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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working in the team had risen from an average of $9.00 per hour to $9.75 per hour. In summary, the profit position for instrument manufacturing operations as a whole was now one of the best in the company, where previously the activity had been operating at a loss. This record of progress had been widely recognized throughout the company. In commenting about the team, Fisher said: The more or less unique or different aspect of this performance was that it was accomplished by the team itself—not so much by any tangible thing that I or management had done. These people, who had previously been considered a problem team, are now performing in an efficient and profitable way; and they have a very active interest in seeing not only the team in which they were engaged, but the company as a whole, progress and make profits. It seems to me that this is quite an impressive thing for
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This note was uploaded on 07/20/2008 for the course BUAD 304 taught by Professor Cummings during the Spring '07 term at USC.

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AGEM - Agem Electronics Corporation Thomas G. Cummings...

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