Production is a significant part of any company. There are many factors that affect productivity, which if managed well, will optimize the profitability of the company. This paper will focus on the productivity of Chrysler Coropration. Chrysler Corporation might have initiated itself to start three-shift production to its several existing plants that had been established for the reason of being prompted by its capital costs and wage costs. Chrysler Company did not want to build new manufacturing facilities since the existing leading products of the company were expensive ( Samuelson, 2012). The only option that the company had is to expand the existing facilities. This would enable the company to reduce the amount of money to be deployed in the manufacturing of the machinery; construction cost real estates and wage costs. Chrysler company does not need high profiled supervisors or many managers, for example, plant managers because by doing so they will save the wage drastically. The company needs to add more workers to the assembly line, but less increased personnel is needed in supporting workers in building maintenance and accounting.
Chrysler company considered adding more additional workers that were required enabling them to gain the benefits from scale economies. The company mon the time limit thinking to the added workers when it creates more plants along its major cities. Due to high demand for the warrantied products such as minivans and Jeep, they were forced to add more workers to create more efficiency in solving the increase in demand. These vehicles are fast selling products hence the company needs to increase the productivity for the request by the consumers. Chrysler needs to increase their workloads three times hence making them require more maintenance within the company. The employees get fatigued working for extra more hours; this results to low-quality vehicles ( Samuelson, 2012). The company changing its working time from six days a week two eight-hour shift to seven days a week seven-hour shift could result to the increased weekly production hours. This means that workers within the company will be working on overtime during the peak demand. The new arrangement of the company is expected to increase the mini-vans built annually in St. Louis by 50,000. Chrysler does not expect trucks and cars sales to increase because they have been on low demand and no guarantee of picking up soon.
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The company is expected to be associated with many risks through this change, but the most prominent risk is the general wear and tear of the machines in the manufacture. Manufacturing of vehicles in the assembly line requires a good routine maintenance for it to stay in a convex shape. Speeding up the production make the employees fatigued and as a result of overworking the end up dropping the product quality. The Chrysler company is making an effort of becoming the first automaker in America operating nearly nonstop to squeeze additional production within their assembly plant. The reality of this plan has been motivated by the national labor contract which granted the company permission to seven-hour three shift in a week or near-continuous St. Louis plant operation.
The local workforce and the United Automobile Workers are the only representatives that grant the program test and will not allow it tried anywhere else without their authorization. Machinery might be strained the plant when running the activities around the clock and this has worried some of the manufacturing experts ( Samuelson, 2012). Mini-vans demand is drastically increasing which earns the company more profit. For the company to maintain the profit, it has decided to manufacture more mini-vans and vehicles.
References
Samuelson, W.F., & Marks, S.G. (2012). Managerial Economics (7 th Ed.). Hoboken, NJ: John Wiley and Sons, Inc.
