Question

Q: Discuss the advantages and disadvantages of using part-time workers, subcontracting work, and building up inventory as strategies for meeting demand.

From Operations and Supply Chain Management, 8th ed.

Roberta (Robin) Russell, and Bernard W. Taylor

Chapter 16 – Lean Systems

Chapter 17 – Scheduling

Answer 1

Advantages and disadvantages of:

A) using part-time workers:

1.Advantages:

• Part time workers are easy to find
• They can be hired on lower wages  
• The factory can be operated seasonally when required due to the availability of Part time workers
• In the organisation where there requires professional services as and when required, that time part time professionals can be hired.
• Cost saving can be achieved

2.Disadvantages:

• The workers who perform well and whom the organisation wants to retain, can't be retained in an organisation because of their Pre -occupancy to somewhere else.
• Once the organisation adopts the habit of hiring part time workers, it is difficult for it to hire full time workers
• Some workers might tend to pass the time at workplace and might be less focused on the productivity as they will get the salary credited in their account in month end any how.

B)subcontracting work for meeting demands:

1.Advantages:

• Meeting of commitments: The organisation can meet its commitments made to customers for timely delivery of product as it is subcontracting part of the work.
• Obtaining professional services: The part of the work which is difficult to perform by the regular workers of an organisation can be performed by competent workers by subcontracting the work.

2.Disadvantages:

• The practice of subcontracting of work always when the demand is higher will lead to the dependability of organisation onto some one else
• The workers wont be stretch to their fullest ability as they knows that other subcontractor is there whenever demand is higher.
• The sub contractor might increase the cost overnight as he knows that organisation has no other option than obtaining their services as they need to meet the customer demands

C)building up inventory as strategies for meeting demand:

1.Advantages:

• The Strategy of building up inventory for meeting demand is advantageous when there is big project in hand and organisation can save the cost of purchasing the inventory from others
• The Quality of the inventory can be ensured and the features of inventory can be customised as per the organisational needs.
• Timely availability of inventory can be ensured as organisation itself is producing the inventory.

2.Disadvantages:

• The process of building up inventory in house to meet up the demand is tedious and complicated work as the organisation has never done the same before.
• The mistake in any of the operations pertaining to inventory building can lead to a huge loss to the organisation and waste of money.
• The recruitment of workers to build up inventory is difficult job as company itself doesn't have any experience on the same.
• Sometimes, there are higher chances that rather than making profit out of inventory building, company ends up occurring substantial loss in their account.