Pelarsen Windows - Humans v. Robots Essay
Pelarsen Windows is in its third generation, founded initially in 1922 by Gunnar Pelarsen and now run by granddaughter and CEO Ingrid Pelarsen. The 1990s was an era of craftsmanship. One of the noted success factors for Pelarsen Windows at the time was its transition from craft to mass production. Pelarsen was a mover in streamlining the windows manufacturing process by standardizing the various components, allowing windows to be assembled in larger volumes and at remote locations. Another one of its key success factors was its innovative products such as insulated glass, solar heating and cooling, and energy efficient windows. Due to its innovative capabilities, Pelarsen Windows …show more content…
Direct Labor Costs are Inaccurate as it does not Consider Process Times
The 2008 projected income statement does not consider the difference in process times between a standard window and architectural window. As a result, the extra amount of time required to produce an architectural window is overlooked, resulting in understated labor costs. On the contrary, the direct labor cost allocated to standard windows is overstated as it subsidizes the architectural windows. The consequence is that standard windows are picking up much of the labor costs that are actually incurred by the architectural windows. The following ABC calculation considers process times per window, level of skill required per process, and hourly labor costs. The assumption is that skilled workers are assigned the more complex architectural windows while helpers work on simpler windows.