Manufacturing and Operations Management - Essay Example

?Manufacturing and Operations Management Introduction Promanager PLC engaged in manufacturing range of products for oil and gas industry. However, the company is losing on its manufacturing planning as well as control in terms of failure in delivering the product to customer on time. Figure 1 shows the manufacturing process currently used by Promanager PLC that is not delivering the required results. The order enters the planner and master production schedule. The order then moves to the manufacturing phase where it is entered into the inventory management system where the required inventory is mentioned to the PCB. Simultaneously, spare parts are manufactured in the batch and stored in the warehouse until required by the final assembly for product 1 and 2. The finished product is stored in the warehouse until delivered to the customer. This report will identify the strategy (i.e. MRP, JIP and Hybrid) to be employed by Promanager PLC to resolve the issue. Also, in the end, the report will provide detailed set of recommendations to improve the overall manufacturing performance of Promanager PLC. Figure 1: Current Manufacturing Process of Promanager PLC Manufacturing Planning and Control Strategy Recommendation and Rationale The manufacturing forms the most significant aspect for a manufacturing company and it forms as its competitive advantage or a reason for failure. Therefore, a strong and effective management tool is required to achieve the required success rate. However, in order to recommend a strategy, the first step is to identify the problems that the existing system is facing. Promanager PLC existing production mechanism is facing the following significant problems: (1) The Master production schedule makes poor forecasts for individual order specifications. (2) The throughput time of the product is more than the standard 3 weeks time. (3) Response time to customers should be 1 week. (4) Discrepancies in data of inventory management system and inventory of materials. (5) High defect rate for finished products. (6) High level of Raw Material, Work-in-Progress and Finished Goods stock due to imbalance between supply and demand time and materials. There are three types of manufacturing planning and control strategies, namely: material requirements planning (MRP), just-in-time (JIT) and hybrid. Benton and Shin (1997) argued that MRP and JIT directs the significant aspects of a material flow in terms of its planning and controlling. Zhao, Zhou, Luo and Dai (2011) and Mahapatra, Pal and Narasimhan (2011) postulated that JIT reduces set up time, improves the flow of goods from warehouse to the shelves, makes efficient use of multi-skilled employees, synchronizes the production schedule and hours worked, improves relationships with supplier and throughout the day supplies comes on a regular basis. The JIT system can be implemented in seven steps that can be customized according to the needs of the production cycle. These are: (1) Design flow process, (2) Total Quality System, (3) Stabilize Schedule, (4) Kanbul Pull System, (5) Work with Vendors, (6) Further reduce inventory in other areas, and (7) Improve product design. On the other hand, MRP is a special mechanism to plan as well as control the production processes. The primary objectives of introducing MRP in a production process is to guarantee availability of materials fro the production and at the same time ensure that finished products are ready to be delivered to customers. Furthermore, it ensures the minimum possible levels of inventory (i.e. material and finished products) to stay in the stores. MRP also helps in planning the activities of manufacturing, purchasing and manages the delivery schedules. In the case of Promanager PLC, JIT or MRP can not resolve the problems that it is facing independently. As, JITwill help to resolve the problem numbers 2, 4 and 5. Whereas, MRP is a unique management tool that only focuses on the manufacturing material, purchasing and delivery activities. Therefore, it can resolve the problem numbers 1, 3 and 6 in a smooth manner. This collective method of using both techniques forms a hybrid system which ensures that both systems are employed in the production cycle to ensure achievement of organizational goals in a perfect manner. Mahaptra, Pal and Narasimhan (2011) postulated that re-manufacturing provides considerable opportunity to the organization in the form of recovering value from the products that have been used and are lost to the organization. The hybrid (re) manufacturing is a process where the products are manufactured and the used products are re-manufactured at the same time. Hybrid management tool is recommendable for Promanager PLC as it provides a manufacturing and (re) manufacturing of the products simultaneously apart from a perfect blend of JIT and MRP attributes to resolve all problems Promanager PLC is facing. As a result, the large number of defective products will be simultaneously (re) manufactured and as a result, enter into the finished goods without costing anything to the manufacturer. Figure 2: Material Requirement Planning (MRP) Flow Chart for Promanager PLC Hybrid System Figure 2 shows how MRP system will resolve the problems Promanager PLC is facing. The Master Production Schedule which is a computerized system of Promanager PLC will include all records of the individual orders. It will send message to Materials Handling Planning to plan all the required materials, their quantities and the time when they are required by customers. It will send message to Capacity Requirements Planning which will check the capacity of manufacturing department and see if it is feasible to send the order. If the answer is a No, the system will return to Master Production Schedule to wait and the loop will continue until it finds a Yes that will send the order into Work Orders and then move to Shop Floor Control and to manufacturing finally. In case any purchases are required, the system will send the message to Purchase Orders. From there the purchases will move to inventory and then to manufacturing department. This way, there will be no over burden on the manufacturing department as well as the purchases will be made only when their is requirement for purchases before the Order enters the manufacturing department. Furthermore, there will no excess supply of Raw Material, Work-in-Process and Finished Goods. MRP system will plan and regulate the entire inventory system to ensure that the product will be delivered to the customer within specified time of 3 weeks only. Next comes the implementation of JIT system. The first step to resolve the Promanager PLC’s problem is to redesign the flow by minimizing the lot sizes, balance the capacity of all the workstations, ensure measures to maintain the workstations as preventive measures. Thus, reducing the overall set up time for individual orders and speed up the manufacturing processes. The second step will focus on ensuring that each and every product is free of defects. Using the Total Quality Systems, every step will be monitored and improved right away to ensure that every small step has Zero Defects. The third step will ensure that all the employees are rotated on jobs to make them multi-skilled personnel. Thus, every employee will deliver more and equally to ensure a motivated working environment. The fourth step will ensure that every system is used to its optimal capacity and potential. The fifth step will ensure that purchases are made frequently and on-demand to ensure that there is no lead-time discrepancy. The sixth step will reduce the time of transit of goods from warehouse to inventory and vice versa. The seventh and the last step will ensure that the product manufactured is meeting all the standard configuration or not. In case it is the latter, the system will automatically reject the finished product and send it back for (re) manufacturing where it will enter the first step of manufacturing again. In this way, all the above mentioned problems that Promanager PLC is facing will be solved. Figure 3 shows this process. Figure 3: Promanager PLC Production Cycle using Hybrid System Conclusion Promanager PLC should adopt the hybrid management tool in order to resolve its customer delivery time and to remain within the business. The MRP will manage the Inventory planning, purchasing and delivery activities whereas, JIT will manage the entire manufacturing process to ensure that each and every product is of highest quality. This way the customers will receive the products well before time and of excellent quality that keeps them loyal to Promanager PLC. Integrated Set of Recommendations The following set of recommendations will assist the Promanager PLC to improve its manufacturing aspect: 1) Customized Product Lead-Times Weng and Fujimura (2011) argued that high performance in product manufacturing requires integration with customer-oriented business practices to achieve the improved performance in the overall business system. The authors proposed a joint system where the methods to control the production were designed with their focus shifted on customers alone. As a result, the lead time policy will be designed to deliver increased performance in manufacturing and customer service. This strategy can be used for the hybrid flow shops at Promanager PLC to handle manufacturing orders dynamically. This method outperforms all the existing methods like just-in-time (JIT) to complete a job based on product lead times that are customized. Weng and Fujimura (2011) argued that the designed distributed feedback and decision-making functions provide better and most effective handling of orders to ensure timely customer services and completion of products. 2) Resolving Integrity of Data Issue In order to resolve the problem of mismatch of information entered into the inventory management system, the manual check is recommendable as it eliminates this problem from its root. 3) Cooperative Production Strategy Gnoni, Iavagnilio, Mossa, Mummolo and Leva (2003) postulated that hybrid modelling can help in resolving the lot sizing and scheduling problem (LSSP) in a manufacturing system that faces constraints in capacity, uncertain period and product demand. The hybrid model when applied to a supply chain in the automotive industry provided promising results. However, the approach can only be useful for cooperative production strategy decision making instead of competitive production strategy. At Promanager PLC, this approach can also be used along with the JIT to ensure that the lot sizing is considerably reduced. References Benton, WC & Shin, H 1998, "Manufacturing planning and control: The evolution of MRP and JIT integration, European Journal of Operational Research, Vol. 110, Iss. 3, Pp. 411-440. Accessed 6 December 2011. Available at: http://www.sciencedirect.com/science/article/pii/S0377221798000800 Gnoni, MG, Iavagnillo, R, Mossa, G, Mummolo, G & Leva, AD 2003, "Production planning of a multi-site manufacturing system by hybrid modelling: A case study from the automotive industry, International Journal of Production Economics, Vol. 85, No. 2, Pp. 251-262. Accessed 6 December 2011. Available at: http://www.sciencedirect.com/science/article/pii/S0925527303001130 Matapatra, S, Pal, R & Narsimhan, R 2011, "Hybrid (re)manufacturing: manufacturing and operational implications", International Journal of Production Research. Accessed 6 December 2011. Available at: http://www.tandfonline.com/doi/abs/10.1080/00207543.2011.588615 Weng, W & Fujimura, S 2011, "Control methods for dynamic time-based manufacturing under customized product lead times", European Journal of Operational Research. Accessed 6 December 2011. Available at: http://www.sciencedirect.com/science/article/pii/S0377221711009337 Zhao, G, Zhou, L-y, Luo, J-f & Dai, Q 2011, "Research on inventory control in hybrid manufacturing/re-manufacturing systems", Computer Science and Service System International Conference, Pp. 3475-3478. Accessed 6 December 2011. Available at: http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=5972206 Read More