Practise IB Business Management HL 5.3.3 by applying cradle to cradle design and manufacturing concepts to exam-style questions.
KA
K A is a public limited company that designs, manufactures and sells air conditioners. K A 's unionized employees are motivated and efficient despite not being involved in any decision making. However, they are resistant to change.
The market and competition for air conditioners are growing rapidly. K A operates at full capacity but stock turnover has slowed.
Primary market research revealed that:
- consumers do not differentiate KA air conditioners from those of its competitors. All products are perceived as medium price and medium quality
- KA's customer service is rated as poor
- customers demand energy-efficient products using ecologically sustainable production methods.
To exploit opportunities and overcome weaknesses and threats, KA's management has decided to redesign its products so that they are energy efficient. K A is considering two options:
- Option1: Implement lean production methods, which includes investing in ecologically sustainable machines that will increase capacity by 10 %. Total quality management (TQM) will also be implemented. However, the financial manager is worried about K A 's ability to meet high initial costs. The forecasted payback period is three years and average rate of return (ARR) is 4 %.
- Option 2: Outsource the production to QS, a company known for its reliability and high capacity to produce excellent quality air conditioners using cradle to cradle manufacturing principles. However, QS refuses to sign an exclusive long-term contract with KA, insisting instead on renegotiating the contract every two years. KA will have to close its production facility and will use the cost savings to improve customer service and to reposition and differentiate its air conditioners.
Employees have heard rumours of both options and fear for their jobs. Strike action is being considered.
With reference to QS, explain two features of cradle to cradle manufacturing.
With reference to Q S, explain two features of cradle to cradle manufacturing.
Cradle to cradle is a sustainable form of manufacturing. QS seeks to create manufacturing principles that attempt to use production techniques that are efficient but also sustainable and waste free. Two features of using cradle to cradle with reference to Q S are as follows:
As its name suggests, Q S will design and produce its air conditioners in such a way that most, if not all, of the materials used are recyclable. These materials (like glass, metal, plastic) that form parts of the air conditioners will be recyclable and used again for the production of future models. This will minimise waste.
Cradle to cradle manufacturing with also allow Q S to reuse some of the ready components of the old air conditions in the new models instead of disposing of those parts. QS might have to offer some financial incentives for the customers to return their old/outdated air conditioners.
The air conditioners will also be built with biodegradable materials if Q S cannot recycle the materials: for example, the carton for packaging of the air conditioners. This aspect will allow QS to reduce the environmental impact of its air conditioners.
Accept any other relevant examples and explanation.
Application here is very difficult - all of the stimulus info is about KA and gives no real links to QS - hence I believe to avoid generic responses, candidates should at least make reference to 'air-conditioners" ie if responses just refer to QS and this could be replaced with any other company - then this is generic and only [1].
Mark as 2 + 2.
Award [1] for each relevant feature explained and [1] for appropriate application to the organization/type of products to a maximum of [2].
[2] cannot be awarded for the difference if the response lacks either explanation and / or application.
For example:
- For an identification or a description of a feature with or without application [1].
- For explanation of a feature with no application [1].
- For explanation of a feature and application [2].