Readymade Kitchens Ltd (RMK) is a manufacturer of ready-made kitchen units which they supply to the...

 

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Readymade Kitchens Ltd (RMK) is a manufacturer of ready-made kitchen units which they supply to the trade (e.g. housebuilders and self-employed kitchen contractors) as well as large do-it-yourself (DIY) retailers such as B and Q, Homebase, and Wickes. RMK sources 70% of its raw materials, mainly wood for worktops and doors, from countries in South America and Africa. The company employs 70 production workers in its factory in Leeds. They are employed on a two-shift basis i.e. 07:00 - 15:00 hours and 15:00 - 23:00 hours Monday to Thursday and 07:00 - 12:00 hours and 12:00 - 17:00 hours on Friday. All production workers are paid the same hourly rate of pay which meets the UK Government's minimum wage legislation. The work is relatively simple as RMK has invested heavily in the latest production technology. However, the factory environment is dusty and noisy. Employees are supplied with protective face masks, but many do not use them as they complain that wearing them is uncomfortable, especially because the factory is a very warm environment. The factory manager, Brian Wood, is concerned about the recent increase in labour turnover in the factory and the effect this is having on productivity. (See Table 1). Table 1: Number of Leavers and Factory Output - January to April 2020 January Number of leavers Factory output (units) February 1 11500 March 2 10000 April 3 9500 12000 Brian Wood asked the HR manager to carry out exit interviews with employees to find out why they are leaving RMK. The results of these interviews are shown in Table 2. Table 2: Result of Exit Survey of Leavers in the Last 4 months Reason for Leaving Number of Responses 6 Dissatisfied with wages Unhappy with working environment Tasks are repetitive and boring No opportunity for promotion 4 4. Brian has shared the labour turnover, labour productivity and results of the exit survey with the Operations Director, James Nail. James is also concerned at the turnover and productivity figures and the results of the exit survey. "We need to do something to improve productivity and the best way of doing so is to reduce our labour turnover" James told Brian. RMK distributes its kitchen units using its own fleet of 10 delivery vehicles. However, the vehicles are reaching the end of their useful life and need to be replaced. In a recent board meeting, James Nail suggested that instead of replacing the vehicles RMK could use specialist delivery companies. "This will reduce the need for capital investment in new vehicles and we will also save the cost of employing drivers", James told the other directors. "Although we will have to pay for our kitchens to be delivered to customers, I am sure that it in the long-run it will be a cheaper option which will reduce costs and increase profits", James added. Readymade Kitchens Ltd (RMK) is a manufacturer of ready-made kitchen units which they supply to the trade (e.g. housebuilders and self-employed kitchen contractors) as well as large do-it-yourself (DIY) retailers such as B and Q, Homebase, and Wickes. RMK sources 70% of its raw materials, mainly wood for worktops and doors, from countries in South America and Africa. The company employs 70 production workers in its factory in Leeds. They are employed on a two-shift basis i.e. 07:00 - 15:00 hours and 15:00 - 23:00 hours Monday to Thursday and 07:00 - 12:00 hours and 12:00 - 17:00 hours on Friday. All production workers are paid the same hourly rate of pay which meets the UK Government's minimum wage legislation. The work is relatively simple as RMK has invested heavily in the latest production technology. However, the factory environment is dusty and noisy. Employees are supplied with protective face masks, but many do not use them as they complain that wearing them is uncomfortable, especially because the factory is a very warm environment. The factory manager, Brian Wood, is concerned about the recent increase in labour turnover in the factory and the effect this is having on productivity. (See Table 1). Table 1: Number of Leavers and Factory Output - January to April 2020 January Number of leavers Factory output (units) February 1 11500 March 2 10000 April 3 9500 12000 Brian Wood asked the HR manager to carry out exit interviews with employees to find out why they are leaving RMK. The results of these interviews are shown in Table 2. Table 2: Result of Exit Survey of Leavers in the Last 4 months Reason for Leaving Number of Responses 6 Dissatisfied with wages Unhappy with working environment Tasks are repetitive and boring No opportunity for promotion 4 4. Brian has shared the labour turnover, labour productivity and results of the exit survey with the Operations Director, James Nail. James is also concerned at the turnover and productivity figures and the results of the exit survey. "We need to do something to improve productivity and the best way of doing so is to reduce our labour turnover" James told Brian. RMK distributes its kitchen units using its own fleet of 10 delivery vehicles. However, the vehicles are reaching the end of their useful life and need to be replaced. In a recent board meeting, James Nail suggested that instead of replacing the vehicles RMK could use specialist delivery companies. "This will reduce the need for capital investment in new vehicles and we will also save the cost of employing drivers", James told the other directors. "Although we will have to pay for our kitchens to be delivered to customers, I am sure that it in the long-run it will be a cheaper option which will reduce costs and increase profits", James added.

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