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Week_1_Analysis_of_Change_Long - Walter Long The Nuclear...

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Walter Long (c:\26\walter.cas)19 June, 2010 Page 1 of 13 Walter Long The Nuclear Tube Assembly Room was a production unit of the American Radiatronics Co., a leader in the nuclear electronics industry. The company's regular line of electronic tubes was assembled, tested, and prepared for shipment in the nuclear tube assembly room. Walter Long, general foreman of the process department, described the tube room group as the most successful. Exhibit 1 is a partial organization chart. Prior to Long's assuming the leadership of the department some 24 months earlier, the workers in the room had acquired the reputation of being agitators, persistent troublemakers. Production was down, costs were out of hand, and deliveries became very unpredictable. Some thought was given to eliminating the entire operation. A report prepared by the director of industrial relations at the time, which described the existing problem, is presented in Ex. 2. Over the past 24 months the story is quite different. During the most recent three-month period the tube room's direct and allocated monthly costs averaged $60,350, while the actual sales value of the room's monthly production for the same three months averaged $175,800. Indirect costs were allocated to the department at a rate 425% of direct labor costs. A special management report presented some additional figures of interest. Between January of the previous year and March of the present year, the group had shown a 53% improvement in the dollar output of product per man-hour of work, direct labor efficiency had increased approximately 24%, and there had been about 11% to 12% improvement in the raw material utilization on tubes produced. During this same period, the group operated at 81% of its expense budget. In other words, the group used some $20,000 less on miscellaneous expenses than had been budgeted for such items. During this time period the hourly wages of the women working in the room had risen 14%. In summary, the profit position for tube manufacturing operations, as a whole, was now one of the best in the company, where previously the activity had been operating at a loss. In the most recent fiscal year the tube manufacturing operations generated profits of $457,000, while American Radiatronics Corporation's total profits were approximately $1,000,000. In commenting about the group, Long said: What is special is that our success has been accomplished by the group itself--not so much by any tangible thing that I or management did. These people, previously considered a problem group, are now performing in an efficient and prof- itable way. They have a very active interest in seeing, not only their group, but also the company, progress. This is quite an impressive thing for them to have accomplished by their own efforts. The casewriter also talked to Frank Halbert, President of American Radiatronics. In approving the study Halbert said, "I hope you find what you are looking for. It would be very important for the whole economy to bust through this 'least work for the most pay' idea workers in this country have." Later he said, "Do you really think there is any substitute for fear as a
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