Ayuban, Benlot, Catadman, Lasdoce, Manuel, Mejaran, Sonbise, Teano, Tolo, Villasan

What is Benchworks, Inc.?

A metal fabrication company that was established on 1992 by Mr Ricky Gomez Offers to manufacture commercial and residential furnishings

Who is Mr Ricky Gomez?

The general manager and the one who markets the company s services to current and potential client The only designer in the company The one who supervises the production processes

Obvious Problems
Meeting the deadline for Multisales contract, which was supposed to a 4-6 months job yet they were only given 2 months to complete it. Because of the arrival of the Multisales contract, the company now has to finish three projects that fall due towards the end of June and sometime in July. How much additional capacity needed in order to meet the deadlines?

How to maintain the quality of products and services without Mr Gomez being there?

INVESTIGAT ION
Manpower Located in a residential area Having problems meeting deadlines? The company is need of continuous projects The company is concerned with establishing a name & track record

Accepted too much projects

Insufficient Capacity

Limited use of machinery and workforce

MULTISALES CORP.

TIME
APRIL MAY JUNE JULY AUGUST

PROJECT DESCRIPTION QUANTITY Required Time MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Dining chair 640 pieces 10 pcs./week Dining table- 4 persons 103 units 5 units/week Dining table- 8 persons 5 units 5 units/week Dining table- 2 persons 34 units 5 units/week 1 month = 4 weeks Based on Time Estimates and Capacity Given Note: All projects are started at the same time. For the dining chair, it would take 64 weeks or 16 months. For the dining table - 4 persons, it would take less than 21 weeks or 5 1/4 months. For the dining table - 8 persons, it would take 1 week. For the dining table - 2 persons, it would take 7 weeks or 1 3/4 months.

PAGINA BOUTIQUE PROJECT DESCRIPTION QUANTITY Required Time Carpentry/ Masonry 1 lot 2 weeks Painting 1 lot 1 week Faade neon sign with scro 1 lot 1 week Storage room with plastic 1 lot 2 weeks Fitting room 2 units 1 week Right side wall type modu 5 units 2 weeks Left side wall type module3 units 2 weeks Shoe island module 4 units 1 week/ unit Cashier counter 1 unit 1 week Bargain Sale rack 1 unit 1 week Pagina Boutique would take 17 weeks or 4 1/4 months. MAY JUNE JULY

TIME
AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST

SOUND CITY PROJECT DESCRIPTION QUANTITY Required Time Component Rack 2 units 6 days/unit Listening Unit 2 units 6 days/unit 1 week = 6 working days Sound City would only take 4 weeks or 1 month. MAY JUNE JULY

TIME
AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST

Assumptions
Case Fact: Implications: Case Fact: Implications: Case Fact: The Multisales contract will be due on July 31, 1993. The company will have longer time to finish the project.
Benchworks, Inc. is capable of financing through equity capital
The company is able to buy machineries if needs arise and is capable of paying additional expenses made by hiring additional workforce.

The additional workforces that will be hired by the company are already skilled personnel
The company will not have to waste longer time to train its new recruits since several instructions are enough for them.

Implications: Case Fact: Implications:

The company is not in the proper industrial site

The company cannot attain its maximum product output in a day thus it takes longer for them to finish a contract.

Alternative Course of Action

To raise the issue regarding the slow production process. Benchworks Inc. can purchase new machines to aid in speeding up the production.
PROS Speed up production process Can produce numerous outputs on time Reduces errors or wastage of materials Machines can be used for a long period of time CONS Costly in terms of purchasing price Additional expenses would also be necessary e.g. installation cost, repair There is a need for maintenance

Benchworks Inc. can lease machineries needed to maximize their production process.
PROS Minimal Cash Outlay Overcoming Budgetary Limitations Avoidance of Obsolescence Flexibility in Terms and Equipment Conservation of the Business' Working Capital CONS Equipment becomes more costly if it will be decided to lease it instead of making outright purchase This lack of ownership is also responsible for the increase in the overall cost of the business equipment, because you also pay to the lesser for carrying the risk of the ownership with him High early cancellation charges Payment not only for the cost of the business equipment, but also for the charges of the leasing company

To communicate the problem regarding the issue of capacity constraints due to its newest and biggest client the Multisales Corp .
Benchworks may choose to hire additional contractual employees.
PROS Lesser cost in terms of compensation They can be terminated easily compared to regular employees The company can be assured of the work quality done No admitted cost in terms of benefits You will not be saddled with ineffective and inefficient employees No retirement pay CONS They are in need of greater supervision Wastage of time due to the hiring process You won t be able to keep the confidentiality of the company because of the different people handling functions

Benchworks may also select to subcontract as an alternative to the need of its manpower.
PROS Can use a subcontractor for one-off jobs and jobs requiring specialist expertise or fast turnaround. They can catch up their deadline. Some subcontractors can start the work or project at short notice, even when large numbers of workers are required CONS Subcontractors cost your business more than the equivalent daily rate for employing someone Have no direct control over the quality of subcontractors' work Subcontractors may not appreciate your business culture and may lack the motivation and commitment of permanent staff

Benchworks may also opt to consider overtime as an option.

PROS There will be a higher possibility of Benchworks to be able to make the necessary products before the deadline. The company can save money if they will impose this alternative, than hiring new employees CONS Some of the employees may not agree with this alternative because of some personal reasons It s costly because employees would need an overtime pay

To address the issue regarding the location of Benchworks working site that can cause problems to its neighbouring residential homes.
Benchworks can choose to rent/lease a good location for its site for them to be able to use all of their machines whenever necessary. PROS There is less up-front cash required with a lease. Cash is preserved for other needs of the business-sales and marketing efforts, hiring employees, buying equipment Terms of a commercial lease are open to negotiation You can decide what is important to you and work with the landlord to accommodate the needs of your business Maintenance can be shifted to the landlord CONS Commitment to contract for entire validity period Higher fixed costs per month More expensive than purchase in the long run

Benchworks may also opt to buy their own site that is far from residential houses.
PROS Buying a property gives you the freedom to use it as you wish Have more flexibility over the management or repair of the building Profit from the building when you sell it, if it gains in value Let the property in the future and receive another income stream Move when you wish - you won't be tied to a fixed-term contract CONS Tie up a lot of your capital Leave the company with negative equity The company is responsible for the safety of the building Commit to on-going cost

To address the issue regarding Benchworks employees towards unwanted working habits.
Mr Gomez must improve certain disciplinary actions PROS Employees would be motivated to work in an appropriate manner They can meet the deadline because they would work hard on it CONS It would require a lot of patience and sacrifice It may develop misunderstanding among the employees

Conduct a special training and seminar

PROS It can develop the working habits of the employees It can add more knowledge on how to make their job easier It helps their mutual relationships with other employees Cooperation may happen between them CONS It s quite costly It requires additional time to conduct those trainings It might be a hassle to other employees Some of the employees may not be interested and pursue to what they think is right

Installation of Security Camera in the production premises.

PROS To monitor the production area for theft and other forms of criminal activity The savings the company realize from theft reduction alone can more than pay for system hardware and monitoring costs. Interior cameras can be positioned to keep an eye on employee performance or root out suspected employee fraud The installation of a security camera system can even reduce insurance premiums. CONS Set-up and maintenance costs can be too prohibitive Invasion of privacy rights may pose legal liability

To address the issue regarding the segregation of duties on top management level.
opt to hire additional designers and marketing specialist.
PROS There is someone who can specialize in designing furniture Have knowledge of design trends There is someone who can concentrate on designing Prompt submission of designs The marketing specialist will be charged in the overall marketing program Will help the company grow market share The ability to gather data and utilize information efficiently to create marketing campaigns CONS Expensive salary Another additional cost for the company There is a risk of hiring an unworkmanlike Risk of hiring someone with adequate marketing expertise Hire additional marketing specialist and production supervisor.
PROS The marketing specialist will be charged in the overall marketing program Will help the company grow market share The ability to gather data and utilize information efficiently to create marketing campaigns Determines the allocation of labour resources, track production and scheduling and cost Make on the fly adjustments to the process Ensures that goods and services are produced efficiently Ensures the correct amount produced at the right cost at the right level of quality CONS The job requires a lot of coordination Demands juggling a lot of different jobs at the same time Requires a credible and flexible person which is hard to find Someone who could work well with pressure

Hire additional designers and production supervisor.

PROS There is someone who can specialize in designing furniture Have knowledge of design trends There is someone who can concentrate on designing Prompt submission of designs Determines the allocation of labour resources, track production and scheduling and cost Make on the fly adjustments to the process Ensures that goods and services are produced efficiently Ensures the correct amount produced at the right cost at the right level of quality CONS Expensive salary Another additional cost for the company There is a risk of hiring an unworkmanlike The job requires a lot of coordination Demands juggling a lot of different jobs at the same time Requires a credible and flexible person which is hard to find Someone who could work well with pressure

Recommendation
Purchase additional machineries to aid them in the production process Opt to purchase a warehouse or any adequate locations located in an industrial area Hire contractual workers

Install security cameras

Hire a new designer and a new production manager

May
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1993
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June
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1993
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Date Started Hiring of y additional designers (at least 2) and a production supervisor y hiring of contractual employees May 1,1993

Estimated date to be completed May 31, 1993

Buying a site (which includes the warehouse) Purchasing of machineries Purchasing of surveillance camera Preparation of the site w/c includes y Assembly of machineries/equipment in the warehouse recently purchased y y Installation of surveillance camera Testing for any defects

May 10,1993 (Date of order/ reservation) May 17, 1993 May 21,1993 June 11, 1993

June 10,1993 (Date received/delivered) June 11,1993 June 11, 1993 June 18, 1993

M P ro ject s t o be done 0 Carpentry/ Masonry Painting Facade neon sign torage Room with plastic sign Fitting Room Right i de Wall Type Modules Left i de Wall Type Modules hoe island module Cashier Counter Bargain sale rack Component rack Listening unit i ning Chair i ning table-4 persons i ning table8 persons i ning table2 persons 1

UN E

W EEK 2

W EEK 3 4 1 2

W EEK 3 4 1 2

ULY

. 4 4

Since the regular capacity of 8 workers is 40 pieces dining chairs and 8 dining tables, adding 13 temporary workers would increase the capacity to 105 (65+40) dining chairs and 21 dining tables per week. But this capacity can be applied for only 3 weeks.

To get the total number of weeks needed to accomplish Multisales Corp. s contract.... FOR DINING CHAIRS: Total dining chairs to be finished Dining chairs that can be finished by 21 workers(105*3) Dining chairs to be finished by 13 workers Divide by capacity of 13 workers FOR DINING TABLES: Total dining chairs to be finished Dining tables that can be finished by 21 workers(21*3) Dining chairs to be finished by 13 workers Divide by capacity of 13 workers

640 pieces (315) 325 pieces 65 pieces per week 5 weeks + 3 weeks = 8 weeks 142 units (63) 79 units 13 units per week 6 weeks + 3 weeks = 9 weeks.

Contingency Plan

Negotiate with Multisales Corp Lease Machineries

Lease a Warehouse
Subcontract to speed up process Hire a designer, marketing specialist & production foreman

Finish
Thank You So Much for Listening