 364 Project 4 (Week 7) - Controlling

Scenario

The following chart displays the results of the first year's production of the, Lacks Tracks Cycles, an electric-powered

chopper-style motorcycle beingproducedby Lacks Tracks Cycles to compete with Harley-Davidson's Electra Glide. The

metrics table below was created from data supplied by Lacks Tracks Cycles five (5) plants. The purpose of the table is to

providedata for management to decide what controls and actions are needed to increase productionefficiency.

You recently joined the Lacks Tracks Cycles' headquarters staff as a quality assurance associate.

Lacks Tracks Cycles is known for producing high quality products at reasonable prices. They plan to compete against

Harley's top-end model bydevelopingsuperior productionefficiencythat will allow themto pricesignificantlybelow

Harley Davidson's Electra Glide model.

The chart below lists the desiredproductionstandards and the actual production metrics for each stage of the electric-

motorcycle's manufacturing process that needs to be completed to determine the overallproductionefficiency at each

of Lacks TracksCycles'five (5) production facilities.

A comparison of the production standard to the actual production outcomes using all the relevantmetricsallows

management to determine which of its facilities is the mostefficientproducerof theelectricmotorcycle. This knowledge

will help Lacks Tracks Cycles' management team to determine what controls need to be put into place at their various

production plantsto match the productionefficiencyof their mostefficientplant. Moreefficiencymeans higher

productionat lower per unit (cycle) costs.

Metrics

Standard

Maryland

Delaware

NewJersey

Texas

Alaska

Total Cost to Manufacture (per unit)

13,500

15,250

14,100

12,750

16,000

14,250

Manufacturing Cycle Time (time to complete single vehicle - in hours)

15

18

16

12

12

14

Yield (percentage of cars produced to specifications first time without rework)

98%

99%

97%

96.50%

97.50%

95.15%

Defective Rate/Recall Rate

2%

1%

3%

3.50%

2.50%

4.85%

Scrap Rate

2%

3%

4%

2.50%

2%

1.90%

Average Production Downtime

0.50%

1%

1.50%

0.75%

0.50%

0.75%

Training Time (hours per month)

8

6

3

5

7

4

Shipping Problems/Damage (per 10,000 units)

1

2

4

2

1

3

Safety Incident per Employee

1.50%

2.25%

0.75%

3%

2%

1.90%

Number of units manufactured per year

45,000

43,000

27,000

42,500

48,000

45,500

Utilization Rate (Capacity rate facility is utilizing during available production time)

81.82%

78.18%

49.09%

77.27%

87.27%

82.73%

Lacks Tracks must be concerned with the actual production metrics at its plants.

• Compare the metrics table standards to the actual performance outcomes at each of the five (5) plants and

explain your findings for each plant.

• Identify the four (4) most important and common deviations from the standards among the plants and explain

why this data is important to Lacks Tracks management.

• Using course materials identify and explain two (2) types of controls that could be used by Lacks Tracks

management to attempt to correct the deviations from standards at its plants.

• Explain why the implementation of a Total Quality Management (TQM) program could improveoperational

efficiency at Lacks Tracks.