Hi. Thank you all for the feedback and support on the f297 exam questions I have already posted. A number of you have asked me to email you any handwritten ones, I will do them by the end of this week. But for now, I will continue posting new essay questions. Comment if you would like any done in particular 🙂
This question has been suggested by the APT support pack but answered by myself.
29.) Should APSL relocate to the factory in Hull in order to increase capacity (lines 107-13)? Justify your view.
Currently, APSL operates from three separate buildings totalling to 12 000 m2. Inevitably, operating from three different units is likely to cause a number of inconveniences such as a lack of efficency, frequent distruptions to production as well as poor communication within APSL. As a result, Kate proposes the idea to moving to a factory in Hull which means that APSL will be able to operate under one roof. Despite its advantages, APSL will need to effectively weigh up their decision in order to ensure that the advantages outweigh the negative impacts.
One advantage of moving to the factory in Hull is that production will become a lot more efficient. Last year, APSL was frequently faced with haults in production due to suppliers delivering produts to the wrong site out of the three. Therefore, by moving to the factory in Hull it means that even if suppliers deliver to the wrong department, it is easier to move materials around one single site rather than three. When suppliers deliver to the wrong site, it results in a domino affect impacting production as it means that APSL are unable to start production immediately and therefore could impact the business reputation even further as customers are unlikely to get products at the expected delivery time due to the production process taking place later than planned. In particular, APSL sees the “just in time” production materials delivering to the wrong unit and therefore not only will the Hull site be an easy drop off point for suppliers, but also due to the increase in capacity, the factory will now be able to store a lot more supplies in the warehouse and therefore will not need to rely on JIT production to carry out orders through having raw materials already stored in the factory.
APSL moving to Hull will also improve communication. Due to the business being in one single unit, it means that decisions can be easily passed through different departments with little confusion. For example, if an urgent meeting is to be held, this information can spread much faster and easier through one single site as opposed to the previous set up of three. In addition to this, it is likely that customers will recieve their products much faster. If APSL have one site, it means that materials can swifty shift from production through to distribution with little interruption. The move to a new single factory in Hull is likely to improve the efficency as it removes any confusion and contrusction haults in the business.
However, as with all relocations in business, APSL will face challenges. Relocating to the factory in Hull will mean that staff will have to travel a total of 80 miles from the estate in Loncolnshire to Hull and therefore APSL will need to consider HR issues. Whilst the move could derive benefits for staff, it is important that they consider the flexibility of current employees. The move will mean that some workers will have to move along with the business in order to continue to benefit from job stability. Although this may seem easy, it will be a move that staff will be reluctant to pursue due to having their own families and community back in Lincolnshire. However, another possibility is that the current staff of APSL could travel back and forth each day in order to work their shift, which will be costly for travel and petrol. The managers of APSL could decide to subsidise travel costs, which is likely to keep some employees of APSL however it may mean that the business is suffering from more disadvantages from keeping current staff rather than employing new ones. There are obvious advantages to hiring new staff to go along with the new building in Hull. This is advantageous as it is liklely that the employees that are most loyal and motivated working at APSL will be those that opt to move with the business and therefore APSL will be able to take the ‘creme of the crop’ employees that are happy with working at the business. Whilst the current employees seem satisified at their job, employing new staff will mean that new ideas and fresh minds are bought to the business. This in itself is advantagous as new employees are also more motivated to grasp the business and the way it operates, in an aim to prove their selves from the outset to managers. However, this will cause implications for APSL as it means that they will have to spend both time on money hiring new people. Hiring new staff will mean that APSL will need to train the new employees to the high quality standards that APSL place a high importance on achieving. In addition to this, APSL will need to spend adequate time in finding the right people for the job, as well as taking time to conduct interviews. It is reasonable to argue that APSL should start the recruitment process whilst still operating in the current factory, as it means that they will not have to delay the process of moving to a new factory even further and there will be employees ready and trained to begin when APSL move.
In addition to HR implications, APSL will also need to consider their current stakeholders. One important stakeholder in this move will be the local community. APSL moving to Hull will both make staff redundant in the current area whilst improving the unemployment rates in Hull. The local community of Hull will both face advantages and disadvantages when introduced to the idea of a new factory. The local community will be weary about APSL’s move due to the current issues of non-compliant parts being disposed of incorrectly and therefore causing inconvenience to members of the public seen through the complaint letter. However, if APSL do move, they are likely to bring inward investment to the area of Hull, through employing local members of the community as well as the possibility of importing materials from local suppliers. Thus, while Hull might be unsure about the pollution a new factory will bring to the area, they will need to recognise the obvious financial advantages that will be a direct outcome of a new factory.
Cost is another main factor that will dominate APSL’s decision to move to Hull. It is important that APSL evaluate whether they have the means to move to the new location in Hull as a larger property is likely to incurr more costs. One way that APSL can do this is look at their retained profits and find out if they have enough spare cash to subsidise the cost of moving. If APSL find that they do not have sufficient funds, they will have to evaluate appropriate sources of finance. However, APSL taking out loans from banks or an overdraft will mean that they will enter debt even before the move which is an undesirable outcome that will come from moving to Hull. In addition to moving factory, APSL may need to figure out if they have enough spare cash to fund the rest of it’s projects that they are also thinking of such as utilising flaxiboard as well as a heat energy saving device.
It is apparent that APSL have a lot of projects going on at once for example the possible move to Hull, using new raw materials and introducing a third time shift. However, if APSL prioritise the factory moving to Hull, the business will certainly see some benfits. In addition to increased efficiency, APSL is likely to improve communication across the business and therefore it will ultimately result in a positive impact on the business and the way it runs. If APSL have sufficient means to move to Hull, it is advised in order to gain maximum capacity and reach the best return on their investment.