Eastern Talon Company Case Study

2213 words - 9 pages

The purpose of this report is to put forth a recommendation for ETT about whether or not it should centralize its Long-Haul Operations Department. To do this the company must move its dispatchers from Laval, QC to its head office in Mississauga, ON. In addition to a financial cost and benefit analysis based on the relevant costs associated with the move (i.e. subleasing and layoffs), human resource issues that may arise given that the staff is unionized will be addressed.

Qualitative Analysis
Workforce and Layoff
The company is facing a big decision about its dispatchers. Relocating them to Mississauga will optimize the contact between them and accounting department, decreasing their ...view middle of the document...

So it is important for ETT to keep a good relationship with this union to avoid reprisals. First, the company has to respect union regulations before laying off any employee, and agreements have to be set up between both organizations to reach a satisfactory point in this issue. It does not seem that ETT already looked for the union to deal with this issue, and this conversation can help the company reduce expenses with these employees that will be laid off if the union accepts some points discussed by the company. The union can have a strong impact in company’s productivity through long period of strikes and lockouts if they do not reach a suitable negotiation.

Quantitative Analysis
Size of the Long-haul Operations Department
Currently there are 45 dispatchers within the Long-Haul Operations Department. Of their 8-hour work day, this staff has 6.5 productive hours in which to complete their daily tasks. These include: delivery logistics (3.75 hours), customer service (2.5 hours) and miscellaneous administration (0.25 hours). The largest portion of their productive time is taken up by delivery logistics work which is done in conjunction with billing personnel who are part of the accounting department located in Mississauga. If the dispatchers are also relocated to Mississauga, this time will be reduced by 40% (1.5 hours), to only 2.25 hours due to their proximity to the Accounting department. This reduced task time for delivery logistics will lead to an overall reduction in the number of productive hours each day, unless each staff is given more work:
{Productive hours1 = Delivery logistics + Customer service + Misc. admin. = 3.75 + 2.5 + 0.25 = 6.5}
{Productive hours2 = [Delivery logistics * (1-0.4)] + Customer service + Misc. admin.
= 2.25 + 2.5 + 0.25 = 5}
The second option will decrease the number of productive hours per dispatcher if the amount of work does not increase, or if staff level does not decrease. Since increasing demand is outside of the company’s control, each dispatcher must be given more work to fill the remaining 1.5 hours that make up a productive workday, and so not all 45 will be required. Increased productivity per staff member will lead to a reduction in the total number of dispatchers needed:
Number of dispatchers in Laval = 45
{Efficiency rate in Mississauga = 5 hours/6.5 hours = 76.92%}
{Number of dispatchers in Mississauga = Number of dispatchers in Laval * Efficiency rate in Mississauga = 45 * 76.92% = 34.61}
If ETT decides to move Long-Haul Operations to Mississauga, it will need only 35 dispatchers with the current rate of demand.

Differential Analysis
Recurring Inflows or Savings
There are a total of 45 dispatchers within the Laval office, and only 60% of those with less than 10 years of service (i.e. ‘junior’ dispatchers) are willing to move:
{0.6 * 15 junior dispatchers = 9 dispatchers moving to Mississauga}
The remaining six junior dispatchers must be laid off as the union favours...

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