Reference no: EM132073799

Don Newhart walked into Ms. Martha Boyd's office and took a seat, he felt that he had learned more in the last six weeks that he had learned in four years of college. In June, Don had received his degree in business administration. He had immediately taken a job with the Check-Rite Corporation reporting to Ms. Boyd, the corporate Operations Manager. Check- Rite prints personalized bank checks in 27 plants located in major cities throughout the U.S. Don had just completed a six week training program, during which he had spent several days in each production department of the Lexington Plant. He had performed almost every job in the plant for at least a day. Ms. Boyd had invited Don to her office to discuss his experiences in the training program. Check- Rite is one of only four relatively large check printing companies in the nation, but many smaller companies compete within individual cities. The checks are printed for and mailed to individual bank customers. However, the checks are always ordered through the bank, and the banks decide which check printing company will print checks for their customer. Ten different operations involving seven types of equipment are required to produce an order of much I learned! You know before I started my training program, the closest I had come to operating a printing press was using the photocopier in the university library." "Based on your experience so far, Don, what would you say is the most critically important measure of operational performance in our business?" That's easy. It's labor productivity. The production process is labor intensive with about half the production costs in labor profits. Improvements in labor productivity could really boost profits. In fact, I wanted to discuss that with you. The plant seems to be somewhat overstaffed, except on Mondays and Tuesdays, when the inflow of orders is heaviest. I also noticed that about one third of the labor time that goes into each order of checks is devoted to proofreading or other manual inspections rather than actual production work. I believe there are some opportunities for significant improvements in labor productivity in our overall operation." Question: Do you agree with Don that labor productivity is the most critically important measure of operational performance in the check printing business? If not, what measures of operational performance do you believe are more important than labor productivity? Why?