Tektronics - Existing Issues at Tektronix 1 Reducing return...

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Existing Issues at Tektronix 1. Reducing return on the operating assets due to competition from Japanse companies 2. Cumbersome existing cost accounting system 3. High level of inventory and transactions (25000 per month) 4. Inter-personal issues between the departments (related to basically the logging of work hours) 5. Large number of transactional data each month (35000) 6. Long production process and thus lot of reporting activities associated with it. 7. A large number of unique parts and large number of vendors Issues with the existing cost accounting system 1. The overheads were allocated based on the labor costs wherein labor only constituted about 4% of the total cost 2. Cost cutting measure were implemented based in reducing the labor (as overheads were charged according to that) but that didn’t bring any fruitful result as the allocation method was flawed 3. Existing system was very complex Production Process Improvements 1. The excess work-in-progress inventory was reduced by implementing JIT techniques.
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