Leading Lean Projects: Analyzing Issues and Recommending Solutions

This report analyzes the challenges faced by Precision Engineering Works (PEW), an equipment manufacturing business in the telecommunication industry. The report identifies the root causes of PEW's declining performance, including increased market competition, pricing pressures from new suppliers, and employee attrition. It examines the impact of these issues on the organization, such as reduced revenue, low employee morale, and management frustrations. The report also discusses the importance of employee retention and its effects on the overall performance of the organization. To address these problems, the report recommends implementing an incentive policy to boost employee morale and improve performance. The assignment underscores the significance of strategic management and proactive measures to maintain a competitive edge in a dynamic market environment.

Running head: LEADING LEAN PROJECTS
LEADING LEAN PROJECTS
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction:........................................................................................................................3
Discussion:...........................................................................................................................4
Root cause of the problem:..............................................................................................4
Pricing issue:....................................................................................................................4
Why people leaving?.......................................................................................................5
How can it affect the organization?.................................................................................5
Stress problem.................................................................................................................7
Recommendation:............................................................................................................7
Conclusion:..........................................................................................................................8
References:..........................................................................................................................9

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Introduction:
The aim of this assignment is to identify the issues and the root cause of the issue, why
the employees are leaving and why there is no growth in the organization (Scott, 2015).
Precision engineering works are an equipment manufacturing business that specialises in making
plastic moulding equipments and parts for telecommunication industry (Ahn et al. 2012). They
are in the industry for nearly 30 years and they have built a strong market which includes some
of the successful telecommunication company of the country. The assignment will also discuss
the environmental factors that are affecting the business organization. Analysis of the
management will also be carried out that will give an idea about the management issues and how
it can be solved so that the organization can grow in the market.

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Discussion:
Root cause of the problem:
The main reason behind the organization’s poor performance in last few years is the
increase of the competition in the market (Hanus & Fox, 2015). In last few years many new
suppliers have emerged who are offering the same products and this is affecting the organization
in earning revenue.
The new competitors are bringing new strategies and offering the products at ajooptions toi
lower cost, which is attracting the telecommunication companies to sell their products. This will
reduce the market share and the new suppliers will be highly benefited by this. The bargaining
power of Precision Engineering works are also becoming less as the customer are now having
more options to explore.
Pricing issue:
Precision engineering company is facing problem with their pricing issue. The
organization is highly affected by the pricing strategy that the other new firms are using in the
market. The increased number of supplier in the market is reducing the bargaining power of the
supplier. Due to the increased number of competition in the market the revenue are being shared
among the different suppliers. Due to this reason the profit of the Precision Engineering works
are reduced by 45%, which affected the overall operations of the business. The suppliers are
supplying their products at a very cheap rate by compromising with their quality and some
suppliers are selli8ng their products to their customers by keeping a very low profit margin. This
is because the new firms are in the introductory phase in the product life cycle and they needs to
capture the market.

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Why people leaving?
It is evident that the employees are leaving from Precision engineering works and there
can be a number of reasons behind this (Ahammad et al., 2016). Precision management works
does not have proper growth option in the market. Therefore, the employees of precision
engineering works are also not having any growth in future. As there are new suppliers in the
market the profitability of the organization is affected by 45% and this increases the risk of
uncertainty for the employees of the organization. The suppliers are offering better job roles and
they are getting more pay for the same work. The new suppliers are selling their product in such
a way which is helping them to overshadow precision engineering works. These are some of the
reason for which the employees are leaving the company.
How can it affect the organization?
The high attrition rate in the company due to the increased number of options and better
job opportunity can affect an organization in various ways (Ratna & Chawla, 2012). The high
rate of employee turnover affects the revenue and apart from there are number of ways in which
the organization is affected and those are listed below:
High costs: The high turnover rate is expensive to manage. Losing a skilled employee
may bring costs for example, Severance pay and increase the administrative tasks for example
exit interviews. This also increases the selection, recruitment and the hiring process again. Once
the organization hires the new employee he have to again train him, which is very time
consuming and at the same time it is very expensive.
Low morale: An organization with high turnover suffers from low employee morale. The
organizational culture is the end result of the norms and value which is made by the collection fo

6LEADING LEAN PROJECTS
employees who works collaboratively in a workplace. Motivating the employees and help them
to share their views in the organization about the business helps them to bring out the best out of
them and increases their morale. An organization should have a good employee relationship and
there should be high employee retention arte in order to increase and maintain high employee
morale.
Poor performance: High turnover means that organization is not having a better
workplace condition to work in. It can also mean that there is no growth opportunity in the
organization. The high turnover rate will affect the business operation of Precision Engineering
works and this affects the performance of the organization. In case of high turnover the
organizations have to recruit employees who are not well skilled, thus it will affect the
organization to perform effectively in the market. The poor performance of the employee will
affect the business revenue and the profit margin of the organization and ultimately it will
decrease their share.
Management frustrations: Managers of the organization rapidly get frustrated with the
constantly revolving door of employees. In retail, for instance, a manager finds himself spending
so much time hiring and training new employees he can't coach and develop those who have
been around. This contributes to longer-term employees getting upset and leaving. Plus, poorly
equipped and developed employees place more burden on the manager to work hands-on in the
business or store. This takes away from his decision-making and supervisory duties

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Stress problem
The poor organizational performance and the high turnover rate in the organization will
tend to increase the stress level of the workers and the managers (Scott, 2015). The high turnover
rate will force the other employees to work more and to fill the gaps that are left by the
employees who left the organization. This will also affect the performance and health condition
of the workers.
Recommendation:
To stop the high turnover rate from making any further loss the management should
immediately implement the incentives policy, which will help them to tackle with the problem.
This will boost the employee morale and will also improve their performance.

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Conclusion:
This assignment discusses about some of the issues that an organization was
facing. The name of the organization is Precision Engineering Works. Precision engineering
works are an equipment manufacturing business that specialises in making plastic moulding
equipments and parts for telecommunication industry. They are in the industry for nearly 30
years and they have built a strong market which includes some of the successful
telecommunication company of the country. The organization is facing problems with the high
turnover rate in the organization. The high turnover rate in the organization will affect the
organization in number of ways for example High costs, Low morale, Poor performance,
Management frustrations. The employees of precision engineering works are also not having any
growth in future. As there are new suppliers in the market the profitability of the organization is
affected by 45% and this increases the risk of uncertainty for the employees of the organization.
The suppliers are offering better job roles and they are getting more pay for the same work. In
order to fix the problem the organization needs to implement an incentive policy that will boost
the morale of the employee and at the same time will increase the performance.

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References:
Ahammad, M. F., Tarba, S. Y., Liu, Y., & Glaister, K. W. (2016). Knowledge transfer and cross-
border acquisition performance: The impact of cultural distance and employee
retention. International Business Review, 25(1), 66-75.
Ratna, R., & Chawla, S. (2012). KEY FACTORS OF RETENTION AND RETENTION
STRATEGIES IN TELECOM SECTOR. Global Management Review, 6(3).
\Hanus, M. D., & Fox, J. (2015). Assessing the effects of gamification in the classroom: A
longitudinal study on intrinsic motivation, social comparison, satisfaction, effort, and academic
performance. Computers & Education, 80, 152-161.
Scott, W. R. (2015). Organizations and organizing: Rational, natural and open systems
perspectives. Routledge.
Ahn, S. H., Lee, K. T., Kim, H. J., Wu, R., Kim, J. S., & Song, S. H. (2012). Smart soft
composite: An integrated 3D soft morphing structure using bend-twist coupling of anisotropic
materials. International Journal of Precision Engineering and Manufacturing, 13(4), 631-634.