Lacks Tracks' Recommended Controls

Introduction 

Organizations operate in a volatile environment, where there are factors within their control and others without their control. A company’s management should assess factors within their control and build them up for the organization's benefit. Once they do so, businesses have an opportunity to increase their profitability through a reduction of production expenses or by beating the competition in the market. The following paper evaluates the production efficiency of four plants of Lacks Tracks and recommends controls to be adopted to achieve low pricing in the market against Harley-Davidson's Electra Glide model. 

Controls in the Business Environment 

In business, control refers to directing the operations, human resources, and organizational procedures to ensure objectives, prevention of errors, and compliance (Lumen Learning, Control in the Business Setting, n.d.). It includes methods that manage, guide, and cushion a company and helps management fulfill their obligations. Some example of financial controls includes financial guidelines and output controls. Management accomplishes this by establishing desired standards, evaluating current performance, comparing the two, and implementing corrective action. Having these controls in an organization facilitates the smooth flow of operations, appropriate use of funds, increased productivity, and overall organizational goals (Lumen Learning, Control in the Business Setting, Implementing Organizational Control n.d.). 

Lacks Tracks Cycles Production Metrics 

Lacks Tracks aims to price their electric chopper cycle motorcycle lower than Harley-Davidson's Electra Glide model. To achieve this, they need to produce efficiently by manufacturing quality products, meeting its obligations to stakeholders, and remaining competitive or improving it. Lacks tracks should be concerned with each plant's production metrics because they all have a bearing on the firm's overall production costs. Moreover, investigating productivity at each plant will improve production measures and help them achieve standardization. 

Comparison of Table Metric Standards and Performance Outcomes for Each Plant 

Maryland 

The production plant has surpassed standard metrics for components directly associated with production. It takes the most time to complete a single car production, having a score of 18 compared to the industry standard of 15. The benefits of taking a long time to produce are witnessed in the defective or recall rate. Maryland plant as a recall rate of 1%, the lowest among all plants, and lower than the overall standard, which stands at 2%. Though this is advantageous to Lacks tracks, it also means that they experience higher production costs than the overall standards. The cost of manufacturing one unit at the Maryland plant is 15,250, whereas the expected standard cost is 13,500. The variance cost for each unit is 1750. The plant's scrap rate is 3%, which is higher than the standard of 2%, while the scores for average production downtime is 0.50% for the standard and 1% for Maryland. In terms of damaged products, Maryland experiences 2 out of every shipment containing 10,000 products while the industry standard is one defective product in every 10,000 products. 

Consequently, the plant sets apart six hours each month to train employees compared to the standard of 8. The plant experiences an employee safety incident of 2.25% for each employee, whereas the standard is 1.50%. Finally, the plant manufactures 43,000 units annually and utilizes 78.18% of capacity compared to standards of 45,000 and 81.82%, respectively. 

From the scores, the high number of safety incidents per employee is attributed to the reduced number of hours for training for each month. The high production costs per unit are a result of the downtime of 1%. There is an opportunity for Maryland to increase profitability by reducing the cycle time for each vehicle. 

Delaware 

The manufacturing cost per unit is 14,100 compared to the metric standard of 13,500, giving a cost variance of 600 more per unit. The cycle time at the plant is 16 hours, while the metric stand is 15. It yields 97% of products that do not require rework than the metric standard of 98%. However, the plant experiences a defective or recall rate of 3%, which is the third-highest for all plants, compared to the metric standard of 2%. Likewise, the scrap rate is 4%, the highest in all the plants compared to the standard of 2%. The plant leads in production downtime with a score of 1.50% compared to the standard of 0.50%. It further experiences damage of 4 pieces in every 10,000 products compared to the standard of 1 and trains employees three hours each month relative to metric of 8 hours. 

The safety incident per employee is at 0.75%, which is lower than the metric standard of 1.50% and the lowest in all manufacturing plants. The plant produces 27,000 units compared to the standard of 45,000, and the used capacity is 49.09% compared to the standard of 81.82%. 

The low number of safety incidents can be explained by utilizing appropriate and functional training for three hours each month. The high rates of defective or recalled products and scrap can be attributed to ineffective machinery in production downtime. Finally, the low number of units produced per year can be attributed to workforce labor's under-utilization rate. 

New Jersey 

The plant scores compare to the metric standards: manufacturing cost per unit 12,750 to 13,500, cycle time 12 to 15, yield 96.50 to 98%, and recall rate of 3.50% to 2%. The plant scarp rate is 2.50% compared to the standard of 2%, production downtime of 0.75% to standards' 0.50%, 5 hours of training each month compared to the metric standard of 8 hours. Shipping problems experienced at the plant are 2 in every 10,000 units than a standard of 1 in every 10,000. The safety incidents per employee are 3% compared to the industry standard of 1.50%. The units manufactured annually are 42,500 for the plat, and the standard is 45,000. Finally, the utilization rate is 77.72% for the New Jersey plant, whereas the standard stands at 81.82%. 

Various factors are contributing to the units of production used annually at the New Jersey plant. Firstly, the plant records the highest number of safety incidents per employee, which negatively affects productivity. This is because employees do not work efficiently and therefore manufacture products that get recalled or damaged to scrap. Ideally, a lower cycle time should increase the total units produced per year; however, this number is reduced by the recall and defective rates like in the New Jersey plant. The unit cost of production is low because of the low downtime of 0.75% at the plant. 

Texas 

The following information consists of scores of Texas plant compared to the standards. The manufacturing cost per unit 16,000 to 13,500, Cycle time 12 to 15, Yield 97.50% to 98%, defective rate 2.50% to 2%, scarp rate 2% to 2% and downtime 0.50 to 0.50. Texas training hours are 7 to 8 for standard; shipping problems are 1 in 10,000 units to standard 1 in 10,000, and safety incidences are 2% per employee than the standards'1.50%. Lastly, the scores for produced units per year and utilization rate for Texas and standards are 48,000 to 45,000 and 87.72% to 81.82%. 

The high number of units produced every year results from workforce labor's effective utilization, whose capacity is at 87.72%. The commitment of more resources generates a higher output. The high production costs are due to the amount of labor engaged in the Lacks Tracks motorcycles production. 

Alaska 

The various metric scores for the plant compare as follows to the standards. The total unit production cost is 14, 250 to 13,500, cycle time 14 to 15, yield 95.15% to 98%, defective rate 4.85% to 2%, scrap rate 1.90% to 2% and production downtime of 0.75% to 0.50%. The plant's training time is 4 hours per month, half of the standard time of 8 hours; the damage is 3 to 1 in every 10,000 units, safety incidents 1.90% to 1.50%, units manufactured 45,500 to 45,000, and utilization rate of 82.73% to 81.82%. 

The lower yield of products not requiring rework, the high scores of defectiveness or recalls, and scrap are due to the few hours for practical workforce training. The high number of units produced annually result from the effective utilization of capacity to manufacture goods. 

Important Deviations 

The total cost to manufacture per unit 

The products have varied manufacturing costs per unit are varied throughout the plants in comparison to the standard. The established standard is 13, 500 and the plant costs are 15,250, 14,100, 12,750, 16,00 and 14,250. The variations should concern Lacks Tracks management, especially because their penetration strategy provides quality products at reduced prices. The relationship between production costs and prices is inverse. When the production costs are high, the quantity the company can supply at a given price reduces. Without standardization, Lacks Tracks will not compete effectively in the market. 

Cycle Time 

The cycle times influence how efficiently the company can meet demand by increasing motorcycle products' output volume. Pairing the cycle times with low production costs per unit presents an opportunity to increase profits. The strategies will give Lacks Tracks a competitive advantage over Harley because it will achieve its dream of low pricing that management aims to do. 

Production Downtime 

The production downtime refers to the time when machinery is idle or operating at an inefficient capacity. The standard for this is 0.50, and only out of the five companies have achieved this. The rest is on the high end of the spectrum. Lacks Tracks management should be very concerned with this because of various reasons. Firstly, a high downtime value increases the production cost per unit, which drives the company to increase its prices and be pushed out of the market (Lumen Learning, Managing Productivity, Improving Productivity, n.d.). On the other hand, operating equipment prone to breakdown increases the value of defective, recalled, and scrap products. Streamlining downtime, according to the standard, will save the company overhead costs. 

Utilization Rate 

The utilization rate refers to the organization's labor capacity during production time to manufacture products. The values fluctuate throughout the companies to the standard value of 81.82%. Other values are, 78.18%, 49.09%, 77.27% 87.27% and 82.73%. The values should concern management because a low utilization rate produces a low number of products annually and may lead the company to lose revenue due to stockouts. 

Control types 

Operational Control 

These controls are appropriate for Lacks Tracks production plants because they are concerned with business processes rather than additional strategies (Lumen Learning, Levels and Types of Control, Operational Control n.d.). The various metric will create their objectives, which will guide the operational strategy. For example, deviation in safety incidents per employee would call for standardized training manuals on operating machinery. 

Tactical Control 

Tactical control is specific compared to operational controls (Lumen Learning, Levels and Types of Control, Tactical Control n.d.). After the setting up of operational controls, tactics will be drawn from them. For example, the tactical control for standardization of training manuals would be the periodic review of manuals and adjusting them to be responsive to operational needs. 

Total Quality Management Program 

Total quality management refers to a concept of continuous improvement of quality of outputs and methods (Lumen Learning, Quality Management, TQM, n.d.). Such a system would ensure that the desired outcome from the use of specific procedures would be realized. Additionally, the company would be looking for opportunities to improve processes and increase productivity, increasing output and revenue generated from sales. 

Conclusion 

Lack Tracks production plants metrics indicate the essence of having streamlined operations and controls to achieve this. It brings attention to problem areas and directs management to undertake corrective actions (Lumen Learning, Controlling, Taking Corrective Action n.d.). The use of controls like operational and tactical keeps a keen eye on company activities and increases efficiency and productivity. 

References 

Lumen Learning (n.d.). Principles of Management . https://courses.lumenlearning.com/suny-principlesmanagement/chapter/levels-and-types-of-control/ . 

Lumen Learning. (n.d.). Boundless Business . https://courses.lumenlearning.com/boundless-business/chapter/quality-management/. 

Lumen Learning. (n.d.). Introduction to Business . https://courses.lumenlearning.com/wmopen-introductiontobusiness/chapter/reading-controlling/. 

Lumen Learning. (n.d.). Managing Productivity . https://courses.lumenlearning.com/boundless-management/chapter/managing-productivity/. 

Lumen Learning. (n.d.). Principles of Management . https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/control-in-the-business-setting/. 

Lumen Learning. (n.d.). Principles of Management . https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/why-it-matters-control/.