The Most Important Factors Of Transforming Gateshead Holdings - Essay Example

The Most Important Factors Of Transforming Gateshead Holdings a) What evidence is there to suggest that Gateshead Holding introduced Kaizen between 1999 and 2003? Kaizen is a technique of continuous incremental improvement which was made popular by Japanese entrepreneurs. Having a cursory look at the functioning of Gateshead Holdings, it is amply clear that there was indeed improvement in the operations of the company. Some of the points which points towards the success of the management i.e. Mr. Geoff Cartwright are; i. In 2003, the company was able to earn profit for the first time during the operations of last 8 years. ii. The staff turnover is consistently on the decline since 1999, suggesting that the staff is indeed expressing its confidence in the abilities of the new management. iii. The staff too appears motivated with an able manager on top and upgrading of the skills on account of the training. b) What is the purpose of introducing 5S into the factory? The basic philosophy behind introducing the 5S into the factory is to bring about a change into the style of functioning and making the workers aware about the competitive nature of the road ahead. The workers were sorted into teams and assigned responsibilities accordingly. Workers were also offered rewards for putting in best efforts towards fulfilling their responsibilities. This helped in motivating the staff, a critical component in today’s business context. Motives help in providing a reason for the staff to act in more efficient manner. On the other hand lack of the motivation can actually result in distorting the working environment. The five elements of 5S included Sort, Set, Shine, Standardize and Sustain. Once the workforce realises that the management is indeed quite serious about sustaining the business the long term, they too start connecting their future with efficient functioning of the company. During the years prior to 1999, no positive motivation was in sight for the workers. The lack of any positive motivation by the managers often results in an automatic provisioning of negative motivation. But the 5S adopted by management helped in changing this attitude. c) Explain possible reasons for the changes in staff turnover between 1995 and 2003. From the year 1995 to 1998 the staff turnover ratio is consistently on an increase. Workers appears to have given up and considering it a sinking ship the workers getting opportunities elsewhere thought it fit to leave at the first available opportunity. This is reflected in the incremental percentage of the staff turnover. This leads to increase in costs as once a set of trained staff leaves, a new process for recruiting is required to be taken up. The new incumbents take some time to familiarise themselves with the work and working environment. This affects the production levels and efficiency of the respective departments. In 1999, it appears in the initial months, the percentage of staff turnover had been on the rise, but after the motivation thoughts and positive signals sent in by Geoff, this trend stopped. Subsequently during the period 1999 to 2003, the impact of a visionary leadership is quite perceptible on the working style of the staff. This has not only resulted in lowering in staff turnover ratio, but it has also helped in making the functioning more cost effective. The small profit is the outcome of such efforts. d) Examine how waste would be reduced by introducing JIT and Six-Sigma. JIT Approach: The concept of JIT or Just-in-Time is another revolutionary concept from the stable of Japanese management style. In this style of functioning the inventories were recharged or ordered when the management felt the need for it. This is possible when the teams in different departments adopt a coordinated approach duly supported by the management. Each department sends across its requirements to the centralised ordering system while so that the inventories are not required to be kept for longer periods. This results in multiple benefits like; i. The company is not required to store the items for longer periods, thus reducing the cost of holdings/ inventories. ii. This being a metal component factory, if an item is kept in the store for longer time periods, the chances of its getting corroded becomes higher, which results into higher wastages. Therefore JIT helped in reducing the waste and saving the raw materials. iii. Earlier, i.e. prior to Geoff’s entry on the scene, the raw material, spoilt work and finished products used to be scattered all over the production floor. But with JIT, the functioning became much more systematic and unnecessary items were not required to be kept on the production floor. Thus bringing in a professional approach in managing the waste and finished goods. Six-Sigma Approach: The Six Sigma approach basically helps in maintaining certain quality levels in the product and services. This approach strives to reduce the number of defects by paying more attention towards perfection on the production floor. For this to happen, a certain maximum level of defects per million opportunities is fixed by the quality gurus. The causes of errors and defects are than strategically removed. Thereafter, the process is not supposed to produce more than that figure. Once the company is able to achieve such a standard, the number of defective items being produced by the company will be reduced, thus reducing the overall waste from the company and increasing the efficiency and quality levels. e) Discuss the most important factors, which helped Geoff and his team to transform Gateshead Holdings into a profitable company. Key factors which helped in transforming the company from an eternally loss making proposition to a profitable company are; i. The determination on the part of the management to move ahead in a constructive manner. ii. The confidence expressed by the management in the abilities of the workers. iii. The motivational techniques adopted by the management to encourage the staff towards doing more for the company. iv. Training provided to the staff for upgrading their technical and managerial skills. v. Constructive efforts by the management towards reassuring the staff and converting the negative attitude into positive attitude. vi. Sales revenue linked incentives scheme being put in place. Read More