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Case Studies

Case Study Questions


Francisco Perez Jr.
Bus 307 Operations Management & Quantitative Techniques
Instructor: Khang Ta
October 5, 2015

Case Studies

In todays industry worldwide, the 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 accomplish this challenge,
supply chain experts must have the potential 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. Every day, these
managers must be ready to identify problems and figure out corrective actions as they become
known inside the supply network.
In this paper it will examine two individual utilization cases. These are the Realcos
Bread maker manufacturing and Toyotas Bumpy Road. This paper will discuss the situations
and distinguish the inventory chain problems and answer the particular inquiries posed.
According to the text of Introduction to Operations and Supply Chain Management, which was
written by Cecil Bozarth and Robert Hanfield. We read about Realco, which is being established
by Mr. Johnny Chang, is considered as a cutting-edge business when it comes to the bread
machine business. Although the fact that Mr. Chang is content with the accomplishment of the
Breadmaster, he has reasonable concerns with the association's apparent huge excess of stock
and obvious basic production operations.
Looking closely inside the Supply Chain, the important 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 describes MPS as the most
brilliant when he announced, 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,

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2011) As an additional to figuring out what, when and in what amounts to produce, the MPS is
utilized to drive itemized planning activities, for example material necessities planning. This is
done by computing the beginning stock and the determined sales for a specific end item, the
MPS organizer has the capacity to meet the projected demand of the client by changing the
corporations production for the estimated perspective. This computation has the tendency to
become more difficult in a multi-product situation where assumption errors and capacity limits
can add to the ease of the planning procedure. By make use of the Realcos situation data being
furnished, the below MPS symbolizes Breadmaster product line.

On-Hand Inventory
Realco Breadmaker
Week

REALCO BREADMASTER PRODUCTION SCHEDULE


7,000
1

2
20,00

Anticipated Demand

20,000

0 20,000
23,00

Booked Orders
Expected Ending Inventory
Master Production Schedule
Available to Promise

23,500
23,500
40,000
500

0 21,500
500 19,000
40,000
3,450

4
20,00

0 20,000
15,05

6
20,00

0 20,000 20,000

0 13,600 11,500 5,400


-1,000 19,000 -1,000 19,000
40,000
40,000
14,900
32,800

After reading Realcos MPS, we found out that the Breadmasters expected Ending
Inventory (EI) and ATP numbers demonstrate 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 weeks four, five and eight that the
Breadmasters EI has a negative result. In any case, we can foresee the ATP by using 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

1,800
-1,000

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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) Making this a main priority, Mr. Chang might as well continue to
oversee all booked orders and as time moves forward recognize bringing down the
Breadmasters expected order to go with the companys genuine demands. At that point, direct a
matching decrease in production to be proportional with the latest estimated demand. As a
substitute, Realcos marketing group can discover an efficient technique of producing sales, for
example, bringing down costs. On the basis of the ATPs increasing 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 increase scheduled
orders for the periods later in the anticipating horizon. If however, the scheduled orders remain
steady with weeks one through three, there should be an adjustment to the production in order to
assure the demands that will be needed.
Jacks strategy to making a guarantee to orders to Realcos clients has historically
confirmed to be resourceful but additionally comes at an expense in probable surplus stock and
danger of inadequate assets. Large quantity stock translates to an increase in association stock
holding costs, while lacking assets can cause clients to wait for production in order to draw
alongside to existing commitments. These clients may remove their orders and take business
somewhere if Realco does not have the capacity to deliver by the guaranteed date. Assessing
Realcos 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.

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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 increase 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 deliveries.
In any type of industry worldwide, status and word of mouth is everything. It may take
several years to obtain a solid reputation and only a instant to lose it. Recognizing an order and
then neglecting to deliver as guaranteed reflects negatively on the accumulation and incapacitate
any faith and report previously negative. Dependent 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.

On-Hand Inventory
Realco Breadmaker
Week
Anticipated Demand
Booked Orders

7,000
1
20,000
23,500

2
20,000
23,000

3
20,000
21,500

4
20,000
15,050

5
20,000
13,600

6
20,000
11,500

7
20,000
5,400

8
20,000
1,800

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Expected Ending
Inventory
Master Production
Schedule
Available to Promise

3,500

500

-1,000

-1,000

-1,000

-1,000

-1,000

-1,000

20,000
3,500

20,000
500

20,000
-1,000

20,000
3,950

20,000
5,400

20,000
7,500

20,000
13,600

20,000
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. Weeks three, five, and seven now shows a
negative expected EI, on the other hand as with the first ever MPS, this is because of the
projected demand for weeks four through eight staying reliably higher than the scheduled orders.
While the expected EI shows a negative quantity balance for weeks three thru eight, starting on
week four, the ATP numbers continue to rise as the scheduled demands are much lesser than
projected demands. If Mr. Chang persists to experience scheduled demands as observed in
weeks one thru three, Realco may as well recognize expanding Breadmaster production and
future projected requests to guarantee sufficient assets are accessible to meet client demands.

The advantages of the Japanese automakers where known for the quality of all their
automotive products such as Toyota, Honda, Nissan, and Mazda for the efficiency of their
streamlined manufacturing and supply process in the automotive industry. The disadvantages
where they did not have a contingency plan. Cause a lot of the major plants to close down in the
United States due to lacking parts for production lines.
In todays industry, the Lean philosophy on the other hand is more than a statement, a
course of action statement, or a few tools and methods. It is an endless chase for providing with

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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 systems capability to meet client
demand.(Plenert, 2008) Toyotas concentration on quality is positively reliable 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 theres
merely small to fall back upon once quality blunders happen, making the chase of zero defects
important to lean. Motivated for perfection is an essential part of a lean supply network.(Trent,
2008), Bozarth tells us the story of Toyotas mission to improve their quality. Beginning from
the establishing fathers in the 1930s to the current day, Toyota distinguishes that it is primary to
demand brilliance in all stages of the growth, whether it is procedures, high tech equipment, or
educated, knowledgeable staff. While slipping a small piece with the expansion of the operations
to the U.S. also a loss of important personnel because of competition, Toyota recognized substandard procedures and problems and has engaged corrective activities to solve the issues.
The Japanese can improve on their fool proof plan by just outsourcing to a more stable
country and open up more plants in the highest consumer of their products. This would also give
them a even stronger foot hold on the industry. , the organizers turned away from the
classrooms, favoring to train American shop-floor directors and hourly members through
straightforwardly attacking problems.(Bozarth, 2008) 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

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establish it as a challenge to substitute these subject matter specialists in the U.S. It was just
through Toyotas emergency activities were they able to alleviate the quality downfall and start
the road to recuperation. I believe that the incident that happen in Japan is an eye opener and
gave the whole industry something to look at and better prepare or do their planning a little
closer on the location that they decide to do business in.

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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.proxylibrary.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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