Identifying Changes in Manufacturing Process and Costs Due to Case Study

Identifying Changes in Manufacturing Process and Costs Due to Automation & Applying ABC to Small Businesses - Case Study Example 2. This kind of the manufacturing process reduces the employability of the unskilled labor. The semi-skilled labor or the highly skilled labor’s demand grows as some knowledge is required in operating the machineries of an engineering based manufacturing company. But the best part of the automated process is that the employee’s physical labor reduces but at the salary paid earlier or at an increased level of salary. 3. Depending on the level of automation the impact on the company workforce falls on the employees of the company. Generally the existing employees take a lot of time in adapting to the changing working condition of the company. This may result in the employees losing their job and being replaced but such employees who have prior knowledge about the automation process of the firm. 4. The automation process of the company may result in the improved quality of product which can be made affordable at a cheaper price than before. Automation process is both repeatable as well as precise which ensures the manufacturing of the product with same specification, thus leading to the high efficiency level of the company. 5. The overhead costs related to the direct material, direct labor and other manufacturing costs get affected after the implementation of the automation process to the extent that initially there is a rise in the cost because of the conversion to the automated process. But after reaching the break-even point of the company’s per unit cost of the product seems to decrease with time in terms of all manufacturing cost except labor. The labor cost is usually high because employing of skilled labor is essential for manufacturing companies with automated process. Moreover, with the further updating the machineries of the company; cost in labor increases in the process of training as well. 6. The automation affect may tend to increase the fixed and the variable proportion of the company. This rise may usually come