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staff continually shifted their work from one area to another and this posed problems for
the development of a specialised workforce. There was a growing problem of quality
control largely a result of the poor state of the plant, little of which had been replaced over
the past few years. The company had not attempted to work towards ISO 9000 or the
newer ISO 14000, even though customers now required such certification in some areas.
The company had not considered the exercise "worthwhile".
Even though a full time maintenance crew of four worked as hard as possible, equipment
breakdowns were commonplace. The average age of the production equipment was over
10 years, and spare parts were becoming more and more difficult to find. You are also
aware of continual conflicts between departments concerning production scheduling.
Though there are weekly meetings of the works management committee there appeared
to be no attempt to effectively plan the schedules. As a result a considerable amount of
shop-floor time was wasted. In other companies, where you have worked, there is an
increasing reliance on computer systems to determine production timing and to achieve
effective coordination with other departments.
The production plant had grown up over the years, with a number of ill coordinated and
aging buildings separated by piles of old production equipment and rusting obsolescent
stock. The industrial relations project reveals problems with noise, temperature, dampness
and other poor working conditions in the company. Material was moved between the
various areas by a combination of manually operated trolleys and fork lift trucks, which
employed three warehouse staff. You are already aware that the decrepit state of the
buildings is causing employee dissatisfaction. You have already been involved in dealing
with a number of serious complaints from the two unions in the plant.
The company has to be prepared to make a substantial investment to create an effective
working environment. The details of the staff that are employed in the various areas are
included in Table 11 in Appendix A together with other fixed costs of the departments in
which they worked.
Distribution. Next to the production complex, but separated by a windy and frequently wet
50 yards of crumbling concrete, was the warehouse which contained the raw materials,
components and finished stock of all Burke Engineering products. Historically, the
company had maintained high stocks of most raw materials, because they had found it
difficult to get material of sufficient quality, though this policy had recently changed (see
above).
Raw material stock still however comprised around 40 per cent of the total inventory figure
in the accounts. During the past 3 years, this supply problem had eased, and such high
stocks appeared to you to be no longer necessary. The second stock problem was the
high level of components, which made up around 25 per cent of the total stock value.
Many of these components had been held for many years against orders that never
materialised, and could for the most part be termed obsolescent, though they were
included in the accounts at their purchase price. The current value was difficult to
ascertain. Over the past 6 months the level of finished stock had risen considerably and
this explained the difference between the figures in the two sets of annual accounts.
The warehouse, occupying 8000 square metres, was built over 20 years ago. The internal
layout had not been re-organised within the last 10 years. The northern end of the depot
was for bulk storage, with a range of racking systems elsewhere to hold finished stock.
Currently all stock control was carried out manually, as was most internal movement within
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