Draper Instruments

DRAPER INSTRUMENTS

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

EXECUTIVE SUMMARY

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. Employees are also preoccupied with the intense pressure to meet shipment schedules, leaving little time to attend to other areas. Inventory spoilage, obsolescence and build-up have resulted. Major critical success factors the company hopes to achieve include reducing inventory levels and improving quality.

Issues: How can DI motivate employees to achieve JIT objectives and track progress on the implementation of the JIT system? How can DI successfully move towards implementing and utilizing a JIT system?

Analysis: The current performance evaluation and incentive system is causing workers to behave dysfunctionally as employees are aggressively focusing all efforts on factors that are measured to maximize their performance ratings and compensation. Other areas have been left to suffer as employees are not motivated to excel in them. DI's performance evaluation system rewards poor-quality work and encourages high levels of production. Workers’ unmonitored access to an overabundance of materials has resulted in unecessary waste and the over or under production of various parts. Quality, reliability...