Question: As the chief executive officer of a large corporation, you have decided after discussion with production and accounting personnel to implement activity based management concepts. Your goal is to reduce cycle time and, in turn cost. A primary way to accomplish this goal is to install highly automated equipment in your plant, which would then displace approximately 60 percent of your workforce. Your company is the major employer in the area of the country where it is located.
a. Discuss the pros and cons of installing the equipment from the perspective of your
(1) Stockholder, (2) employees, and (3) customers.
b. How would you explain to a worker that his or her job is a non value added activity?
c. What alternatives might you have that could accomplish the goal of reducing cycle time but not create economic havoc for the local area.