Write answers in detail to the discussion questions given in the case
Standard Shoe Company Standard Shoe Company (SSC) is a medium sized manufacturing company that manufactures office wear shoes. They specialize in three important brands Femina (Product 101), ladies' formal shoes, Mate (Product 102), men's formal shoes and Flash (Product 103), a kid's school wear. There is a strong seasonal demand for Flash: 70 percent of all sales occur in the four-month period from April- June. The marketing and manufacturing departments have arrived at the following production schedule (table 1) for the next fiscal year and have asked for your comments. The schedule minimizes inventory costs, a major consideration for the company. As a HR manager, one of your tasks is manpower planning. This involves calculating how many people will be necessary for the firm to meet its production plans, and instituting plans and programs to ensure that they will be available. There are certain assumptions you must make, based on information gathered from the industrial engineering department and your own department records. The following pieces of information concern things that cannot be changed in the short run. 1. Standard labor rates: The total standard labor hours needed to produce each pair are: Product 101 102 103 Hours 0.33 0.33 0.40 2. Standard workday: The union contract defines a standard workday as eight hours. Any overtime is paid at 150 percent of standard wages. 3. Time Loss: Absenteeism varies by quarter. Quarter 1 2 3 4 Percent of actual hours lost 2.5 % 1% 1.5% 2% 4. Production Schedule: The total demand for products is s follows: Model Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 101 102 103 Total 5,551 5,551 16,653 27,755 3,629 3,629 13,131 20,389 4,296 4,296 8,400 16,992 Table 1 9,180 9,180 29,784 48,144 22,656 22,656 67,968 113,280 Product 101 102 103 No. of Units 22,656 22,656 67,968 But the maximum number of units that can be produced in a quarter is: Product 101 102 103 No. of Units 9200 9200 30,000 The following pieces of information concern things than can be changed in the short run. You can manipulate these items but consider the costs as well as the benefits of doing so. 1. Productivity: People do not or cannot produce at 100% efficiency. The standard hour figures given for production assume that a person is working continually and, therefore, do not reflect what is really going on. At this point, your department has measured productivity at 82%. Without the introduction of new technology or machinery, it is your best guess that productivity could be improved a maximum of 4% 2. Staffing levels: Currently 21 people are engaged in the production process. The skills and abilities of all labor are interchangeable. Additional persons are not difficult to obtain, but hiring, training and layoff costs do exist. Discussion questions: 1. If current staffing levels are maintained, are there enough employees available that allow SSC to achieve its production schedule? If not, how many additional personnel are required? What alternatives does SSC have to secure these personnel? 2. If there are too many persons during any one production quarter, what alternatives and does SSC have to deal with the surplus? Be sure to consider both the costs and benefits associated with each of these alternatives. 3. What effect will be improving productivity have on staffing levels? 4. Can you suggest any shifts in productivity from one quarter to another that would help smooth out staffing requirements? Standard Shoe Company Standard Shoe Company (SSC) is a medium sized manufacturing company that manufactures office wear shoes. They specialize in three important brands Femina (Product 101), ladies' formal shoes, Mate (Product 102), men's formal shoes and Flash (Product 103), a kid's school wear. There is a strong seasonal demand for Flash: 70 percent of all sales occur in the four-month period from April- June. The marketing and manufacturing departments have arrived at the following production schedule (table 1) for the next fiscal year and have asked for your comments. The schedule minimizes inventory costs, a major consideration for the company. As a HR manager, one of your tasks is manpower planning. This involves calculating how many people will be necessary for the firm to meet its production plans, and instituting plans and programs to ensure that they will be available. There are certain assumptions you must make, based on information gathered from the industrial engineering department and your own department records. The following pieces of information concern things that cannot be changed in the short run. 1. Standard labor rates: The total standard labor hours needed to produce each pair are: Product 101 102 103 Hours 0.33 0.33 0.40 2. Standard workday: The union contract defines a standard workday as eight hours. Any overtime is paid at 150 percent of standard wages. 3. Time Loss: Absenteeism varies by quarter. Quarter 1 2 3 4 Percent of actual hours lost 2.5 % 1% 1.5% 2% 4. Production Schedule: The total demand for products is s follows: Model Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 101 102 103 Total 5,551 5,551 16,653 27,755 3,629 3,629 13,131 20,389 4,296 4,296 8,400 16,992 Table 1 9,180 9,180 29,784 48,144 22,656 22,656 67,968 113,280 Product 101 102 103 No. of Units 22,656 22,656 67,968 But the maximum number of units that can be produced in a quarter is: Product 101 102 103 No. of Units 9200 9200 30,000 The following pieces of information concern things than can be changed in the short run. You can manipulate these items but consider the costs as well as the benefits of doing so. 1. Productivity: People do not or cannot produce at 100% efficiency. The standard hour figures given for production assume that a person is working continually and, therefore, do not reflect what is really going on. At this point, your department has measured productivity at 82%. Without the introduction of new technology or machinery, it is your best guess that productivity could be improved a maximum of 4% 2. Staffing levels: Currently 21 people are engaged in the production process. The skills and abilities of all labor are interchangeable. Additional persons are not difficult to obtain, but hiring, training and layoff costs do exist. Discussion questions: 1. If current staffing levels are maintained, are there enough employees available that allow SSC to achieve its production schedule? If not, how many additional personnel are required? What alternatives does SSC have to secure these personnel? 2. If there are too many persons during any one production quarter, what alternatives and does SSC have to deal with the surplus? Be sure to consider both the costs and benefits associated with each of these alternatives. 3. What effect will be improving productivity have on staffing levels? 4. Can you suggest any shifts in productivity from one quarter to another that would help smooth out staffing requirements
