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| September 26, 2015

In today’s industry, a supply chain manager should be ready to coordinate suppliers, producers, distributors, vendors and clients so as to manage the delivery of merchandise and services inside their supply chains. In order to achieve this challenge, supply chain experts must have the capability of having a solid choice-making as well as some organizational abilities along with a different understanding in supply chain administration areas such as: acquisition, provider relations, production arranging, quality administration, transportation, stock control, project administration and service administration. On a daily basis, these managers must be ready to recognize problems and figure out corrective actions as they emerge inside the supply network.  In view of this, this paper examines two distinctive utilization cases.  These are the Realco’s Breadmaker manufacturing and Toyota’s Bumpy Road.  With the information that I discovered from this course, I will inspect the situations to distinguish the inventory chain problems and answer the particular inquiries posed.

In Chapter 15, obtained from the text of Introduction to Operations and Supply Chain Management, which is being written by Cecil Bozarth and Robert Hanfield, we discover Realco, which is being established by Mr. Johnny Chang, is considered as a cutting-edge business when it comes to the bread machine business.  In the wake of presenting the Breadmaster two years back, the association is experiencing a critical victory because of the bread machine’s characteristics and the association’s viable pricing.  Despite the fact that Mr. Chang is content with the accomplishment of the Breadmaster, he has legitimate concerns with the association’s apparent huge excess of stock and obvious rudimentary production operations.  We are asked to react to the accompanying inquiries:

  1. Develop a master production schedule for the breadmaker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco “overpromised”? In your view, should Realco update either the forecast or the production numbers?

 

Inside the Supply Chain, the essential tool utilized to manage product accessibility is the master production schedule (MPS).  Max Mueller was the one who had written, Essentials of Inventory Management (2nd Edition), and depicts MPS as the most excellent when he proclaims, “The master production plan sets out what will be manufactured, when, and in what amounts. It can choose to cover short or extensive time horizons.”(Mueller, 2011) As an additional to figuring out what, when and in what amounts to generate, the MPS is utilized to drive itemized planning activities, for example material necessities planning.  By computing the beginning stock and the determined sales for a specific end item, the MPS organizer has the capacity to meet the anticipated demand of the client by changing the corporation’s production for the estimated horizon.  This computation has the tendency to become more difficult in a multi-product situation where conjecture errors and capacity limits can add to the ease of the planning procedure. Utilizing the Realco’s situation data being furnished, the below MPS symbolizes Breadmaster product line.

REALCO BREADMASTER PRODUCTION SCHEDULE
On-Hand Inventory 7,000
Realco Breadmaker  
Week 1 2 3 4 5 6 7 8
Anticipated Demand 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Booked Orders 23,500 23,000 21,500 15,050 13,600 11,500 5,400 1,800
Expected Ending Inventory 23,500 500 19,000 -1,000 19,000 -1,000 19,000 -1,000
Master Production Schedule 40,000 40,000 40,000 40,000
Available to Promise 500 3,450 14,900 32,800

 

By examining Realco’s MPS, we found out that the Breadmaster’s expected Ending Inventory (EI) and ATP numbers illustrate a few contrasts. In computing EI, with the variables comprising of the booked EI, booked production, and the larger of the expected demands in opposition to booked orders, we can observe in week’s four, five and eight that the Breadmaster’s EI has a negative result. In any case, we can anticipate the ATP by utilizing the following variables: EI, scheduled manufacture, and scheduled orders; we see a consistent expand of units which are available for sale. Bozarth lets us know when evaluating predicted orders to scheduled orders, to recognize, “supplemental orders may possibly be materialized as time goes on” and “near term prerequisites are more precise than extensive horizon periods.”(Bozarth, 2008)  With this as a main priority, Mr. Chang might as well continue to keep an eye on booked orders and as time moves forward acknowledge bringing down the Breadmaster’s anticipated demand to go with the company’s genuine demands.  At that point, direct a matching decrease in production to be proportional with the latest estimated demand. As a substitute, Realco’s marketing group can discover an effective technique of producing sales, for example, bringing down costs.  On the basis of the ATP’s expanding quantities over the whole period, it gives the idea that the Realco sales director Jack, has not overpromised the quantity of Breadmaster units committed for sale and in fact, may as well continue to expand scheduled orders for the periods later in the anticipating horizon.  If however, the scheduled orders remain steady with week’s one through three, there should be an adjustment to the production in order to satisfy the demands that will be needed.

  1. Comment on Jack’s approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?

Jack’s strategy to making a guarantee to orders to Realco’s clients has historically confirmed to be efficient but additionally comes at an expense in potential surplus stock and danger of insufficient assets.  Abundance stock translates to an expansion in association stock holding costs, while lacking assets can cause clients to wait for production in order to draw alongside to existing commitments.  These same clients may withdraw their orders and take business somewhere if Realco does not have the capacity to deliver by the guaranteed date.  Assessing Realco’s existing procedure of designating a three week delivery time guarantees two manufacture cycles before the delivery of each order. Aside from situations where there is a sharp irregularity in demands, this has turned out to be extremely viable with just a couple of times declared where inadequate assets were accessible to take care of committed orders. Maryland McClelland indicates in her article in Decisions Sciences, “A critical part of an assembling information scheme is the Master Production Schedule (MPS).”(McClelland,1988)  She further continues on saying, “Good client service relies on successful utilization of the MPS to create delivery dates the company can satisfy.”  Realco may as well recognize preparing a MPS in order to put together client orders with the product anticipation.  Formal MPS planning will enhance the procedure by regulating production to match needed demands.  Furthermore, a well organized MPS will precisely establish product lead times which expedite faultless booking of future conveyances.

  1. Following up on Question 2, which do you think is worse, refusing a customer’s order upfront because you don’t have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?

In any type of industry, status and word of mouth is everything.  It may take several years to acquire a solid reputation and only a moment to lose it.  Recognizing an order and then neglecting to deliver as guaranteed reflects negatively on the conglomeration and debilitates any faith and report previously negative. Contingent upon the product being manufactured, inadequacy to deliver may likewise have a negative effect on downstream client’s production.  Despite the fact that nothing in life is 100%, realizing a successful MPS offers the company perceivability to production, arranging, purchasing, and top administration knowledge required to arrange and manage the manufacturing operations.

  1. Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact will this have on average inventory level?

 

On-Hand Inventory 7,000              
Realco Breadmaker                
Week 1 2 3 4 5 6 7 8
Anticipated Demand 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Booked Orders 23,500 23,000 21,500 15,050 13,600 11,500 5,400 1,800
Expected Ending Inventory 3,500 500 -1,000 -1,000 -1,000 -1,000 -1,000 -1,000
Master Production Schedule 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Available to Promise 3,500 500 -1,000 3,950 5,400 7,500 13,600 17,200

 

Modifying the MPS to reflect a planned production of 20,000 Breadmasters every week against 40,000 bi-weekly updates the expected EI.  Week’s three, five, and seven now shows a negative anticipated EI, on the other hand as with the first ever MPS, this is because of the anticipated demand for weeks four through eight staying reliably higher than the scheduled orders. While the expected EI shows a negative quantity balance for week’s three thru eight, starting on week four, the ATP numbers continue to ascent as the scheduled demands are much lesser than anticipated demands.  Provided Mr. Chang persists to experience scheduled demands as observed in week’s one thru three, Realco may as well recognize expanding Breadmaster production and future anticipated requests to guarantee adequate assets are accessible to meet client demands.

Case 16: A Bumpy Road for Toyota

  1. Is Toyota’s focus on quality consistent with Lean philosophy? Can a firm actually follow the Lean philosophy without having a strong quality focus? Explain.

In today’s industry, Lean is a buzzword that roughly everyone is acquainted with. The Lean philosophy on the other hand is more than a statement, a procedure statement, or a few tools and methods.  It is an endless chase for dispensing with all waste or “muda” from a conglomeration. In reality, one Lean consulting association, MainStream Management describes Lean as, “…a methodical approach that centers the whole enterprise on persistently enhancing quality, price, delivery, and security by trying to wipe out waste, create stream, and increment the velocity of the system’s capability to meet client demand.”(Plenert, 2008) Toyota’s concentration on quality is positively dependable with the Lean movement.  Robert Trent talks about Lean in his book which is entitled, End-To-End Lean Management: A Guide to Complete Supply Chain Improvement.  Trent highlights the significance of value in his statement, “When it comes to the lean production network there’s merely small to fall back upon once quality blunders happen, making the chase of zero defects important to lean. Striving for perfection is an indispensable part of a lean supply network.”(Trent, 2008) Within the case investigation, Bozarth tells us the story of Toyota’s mission to enhance their quality.  Beginning from the establishing fathers in the 1930’s to the current day, Toyota recognizes that it is fundamental to demand brilliance in all stages of the conglomeration, whether it is procedures, high tech equipment, or educated, knowledgeable staff. While slipping a small piece with the extension of the operations to the U.S. also a loss of important personnel because of rivalry, Toyota recognized sub-standard procedures and problems and has engaged corrective activities to solve the issues.

It is practically impossible for a conglomeration to claim it as emulating the Lean Philosophy without highlighting a core excellence focus. One of Lean’s central principals or constructing blocks is quality. Gerhard Plenert narrates in his book, “Reinventing Lean: Introducing Lean Management into the Supply Chain, “Several efficient measures of inventory network performance exist, however the most excellent focus on (1) process duration, which suggests stock diminishments and capacity raises, (2) on-time performance to client, anticipations, and (3) quality, which is the initial building block of a fulfilled client base.”(Plenert, 2006) Toyota and all conglomerations who positively value their clients will guarantee this standard resonates inside their conglomerations and take actions to rectify any variations from the normalcy.

  1. Who are the “coordinators” referred to in the article? What role have they played in educating Toyota’s workforce in promoting the TPS (Toyota Production System) philosophy? Why are they so hard to replicate?

Inside the Bumpy Road for Toyota case investigation, the organizers were knowledgeable mid-level, frontline administrators who possessed proficiency in Toyota assembling methods and techniques which are also referred as the Toyota Production System (TPS).  The careful investigation lets us know, “…the organizers turned away from the classrooms, favoring to train American shop-floor directors and hourly members through straightforwardly attacking problems.”(Bozarth, 2008) Due to the proficiency in TPS and general car production information, Toyota at first considered it challenging to imitate this class of people after rapidly developing to the U.S. Couple this deficiency in expertise with constant language obstructions, and it is not difficult to perceive why Toyota establish it as a challenge to substitute these subject matter specialists in the U.S.  It was just through Toyota’s emergency activities were they able to alleviate the quality downfall and start the road to recuperation. As said earlier, it just takes a moment to lose a client forever and Toyota required seeing a fast recovery to avoid losing further clients from the rivalry.

  1. According to Hajime Oba, what is wrong with Detroit’s approach to Lean? Based on your understanding of American auto manufacturers, do you agree or disagree?

Within the careful investigation, Bozarth clarifies Hajime Oba thought Detroit auto manufactures were essentially utilizing the Lean philosophy as a tool in which to cut inventory and the supervisor’s essential interest were to increment association production and gainfulness. Hajime Oba additionally is cited as saying managers are “…only making a Buddha image while neglecting to infuse soul in it.”(Bozarth, 2008)  This quotation implies Detroit managers were fascinated in just a speedy diminishment in company finances and the main concern, the dollar.  Mr. Oba thought instead that manufacturing company’s requirement to highlight enhancing quality and receiving the real Lean philosophy of advertising the whole quality in all aspects of the operation.  An illustration of this principal is exhibited by Bozarth when he portrays Taiichi Ohno, “sketching chalk circle on the flooring in front of a procedure on the assembly system and educating trainee’s to observe the work until they could recognize how it could be developed.”(Bozarth, 2008)  This authorized the importance of the TPS idea at the earliest phases of a worker’s career.  Bozarth gave a different sample in his case study when he portrays Hajime Oba and Fujio Cho accompanying seventy mid-level administrators to their dealer’s kaizen or “transform for the better” occasions.  These administrators became self-satisfied and liked to sit in their workplaces guiding suppliers instead of partaking of upgrades on the manufacture floor and leading kaizen occasions.  Cho and Oba tried to strengthen the TPS mentality by a small hard love.  Consecutively to stay competitive; this lecture on quality is something that the American auto manufacturers have had to study themselves.

In the past American car makers, were more enthusiastic in creating large quantities of vehicles rather than high quality durable cars.  With foreign country auto manufacturers for example Honda and Toyota producing better-quality vehicles accompanied with the current recession, it soon became obvious American vehicle makers required a standard change so as to compete efficiently. They could no longer mass manufacture substandard products that disappointed buyers and possibly endanger lives.  They should accept the lean philosophy by hiring inventive leaders fit for developing personnel that lived, studied and taught the Lean reasoning and strategies.  Over the previous years American car makers have seen a critical development in quality.  In a February 2012, there was an article from AP Auto Writers; Dee-Ann Durbin and Tom Krisher which says, “In the previous five years, worldwide rivalry has compelled automakers to enhance the quality and dependability of their vehicles.”(Durbin & Krisher, 2012)  Through the consolidation of the Lean philosophy, American car makers are once again among the principals in the industry.

  1. There is an old saying “Haste makes Waste”. How does this apply to what is happening in the Georgetown plant? What is Toyota doing about it?

“Haste makes waste” is an expression that is generally used to portray somebody or something endeavors to finish a task too rapidly and winds up with a poor result.  In numerous occasions, it is better to complete tasks in a constant, precise manner instead of doing rapidly since hurrying can truly slow down the completion of the procedure.  This is precisely what Toyota encountered with the Georgetown plant.  The leaders inside the plant were worried more with expanding the quantity of vehicles manufactured per hour than guaranteeing quality products were sent to clients.  This little apprehension for quality and loss of important leaders brought about the company manufacturing poor quality products and a plunge to eighth place in JD Power’s primary quality standings, declining behind numerous American auto makers.  Notwithstanding the waning JD Power’s quality appraisals, the Georgetown plant tumbled from being the second U.S. 2001 plant into becoming a twenty-sixth place plant in only a year of time duration.

To remedy this decrease in the Lean philosophy, Toyota enlisted Hajime Oba to help with the execution of the Georgetown mid-level manager advancement venture. This activity revolved around, “…developing the manager’s dominance of Lean manufacture to a level where it could be used without depending more on Japanese TPS coordinators”(Bozarth,2008)

Oba comprehended in order to overturn the slip in Toyota ranks and stop the decrease in the mid-level director’s TPS understanding, he had to instruct these front line administrators on how to become efficient leaders who comprehended the Lean theory and could pass this information to their subordinates.  The utilization case lets us know, “Toyota is anticipating the latest level in TPS information, one that is basic enough to function without the consistent aid of Japanese organizers with 20 years of experience or further in Lean production.”(Bozarth, 2008)

With the rivalry levels as sharp as they are in today’s enterprises, supply chain director must be generally versed in all features of the business.  In some given day, these specialists may confront an extensive variety of challenges.  Having the abilities to properly predict and assess master production plans and grasp the Lean philosophy are only two samples investigated in this paper.  Day by day, these directors must be ready to recognize the issues and verify corrective activities as they roll out inside the supply chain.  By effectively and productively regulating the stream of material and items both from upstream and downstream procedures, supply chain administrators will maintain their company’s operation at its generally effective and adequate way.

 

 

 

 

 

 

 

References:

Bozarth, C.C., and Handfield, R.B. (2008). Introduction to Operations and Supply Chain

Management (2nd ed.). Upper Saddle River, New Jersey: Pearson Prentice Hall.

 

Dubin, D. & Krisher, T., (2012)The Associated Press, Cars have improved quality, reliability

over past 5 years, Retrieved from: http://www.nola.com/business/index.ssf /2012/02/cars_have_improved_quality_rel.html

 

McClelland, M.,(1988) Decision Science, Order Processing and the Master

Production Schedule, Retrieved from: http://search.proquest.com.proxy-

library.ashford.edu/docview/198082818/13C413FFC1B6A2AE9CA/3?accoun

tid=32521
Muller, M,.(2011) Essentials of Inventory Management (2nd Edition). Retrieved

from: http://site.ebrary.com/lib/ashford/Doc?id=10461073&ppg=155

 

Plenert, G.,(2008) Reinventing Lean : Introducing Lean Management into the Supply Chain.

Retrieved from: http://site.ebrary.com/lib/ashford/Doc?id=10150558&ppg=158

 

Trent, R.,(2008) End-To-End Lean Management: A Guide to Complete Supply Chain

Improvement, Retrieved from: http://site.ebrary.com.proxy-library.ashford.edu/

lib/ashford/

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