manufacturing strategy case study

1. KYAMBOGO UNIVERSITY
MANUFACTURING STRATEGY COURSEWORK
PRESENTED BY:
1
NAME REGISTRATION NUMBER SIGNATURE
NAMATENDE GRACE KEVIN 20/U/EMD/12654/GV
OPIO JACOB 20/U/EMD/12727/GV
NAYEBARE COHEN 20/U/EMD/12678/GV
MUGENYI MENTON MELVIS 20/U/EME/7950/PE
EZARUKU ROGERS 20/U/EMD/7942/PD
ISRAEL MOSES BUSHARIRA 20/U/EMD/12513/GV

2. QUESTION ONE
a) Evaluate Tama Electronics’ current manufacturing facilities arrangements.
i. Prior to the review, TE utilized a functional layout: similar machines or processes were
grouped together. Its disadvantages included inventory build-up, increased complexity
and limited employee engagement.
ii. Tama Electronics adopted a hybrid manufacturing facilities arrangement that consists of
cellular and process layouts.
iii. Tama Electronics manufactures printed circuit boards for three different types of
products namely: TV, Radio and Video Products, Domestic Appliance Products and
Vending Machine Products.
iv. Each of these products are handled by a cellular unit having its own equipment(product
line) and labour that carries out day-to-day scheduling, change-overs, maintenance and
quality control.
v. The more expensive processes such as flow solder, component sequencing and auto-
insertion are shared by the different units in a process layout thus Tama Electronics
arranged its manufacturing facilities in a hybrid layout consisting of cellular (product)
and process layouts.
2

3. QUESTION ONE
b) What are the advantages brought about by the present manufacturing facilities arrangements?
i. There is component standardization and quality control. Each product line can be accurately
controlled and monitored to ensure high quality products.
ii. It ensures effective market responsiveness and productivity because each of the machines is assigned
to a specific product.
iii. It reduces material handling and inventory. The various products are always at different stages of
production which reduces the amount of storage space required for inventory. Material handling can
also be automated to improve efficiency.
iv. Effective space utilization. The different machines for a product are arranged in one place which
reduces movements and minimizes the space required.
v. TE has experienced cost reduction. The most expensive processes such as flow solder are shared by
the different units which saves the company money.
vi. Improved employee involvement and enthusiasm. The employees under the different units have
owned their products and are very interested in meeting their unit objectives which produces high
quality products.
vii. Reduced production time and quick delivery. The different units work effectively to meet their
deadlines and ensure that the products reach the market on time.
3

4. QUESTION ONE
c) Talk about delay as a result of conflicting order winners that exist within the business and the
role of strategy versus unit autonomy as the basis for corporate decisions.
i. Order winners are the qualities of a product that will win the customer’s purchase.
ii. The different units under Tama Electronics prioritize certain order winners that best suit
their markets. The TV, Radio and Video unit focuses on delivery reliability for their high
volume products. The Domestic Appliances unit strives for low prices and flexibility
while the Vending machines unit prioritizes high quality and in-time delivery.
iii. The different units focus on their respective order winners in order to meet their
market’s needs which leads to conflicts. The overall company lacks a uniform focus
which reduces efficiency and can lead to delays.
iv. As the TV unit works towards producing high volume products, it takes up all the shared
equipment which causes delays in other sectors as they have to wait for one group to
finish before they can complete their products.
v. There is specialization in the different units which limits employees to their specific
products. In case of shortage in one unit, employees from another unit cannot step in
and provide labour which leads to delays and the need to outsource.
4

5. QUESTION ONE
c) Talk about delay as a result of conflicting order winners that exist within the business and the
role of strategy versus unit autonomy as the basis for corporate decisions.
v. Frequent product delays can lead to dissatisfaction among customers and force them to seek
alternative producers which reduces Tama Electronics’ market share.
vi. Tama Electronics is run as an autonomous company. The different units are self- governed,
having their own objectives and goals. These at times differ from the overall company strategy.
The different units run on their own policies which deters cooperation and joint development of
the company.
vii. Autonomy leads to irrational and slow decision making as each unit focuses on their needs while
at times depriving other units of the necessary resources. Strategic planning ensures that
corporate decisions are made while focusing on the overall company goals.
5

6. QUESTION ONE
d) What changes, if any, would you recommend?
i. TE should carryout centralized scheduling. Orders should be prioritized orders based on
customer needs and strategic objectives (considering order winners). This ensures all order
winners are addressed effectively, minimizing delays caused by unit-specific prioritization.
ii. Tama Electronics should clearly state the overall company objectives and ensure that all the
units and their employees work towards achieving them.
iii. The different employees should be skilled in more than one unit to enable easy transfer of
labour and creation of task forces for the new products.
iv. Tama Electronics should automate most of the manual processes such as assembly to improve
their quality while also reducing the production time.
v. Performance measurement for the different units should be carried out. This will identify the
inefficiencies of the processes or employees so that they can be improved upon.
vi. Technology Adoption: Explore the potential of implementing advanced planning and scheduling
(APS) software to optimize production scheduling, manage resource allocation, and anticipate
potential bottlenecks.
6

7. QUESTION TWO
a) Examine the payment system suggestions referred to by Gary Wilson.
The case study mentions that Tama Electronics' employees propose a payment system that rewards each
unit based on its individual performance. Here's a breakdown of this proposal and its potential
implications:
Employee Proposal:
The employees suggest a performance-based payment system. Units would be rewarded financially based
on metrics specific to their market segment and production goals.
Potential Advantages:
i. Motivation: A performance-based system can incentivize employees to focus on achieving unit goals,
potentially leading to increased productivity and efficiency.
ii. Alignment with Unit Focus: The system aligns with the current structure of dedicated units with
autonomy.
iii. Sense of Ownership: Rewarding unit performance can foster a sense of ownership and accountability
among employees within each unit.
7

8. QUESTION TWO
a) Examine the payment system suggestions referred to by Gary Wilson.
Potential Disadvantages:
i. Conflicting Priorities: Focusing solely on unit performance might create situations where unit
goals conflict with the company's overall strategy (order winner conflict as discussed in Question
1c).
ii. Discourages Collaboration: Units might prioritize their own performance over collaborating with
other units, potentially hindering overall efficiency.
iii. Limited Scope: A system focused solely on unit performance might not incentivize behaviors that
contribute to long-term company goals (e.g., innovation, employee development).
In conclusion, Tama Electronics' proposed payment system offers potential benefits in terms of
employee motivation and alignment with the unit-focused structure. However, careful consideration is
needed to address potential downsides like conflicting priorities and a limited scope that might not
incentivize behaviors crucial for the company's long-term success.
8

9. QUESTION TWO
b) Using this as an example of infrastructure development, comment upon these proposals.
The case study suggests that payment systems are a crucial aspect of a company's infrastructure. Let's explore
this concept and its significance for Tama Electronics.
Infrastructure Development:
A company's infrastructure encompasses all the systems and processes that support its core functions. This
includes things like:
i. Physical Infrastructure: Buildings, equipment, technology.
ii. Organizational Infrastructure: Management structure, communication channels, decision-making processes.
iii. Human Capital Infrastructure: Training programs, employee development initiatives.
Payment Systems as Infrastructure:
Payment systems are a critical part of a company's human capital infrastructure. They directly impact employee
behavior and motivation, influencing how effectively they contribute to achieving company goals.
9

10. QUESTION TWO
b) Using this as an example of infrastructure development, comment upon these proposals.
In the context of Tama Electronics: The proposed performance-based payment system is a form
of infrastructure development.
Implementing this system would influence employee behavior by incentivizing them to focus on
unit-specific performance metrics.
The Importance of Strategic Alignment:
While payment systems can be effective motivators, it's crucial for them to be strategically
aligned. This means they should:
i. Support Company Objectives: The payment system should incentivize behaviors contributing
to the company's overall goals, not just unit-specific metrics.
ii. Encourage Desired Processes: The system should reward behaviors that align with desired
processes, such as collaboration and innovation, alongside unit performance.
10

11. QUESTION TWO
b) Using this as an example of infrastructure development, comment upon these proposals.
For Tama Electronics:
Implementing the proposed system without considering its impact on broader company goals
could lead to misalignment.
The system might incentivize unit-specific performance at the expense of collaboration or
innovation, potentially hindering overall efficiency and long-term success.
In conclusion, Tama Electronics needs to evaluate their proposed payment system within the
context of infrastructure development.
The system should be strategically aligned to ensure it incentivizes behaviors that contribute to
both unit performance and the company's overall success.
11

12. QUESTION TWO
c) In your opinion is it appropriate for staff to initiate payment developments?
No, I don’t find it appropriate for staff to initiate payment developments.
The case study raises an interesting point: Tama Electronics' staff proposes a payment system, but the final decision on its implementation rests
with the company's leadership. Here's a deeper look at this dynamic and its implications.
Staff Input vs. Strategic Decisions: Employee Suggestions: Employees can offer valuable insights based on their experience and understanding of
daily operations.
Their proposed performance-based payment system reflects their desire for a system that rewards unit-level achievements.
Strategic Decision-Making: However, the final decision on infrastructure changes, like payment systems, should be made by the company's
leadership. They have a broader perspective of the company's goals, market conditions, and long-term strategy.
Reasons for Strategic Decision-Making:
i. Alignment with Overall Strategy: As discussed earlier, payment systems are a form of infrastructure development. They should be strategically
aligned to ensure they incentivize behaviors that contribute to the company's overall goals, not just unit-specific performance. Executives
have a better understanding of the big picture and can evaluate the system's impact on long-term objectives.
ii. Potential for Unforeseen Consequences: Employee-proposed systems might have unintended consequences that could hinder overall
efficiency. Leadership can assess these potential downsides and explore alternative solutions.
iii. Consistency with Broader Infrastructure: Payment systems are just one element of a company's infrastructure. Leadership can ensure the new
system integrates seamlessly with existing infrastructure elements like performance measurement systems and communication channels.
12

13. QUESTION TWO
c) In your opinion is it appropriate for staff to initiate payment developments?
Finding the Right Balance:
While leadership retains the final decision, here's how to leverage employee input effectively:
i. Open Communication: Leadership should encourage open communication and actively seek employee
feedback on proposed changes.
ii. Data-Driven Decisions: Evaluation of the proposed system should involve data analysis, considering its
potential impact on productivity, collaboration, and alignment with strategic goals.
iii. Alternatives & Collaboration: Leadership can work with employees to explore alternative payment structures
or refine the proposed system to minimize potential downsides.
In conclusion, while employee input is valuable, the final decision on payment system implementation rests with
leadership, who can ensure strategic alignment and minimize unintended consequences. Collaboration between
leadership and employees is crucial to develop a system that motivates and incentivizes behaviors driving both
unit performance and long-term company success.
13

14. QUESTION TWO
d) What should be the basis of Infrastructure developments?
The case study prompts us to consider the underlying principles that should guide infrastructure
development, particularly in the context of Tama Electronics' proposed payment system. Here's a
breakdown of these key principles:
1. Strategic Alignment:
The primary driver for infrastructure development, including payment systems, should be strategic
alignment. This means the system should incentivize behaviors that contribute to achieving the
company's overall goals and objectives.
In Tama Electronics' case, the proposed performance-based system needs to be evaluated for its
impact on long-term objectives beyond just unit-specific performance metrics. Here are some
questions to consider:
i. Does the system encourage collaboration between units to address customer needs effectively
(considering order winners as discussed in Question 1c)?
ii. Does it incentivize innovation and continuous improvement that benefit the company in the long
run, not just meeting short-term unit goals?
14

15. QUESTION TWO
d) What should be the basis of Infrastructure developments?
2. Process Improvement:
Infrastructure development should also aim to streamline operations and enhance overall efficiency.
The payment system should encourage behaviors that improve processes and contribute to a smooth
production flow.
For Tama Electronics, the system shouldn't incentivize behaviors that hinder efficient production, such
as:
i. Prioritizing high-volume production within a unit at the expense of fulfilling urgent orders from
other units.
ii. Discouraging knowledge sharing and collaboration between units focused on different market
segments.
3. Employee Engagement:
Effective infrastructure development should also aim to motivate and engage employees. The
payment system should reward desired behaviors and foster a sense of ownership and accountability.
15

16. QUESTION TWO
d) What should be the basis of Infrastructure developments?
Tama Electronics can consider these aspects:
i. Does the system incentivize employees to go beyond just meeting basic unit goals and contribute to the company's success as a
whole?
ii. Does it encourage continuous learning and skill development to adapt to changing market demands?
Applying These Principles to Tama Electronics:
Before implementing the proposed payment system, Tama Electronics should evaluate it based on these three principles.
Does the system incentivize behaviors that:
i. Align with long-term company goals (strategic alignment)?
ii. Promote efficient production across units (process improvement)?
iii. Motivate and engage employees for continuous improvement (employee engagement)?
By carefully considering these principles, Tama Electronics can ensure their payment system serves as a well-designed piece of
infrastructure that drives both unit performance and long-term company success.
16

17. QUESTION TWO
e) What is the issue at stake here concerning infrastructure development and processes?
The case study challenges us to move beyond the proposed performance-based system and
explore alternative payment structures for Tama
Electronics. Here's how we can design a system that addresses potential shortcomings and better
aligns with the company's strategic goals:
Moving Beyond the Proposed System:
While the employee-proposed system incentivizes unit performance, it might lead to issues like:
i. Conflicting Priorities: Unit focus could overshadow collaboration and addressing order
winner conflicts (discussed in Question 1c).
ii. Limited Scope: The system might not encourage behaviors crucial for long-term success like
innovation or cross-unit collaboration.
Exploring Effective Alternatives: Here are some alternative payment system designs to consider:
17

18. QUESTION TWO
e) What is the issue at stake here concerning infrastructure development and processes?
1. Balanced Scorecard Approach:
This framework goes beyond unit-specific metrics and considers factors contributing to overall company success. Imagine a system
incorporating:
i. Unit Performance: Efficiency, quality, cost-reduction within the unit.
ii. Strategic Objectives: Customer satisfaction, innovation, collaboration with other units.
iii. Employee Development: Skill development, participation in improvement initiatives.
By rewarding performance across these areas, the system incentivizes behaviors aligned with both unit goals and company-wide
objectives.
2. Profit-Sharing with Unit-Level Adjustments:
This system fosters a focus on overall company performance. A portion of the company's profits gets shared with employees, while unit-
level adjustments can be made based on factors like:
i. Efficiency within the unit
ii. Meeting specific customer needs within their market segment
This structure encourages both unit-level optimization and contributions to the company's overall profitability.
18

19. QUESTION TWO
e) What is the issue at stake here concerning infrastructure development and processes?
3. Hybrid System with Recognition Programs:
This approach combines a base salary with performance bonuses based on a mix of unit-specific and company-
wide metrics. It maintains unit focus while encouraging behaviors aligned with broader goals. Additionally,
consider:
Recognition Programs: Acknowledge and reward employees who contribute to cross-unit collaboration,
innovation, or exceeding customer expectations.
This hybrid approach offers flexibility and motivates desired behaviors beyond just unit performance.
Considerations for Implementation:
i. Data Availability: Ensure reliable data exists to measure performance across all chosen metrics.
ii. Transparency: Clearly communicate the system's structure, performance measurement criteria, and reward
distribution.
iii. Regular Reviews: Conduct periodic reviews to assess the system's effectiveness and make adjustments as
needed.
19

20. QUESTION TWO
e) What is the issue at stake here concerning infrastructure development and processes?
Benefits of Exploring Alternatives:
i. Improved Strategic Alignment: A well-designed system will incentivize behaviors aligned with the company's
overall strategy and long-term goals.
ii. Mitigating Order Winner Conflict: Alternatives can encourage collaboration and address order winner
conflicts by highlighting the importance of fulfilling diverse customer needs.
iii. Enhanced Employee Engagement: A system that rewards contributions beyond unit performance can foster a
sense of ownership and engagement, leading to a more cohesive and successful organization.
By considering these alternatives and the principles outlined in Question 2d, Tama Electronics can craft a
payment system that effectively motivates desired behaviors, fosters a collaborative environment, and drives
success across all levels of the company.
This approach goes beyond simply rewarding unit performance but also creates a system that's strategically
aligned, motivates long-term success factors, and fosters a culture of collaboration within Tama Electronics.
20