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Monitoring material and labour: how can we monitor the labour hours and quantity of materials used per order during the production process?

Degeling, K. (2013) Monitoring material and labour: how can we monitor the labour hours and quantity of materials used per order during the production process?

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Abstract:In the high competitive environment of today it is important for companies to charge right prices for their products. This is so important, because too low prices can eventually lead to bankruptcy and too high prices will result in losing customers to competitors. To calculate a good price for a product, the costs per product are required. These costs are hard to determine when the processes within the company are not adapted to gathering the required information and developing such processes is a difficult and hard to structure project. Another obstacle in developing such processes is the fit in the organisation, most general methods do not take into account the other processes and context of the company. This report offers a model for developing a process for the monitoring of the quantity of material and the quantity of labour that is used for the production of a production order and also take into account the other processes and context of the company. The methodology that is used for developing this method is the Design Science Research Methodology, which offers a six step method with multiple starting points. First the problem is identified and motivated, second the objectives of a solution are defined. The third step is to design and develop the method, which is demonstrated in the fourth step. The fifth step is to evaluate the demonstration and the sixth and last step is to communicate the method. The problem statement that is central in this report is: ‘How can we monitor the labour hours and quantity of materials used per order during the production process?’ The associated purpose is to design a method for the development of a process for monitoring material and labour consumption. Using the Design Science Research Methodology resulted in a two-­‐phase model in which eight steps are fulfilled. The first phase is called the investigation and exists out of four steps: defining the project, analysing the context of the organisation, analysing the processes within the company and determining the main problem. The second phase of the method is called the development and also exists out of four steps: designing multiple solutions, choosing the best solution, communicating, evaluating and improving the solution and implementing the solution. The demonstration of the method proved the method to be efficient and effective, also the practical perspective of the method proved to be very useful. Two aspects of the method turned out to be improvable. The first point for improvement is the involvement of the employees; these should be involved more in the investigation phase of the method. The second point for improvement is the moment at which information for different solutions is gathered from other companies; when the time horizon of a project is short, this should be done before multiple solutions are developed and not during the development. Also the use of the Analytical Hierarchy Process can be reconsidered. The project resulted in an efficient and effective method for developing a process for monitoring the material and labour consumption. The practical perspective turned out to be an appreciated aspect of the method. The employee involvement and the moment at which the information gathering from other companies starts, are improved as result of the evaluation.
Item Type:Essay (Bachelor)
Clients:
United Springs B.V., Hengelo (O), the Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:http://purl.utwente.nl/essays/63711
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