Bromton Bikes Essay

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Brompton Bikes 1. Examine the potential benefits and drawbacks to the early days of Brompton of having a labour intensive production system. There are many benefits and drawbacks to having a labour intensive production system. The benefits to this type of system are listed as follows; it provides better flexibility, especially if the staff are multi-skilled, creates employment within our country, more personal responses to customers, can offer tailor made goods to meet customer need, and it gives the staff a chance to continuously improve. The drawbacks to this type of system are mentioned in the following list; there could be major problems concerning labour relationships (union action), there could be possible workforce shortage (this seemed to be Andrew’s prime predicament), and high human resources management costs. In Andrew’s situation, the labour intensive system meant that he had to be extremely dedicated to his individual project, which possibly could have taken up some of his precious time. 2. Explain the business benefits to Brompton of its £400,000 investment in machinery for making bike frames. In 1973, the business was just about breaking even, but production was too labour intensive to allow the business to be profitable. Andrew had already then realised that his business lacked the capital to automate production, and in 1995, after raising enough money through profits, decided to invest £400,000 into automated, computer-controlled machinery. This is turn meant that the bikes had stronger bike frames and also made operations far more capital intensive. There are also many more benefits to switching to a more capital intensive system; there is a substantial reduction in human error, there is greater speed and uniformity in the production of bikes, meaning Andrew can produce a gargantuan amount of bikes, an extra ease of workforce

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