Capacity Measures & Production Planning - Assignment Example

Cake Parlor Capa Measures & Production Planning Part A a. Limiting Bottlenecks & Slack Elements: By using the 9-steps process given below, one shift of eight hours (8AM to 4PM) can produce 2000 Kg of cakes in a day. The limiting bottlenecks (12 - points stars): Problems with the quality and quantity of the raw materials (Step1) Inapropriate measuring of raw materials (Step2) Inadequate mixing of ingredients (Step3) Inadequate beating of mixture (Step4) Problems of oven temperature (under/overheating) (Step 6) Problems in icing and the time required (Step8) Staff problem: Unplanned leave by staff Slack elements/Excess capacity (8-points star): Baking of material upto 2000 Kg can be carried out in a single batch in the oven, in one hour (Step-6). The excess capacity of oven is best utilized by speeding up of the other prcesses by starting several stations. b. ‘Present Capacity’ and ‘Anticipated Demand’ (over the next year): Present Capacity: Current demand and supply is about 1500 – 2000 Kg of cakes per day. The demand fluctuates from Monday to Sunday. Peak capacity is reached on Saturdays and Sundays. (Cakes freshness being very important, any batch produced must be sold out within 24 hours of its production). During the period November to January the demand almost doubles due to celebrations, Christmas and New Year. Daily production is planned at 1500 Kg. On Saturdays and Sundays the extra demand of 500 Kg is met from buffer stock of product (within 24 hour fresh stock) and extra production. In the months of November to January, production is upscaled by additing more stations at different steps Operating one eight-hour shift (8AM to 4 PM), the firm can produce 2000 Kg of Cakes. On a given day the entire process is a linear 13 Hour process (2+1+2+2+1+1+2+2=13Hours). The process time is reduced by starting multiple stations at some steps to reduce the overall time duration: Step 2: Measuring of Ingredients: Simultanoeus measuring at three stations to reduce time to 120/3= 40 minutes Step 3: Mixing of Ingredients in ‘Mixer’: Simultaneous mixing at two stations to reduce time to 60/2=30 minutes Step 4: Beating of Mixer in machine: 2000 Kg/120 minutes (2 Hours) Step 5:Moulding of material in moulds: Simultaneous moulding at three stations 120/3= 40 minutes Step 6: Baking in Oven: 2000 Kg material per 120 minutes (2 Hours) Step 7: Cooling of Baked Cakes: Step 8: Icing & Decoration: Simultaneous icing and decoration at four stations to reduce time to 120/4=30 minutes Step 9: Packaging : Simultaneous packaging at two stations to reduce time to 120/2=60 minutes or 1 hour By dividing process steps at several stations total time reduced from 13 Hours to 7 Hours and 20 minutes (For 8 Hour shift). Anticipated demand over next year: At the expected yearly increase of 20 %, the routine demand will range between 1725-2300 Kg of Cakes per day. At the weak ends, the demand is expected to touch 2300 Kg. During the period November to January the demand is expected to double due to celebrations, Christmas and New Year. c. Capacity Balance: Cake is an item of daily use in homes, offices, and during celebrations. Its demand increases on weak ends and during the festive season from November to January. First and foremst it is imprtant to meet the increased demand on weak ends. This is done by increasing regular production from average of about 1500 Kg of cakes during Monday-Friday and by maintaining a buffer stock of extra 500 Kg of cakes (not older than 24 hour old stock) of different types. The stock is build out of leftover cakes from sales (not older than 24 hour). 2. Demand Fluctuation: a. Uniform 50 % increase in demand over 1 year period: When the demand just doubles, the production is doubled by the following means: The time left out of 8-Hour shift (8 Hours- 7Hours 20 Minutes = 40 minutes) is utilized to pre-process ingredients using Step-2 and Step-3 and keep the material ready for Step-4. This saves 70 minutes of normal days [3 stations for Step-1(120/3=40 minutes) and 2 steps of Step-2 (60/2=30 minutes). Total time saved for a working day: 70 minutes. Thus, ten days buffer stock of pre-processed material is maintained. Step-4: Beating of mixture: It is carried out using two repeats of 2000 Kg of material / 2-Hours. Total 4 Hours. All other steps (Steps 5-9) are carried out by doubling capacity by having extra stations. Help is taken by engaging students from schools/colleges. b. Uniform 50 % decrease in demand over 1 year period: When the demand is decreased, the production is reduced by the follwing measures: All existing stock of pre-processed material will be consumed on normal days, and no further stock will be built-up. No. of stations will be reduced to keep within 8-Hour shift. Preferred policy is not to lay off employees. Instead, students intake will be stopped. Part B: 1. Production planning a. Modulating capacity: The capacity is modulated at weak ends as well as to meet the doubled demands during the period of November-January. This is achieved by several approached: By pre-planning and building buffer stocks of pre-processed materials By adding new stations for processes By hiring extra help by engaging students b. Inventory buffers: This is achieved by advance purchasing of raw ingredients, quality checed, and preprocessed materials By stocking pre-processed materials after processing Step-2 and Step-3 Depending upon the demands, inventory buffers are increased or decreased c. Managing Demand: Depending upon demand, extra stations are added (in case of increased demand) or removed (in case of decreased demand) 2. Workers Information Requirements (Inputs & outputs): Two-way information flow between workers and managers is essential for the enterprise success. Orders from customers are received and entered into order book. Vital information from last week average sales are also used to decide the production for the next day. a. Information inputs: It is essential workers are aware of the basics of the required laws regarding the safety and quality issues concernmed with food products. Hygiene and food safety issues, and required dress and safety codes workers are required to follow. Production schedules, number of stations working in a step, and their targets. Their awareness and training on a particular issue concerning ingredients, process, production, qu(Cakes freshness being very important, any batch produced must be sold out within 24 hours of its production). antity, quality etc. Speed of production and expediting instructions b. Outputs: Workers are required to immediately report to management about any issue related to quantity and quality of ingredients, or finished cakes Any break-up or malfunctioning of machinery and equipment on production floor Completion of tasks in time, or any difficulty in reaching the target Productivity statistics 3. Firms resources a. Technology: The firm has several processes which are controlled by some or the other technologies. These technological resources help speed up the process of production with precision, accuracy, and help maintain quality of the product made. Some of the technologies used and their importance is covered below: Electricity is first and foremost technlogical input to make production easier, cheaper, and time-targetted. Automated weighing machines are useful to weigh and measure ingredients with speed and accuracy The ‘Mixer’ used to mix all ingredients maes the task f uniform mixing of ingredients in a time-targetted manner The ‘Beating’ machine is used to beat the mixture of flour, dry fruits, egg contents and water in a time targetted manner. This greatly helps to achieve a uniform mixture for quality Cakes. The Oven is a large capacity thermostatically controlled equipment which can be used to bake 2000 Kg of cakes at a pre-determined temperature. b. Time: Time is a major resource and every fraction of it is to be utilized to achieve productivity at a reasonable cost. The productivity of each and every step is required to be measured in terms of time: Capacity utilization: Amount of work per hour or minute / Capacity to do work per hour or minute Same fraction of time is utilized by starting several stations simultaneously to speed up production. Read More