And production tends to be variable across the range of products which are usually made 'to-order'. Further, there may be a lapse in time between orders and delivery, due a 'bottle-neck' in the change-over of production methods (Perison, Brown, Easton, & Howard, 2002). Thus, with this traditional form of operations management, the process is labour intensive and idle time is much more likely.
Organizations are making the switch from batch production to a more linear and continuous form of operations. This paper will review the effects of the switch from batch to line processing for a fictional Company. Firstly, a definition of line processing will be given. Secondly, an evaluation of the effect the change will have on five core areas of operations will be provided (marketing, accounting, finance, human resources and information systems). Finally, a conclusion shall synthesize the main points and support the use of line processing for the Company.
A definition of line processing is a method of mass production that is high volume and extremely cost efficient because it is not labour intensive (Shim & Siegel, 1999). There is minimum changeover of equipment, processes and staff when products are being manufactured, due to the standardization and minimization of a product range (Horngren, Foster, Datar, & Srikant, 2000). Higher profit margins are expected because of higher sales. Costs are saved across the whole management system and there are better quality products and improved delivery service, making the Company more cost competitive.
Looking to Accounting systems of the Company, this department would have contributed to team discussions by using linear programming to forecast which product/s were to be deleted from the range, or which to be outsourced to smaller manufacturers if they were profitable (Pizzey, 1989). Accounting would also have been responsible for input as to the potential sales increases expected from the operations change-over. Also, the department would have advised on the positive changes to inventory systems with line processing, as the method would allow for 'just-in-time' production. Cost savings and the ability to order stock more consistently rather than rely on storage, would make the Company more cost efficient (Horngren et al., 2000). The savings would be passed onto staff in the form of simplifying bookkeeping management, and increasing wages.
Turning now to Finance, this department would need to have provided simulations and forecasts of the process selection of production methods to achieve increased sales and profits (Mayle, Bettley, & Tantoush, 2005). As sensitivity analyzers, the Finance staff would have determined the pessimistic, actual or optimistic volume expected from making the switch. Estimates of time, costs and cash inflows contribute to predicting the economic life of an organization, and help determine when the proposed changes will come into effect. The net present value and future capital investments of the switch as established by simulations would indicate whether the change be financed internally or externally (i.e., through investors or loans) (Horngren et al., 2000). This establishes the product life cycle in the global market at the moment.
The Marketing department would have involved themselves in potential advertising costs. It is unlikely that branding would have been effected with the