Reference no: EM132840754

General Electric's plant in Salisbury, NorthCarolina, which manufactures electrical lighting panel boards for industrial and commercial purposes, used to be organized functionally and vertically. Because no two GE customers have identical needs, each panel board has to be configured and built to order, which frequently created bottlenecks in the standard production process. In the mid-1980s, faced with high product-line costs, inconsistent customer service, and a declining market share, managers began exploring new ways of organizing that would emphasize teamwork, responsibility, continuous improvement, empowerment, and commitment to the customer.

By the early 1990s, GE Salisbury had made the transition to a horizontal structure that links set of multi skilled teams who are responsible for the entire build-to-order process. The new structure is based on the goal of producing lighting panel boards "of the highest possible quality, in the shortest possible cycle time, at a competitive price, with the best possible service." The process consists of four linked teams, each made up of ten to fifteen members representing a range of skills and functions. A production-control team serves as process owner and is responsible for order receipt, planning, coordination of production, purchasing, working with suppliers and customers, tracking inventory, and keeping all the teams focused on meeting objectives. The fabrication team cuts, builds, welds, and paints the various parts that make up the steel box that will house the electrical components panel, which is assembled and tested by the electrical components team. The electrical components team also handles shipping. A maintenance team takes care of heavy equipment maintenance that cannot be performed as part of the regular production process.

Managers have become associate advisors who serve as guides and coaches and bring their expertise to the teams as needed. The key to success of the horizontal structure is that all the operating teams work in concert with each other and have access to the information they need to meet team and process goals. Teams are given information about sales, backlogs, inventory, staffing needs, productivity, costs, quality, and other data, and each team regularly shares information about its part of the build-to-order process with the other teams. Joint production meetings, job rotation, and cross-training of employees are some of the mechanisms that help ensure smooth integration. The linked teams assume responsibility for setting their own production targets, determining production schedules, assigning duties, and identifying and solving problems. Productivity and performance have dramatically improved with the horizontal structure. Bottlenecks in the workflow, which once wreaked havoc with production schedules, have been virtually eliminated. A six-week lead time has been cut to two-and-a-half days. More subtle but just as important are the increases in employee and customer satisfaction that GE Salisbury has realized since implementing its new structure.

Based on the above situation, answer the following questions;

a) The above situation highlights the advantages of "horizontal structure" for the company. However, horizontal structures may have certain weaknesses. Mention a few weaknesses of horizontal structure. Further, in your opinion, what could be done to minimize the weaknesses of horizontal structure? explain.

b) As evident from the above situation, there was a shift in design from mechanistic to organic; how do you think that the McKenzie's 7S model might have helped the company in embracing this change?