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AGEM - Agem Electronics Corporation Thomas G Cummings...

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Agem Electronics Corporation Thomas G. Cummings University of Southern California The Agem Electronics Corporation was one of the leading producers and an early pioneer in the electronics instrumentation industry. The company manufactured a line of instruments and other electronic devices for industrial applications. This case reports the results of a study of the instrument assembly team, one of the production teams in the Phoenix, Arizona plant of the company. This team was responsible for assembling, testing, and packaging the company's regular line of electronic equipment. The casewriter’s attention was initially called to the instrument assembly team in a conversation he had with Larry Fisher, manager of the Assembly Department. In expressing his views about the various problems and plans he had in connection with each segment of the several production units in this department, Fisher described the instrument team as the most successful and, from certain standpoints, the most interesting. The casewriter followed up this lead by securing some additional background facts on the instrument team. He found that, prior to Fisher's assuming leadership of the department, some 24 months earlier, the employees in the team had acquired the reputation of being agitators, hotheads, and persistent troublemakers. Production was down, costs had gotten out of hand, and deliveries had become very unpredictable. Some thought had been given to eliminating the entire operation. Data on labor efficiency during the subsequent 24 months showed a dramatic improvement in the instrument team’s performance. Between January of the previous year and March of the current year, the team had shown a 47 percent improvement in the dollar output of product per man-hour of work, direct labor efficiency had increased approximately 18 to 22 percent, and there had been about 8 to 10 percent improvement in the raw material utilization on instruments produced. During this same period, the team operated at 84 percent of its expense budget. In other words, it had used less on expenses than had been budgeted. During this time period, the hourly wages of the employees
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