4327 words 18 pages
Individual Case

Table of Contents

Executive Summary 3
Introduction 4
Issues 5
Analysis 6
Performance Evaluation 6
Inventory Management 6
Considerations for Action 6
Performance Measurement 6
Inventory Management 7
Considerations in Transitioning to a (Total) JIT System 8
Recommendations 8
Short-term 8
Long-term 12
References 13
Appendix 17
Appendix A: A: Traditional Performance Measures (Financial Objectives) 17
Appendix B: Non-Traditional Performance Measures 18
Introduction: Draper Instruments (DI) is adopting a JIT system. Currently, the company is facing inventory and quality control issues and employees are not acting in line with organizational goals.
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What measures should be used? How can DI successfully move towards implementing and utilizing a JIT system?

Performance Evaluation DI is aware that quality, meeting shipment schedules and reducing inventory is required for long-term success. However, the organization has fallen short of all expectations with the exception of meeting schedules. As explained by Atkinson (2012), "what gets measured gets done" and DI has an unrounded set of performance measurements. The current evaluation and incentive system is causing workers to behave in a dysfunctional manner as employees are aggressively focusing all efforts on factors that are measured, logically so as this maximizes their performance ratings and therefore translates into higher compensation. However, other areas have been left to suffer as employees are not motivated to excel in them. As compensation and promotions are based on meeting shipment schedules, quality has been sacrificed as workers rush to meet orders, leaving little time to worry about quality. Inconsistent product standards combined with piece rate compensation has also compounded the issue by encouraging workers to game the system to maximize their own personal well-being. In this case, workers are overproducing products with low standards, leaving products with more stringent standards in constant shortage. Consequently, the company is in a constant time crunch with no time to