Aic Netbooks Case Study Analysis
Thus, it could be seen from the above analysis that three shifts a day alternative solution would maximize the company’s production efficiency, with increased profits. The total production would be 179,712 units, representing an excess amount of 49,712 units. (See appendix 2)
Qualitative analysis
The industry dynamics had changed and evolved with the need for an affordable and light weighted device for satisfying the need of “One Laptop per Child (OLPC)”. ASUS Eee succeeded to sell around 350,000 units of Netbook, with the help of mobile Intel Dothan processor,just four months after its launch in 2007. It was estimated by the industry analysts that the industry unit volume for Netbooks would increase by 15 million units.
The company is recommended to increase it’s per day shifts to three shifts a day. It will increase the production capacity of the company up to 179,712 units without increasing any capital expenditures. It will require a significant increase in the salaries of those workers who are working for the third shift. It is cost effective and efficient as compared to the other alternative solutions because other solutions require huge investment and increase a little in the production capacity.(Glaser, 1965).
Increase in working days will provide a less increase in the capacity with a high increase in the cost of labor and other costs.With an increase in its production line, the company also requires huge investment and increase in labor cost but do not maximize the capacity of production as compared to anincrease in per day shifts to three, as it requires less cost and maximizes the production capacity efficiently and effectively.
Implementation
Theimplementation of the selected alternative requires a step by step process, which are as follows:
- The solution of increasing shifts per day needs to be evaluated, as it is making the objective and goal of the company. It should be communicated well with the entire company, which includes all personnel of the company regardless of their hierarchy, because it is very important for the smooth implementation.
- Develop a coordination among all the departments and formulates a procedure for conducting three shifts in a day. It also plays a vital role in determining the tasks and align the responsibilities.
- Develop a performance tracking and monitoring system for each shift and worker separately, and establish information and feedback system for the improvement of the employees’ performance as well as the system’s performance.
- Allocate the resources to each department, calculate how much resources are required for increasing the shift in a day, such as: labors and material costs.
- Enforce the plan and evaluate the performance.
Conclusion
AIC was a low-cost manufacturer, who supplied its chipsets to the branded desktop and laptop manufacturer. AIC stepped towards ODM (Original Design Manufacturer) by designing and innovating new generation components. In March 2008, AICstarted to manufacture QuiN (Quick Net) - an Atom-Based Netbook production with a different positioning strategy. The expected demand for netbook would be 130,000 units per month. While, the company currently produces 119,808 netbooks. Thus, it is recommended that AIC should increase its production capacity in order to maximize its efficiency.
It is recommended to increaseper day shifts to three shifts per day,which will increase the production capacity up to 179,712 units, leading to giving the leverage of 49,712 units after reaching the targeted 130,000 units. It requires less budget as compared to all other solutions. Hence, it is the cost effective as well asan efficient solution for the implementation and future success of the company................................
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