The Formal Master Schedule - Assignment Example

OPERATIONS MANAGEMENT The paper aims to analyze two case studies: The Realco Breadmaster and Supply Chain Challenges in Post-Earthquake Japan and provide answers for each question under each case study based on a clear understanding of the readings and the relevant scholarly research. The Realco Breadmaster Question 1 A master production schedule is a plan, which is developed by an organization for production, staffing, inventory among other variables. Data information that can be regarded as input while using a master production schedule comprises forecast demand, inventory cost, production cost and also other costs (Bozarth & Handfield, 2012). The output in this context involves information on production amounts as well as the levels of staffing for a given timeframe. The plan can be referred to as cost driven thus implying that its main focus is to meet all the requirements at the least cost probable. A master production schedule for Realco Breadmaker is illustrated below: Demand Management Week 1 Week 2 Week 3 Weekly demand for breadmaker 20,000 20,000 20,000 Working days in a week 6 6 6 MPS demand for breadmaker 3333 3333 3333 Based on my perception, Realco Company should focus on updating the production numbers. This is because according to the available numbers, there is a clear indication that the produce of the breadmakers are way greater compared to the demand that is anticipated. The production accounted for on a weekly basis is 40,000 and the demand that is assumed per week is around 20,000 breadmakers. An adjustment can be made on the production numbers to account for up to 25,000 breadmakers. This is because Jack Jones highest current order is around 23,500 breadmakers. Question 2 The main purpose of the process of demand fulfilment is order promising. Order promising objective is to create a platform of reliable promises with regards to the orders made by customers. The quality of order promising is measured by using delivery performance as well as on time delivery. Jack Jones uses the batch order promising as his main approach. Under batch order promising, the orders of the customers are keyed into the sales transaction system with no generation of a promise. The aspect of order promising is that it is generated at specific periods, and in Jack’s case it is only once a week. Thus, Jack has entered all the details of the customers’ order for the shipments that have been promised on a weekly basis. One advantage of using Jack’s approach is that it is quite cost effective. The valid reason for this is because it is cheaper to produce a batch of a specific product than production of a single order. The most common disadvantage of using this approach is that it may lead to over production, in that the production may be more than what is on demand. Additionally, batch order promising may encourage loss of customers as most of their preferences and tastes may not be met (Bundy, 1999). A formal master scheduling will definitely improve the process through keeping accountability and control of the whole production, as well as shipment promising. Moreover, it can assist in booking future deliveries and protecting lead time. The formal master schedule simply controls the manufacturing process. However, the customer demand not controlled. With the adoption of the formal master scheduling one of the necessary organizational changes that will be addressed is managerial changes. The company will thus need to hire a professional master scheduler who will be in charge of the entire process. Other changes that will be necessary involve technological changes like installing master scheduling software. Question 3 The worst thing that can happen is to accept an order and then fail to deliver. It is much better to refuse a customer’s order upfront due to unavailability of units. Based on what has been stated earlier, master scheduling simply controls the manufacturing process and not the customer demand. Therefore, it implies that orders can only be accepted if units are available. Master scheduling mainly assists a company to be aware of the number of products or units that are available for sale. Having knowledge on the available units in a company guides the acceptance and placement process. Therefore, it is more appropriate to refuse a customer’s orders based on having unavailable units. Moreover, accepting a customer’s order and failing to deliver may cause loss of customers and even market share as a result of false promises. Loyal customers are attracted to companies that are true to their word. Thus, accepting and then failing to deliver an order may jeopardise the trust between the customers and company. Question 4 Inventory consists of the goods and materials that a business has for sale. This stage is quite critical for businesses that tend to rely more on goods and materials. If the inventory level of a business goes down, the business may fall short of the needed products and end up losing the possible sales. When the inventory level goes high, the business may face spoiling, storage problems and depreciation (Blackstone & Cox, 2002). The production of 20,000 breadmakers rather than 40,000 each week by Realco Company will produce a low inventory level. This indicates that Realco Company may run out of breadmakers and thus there will be loss of potential sales and customers. For example, the current orders according to Jack Jones in a week amount to 23,500. Thus, a weekly a production of 20,000 breadmakers indicates that there will be a deficit of 3,500 breadmakers. Therefore, Realco Company will end up losing 3,500 breadmakers if they reduce their weekly production to 20,000. Supply Chain Challenges in Post-Earthquake Japan Question 1 The Japanese auto industry is very well known for embracing the process of “just in time” (JIT) or the Lean operations in its manufacturing system. These strategies have enabled the supply chain to be consistent in profits by ensuring that a lot of capital is gained from the sales of the products. Thus, the supply chain of the auto industry before the March 11 earthquake and tsunami managed to sustain the profits and sales of the industry based on these approaches. Many producers in the auto industry have benefited a lot from the previous supply chain. To start with a well-functioning just in time systems only kept the inventory that was needed. This implies that excess inventory was regarded as a waste. Another advantage of the supply chain was that significant economies of scale were perceived because the “just in time approach” focused on reducing the number of the suppliers that were available for each component. Based on the benefits brought by this approach, some firms resulted in reducing the number of their suppliers to single sources. However, the main disadvantage that was faced based on the previous supply chain is the fact that if a critical supplier was not able to produce materials then that meant that the entire system would breakdown. The supply chain did not focus on protecting the shortage of parts in case of the occurrence of any calamity. Thus, this was the main disadvantage concerning the shortage of parts in the future. Question 2 Toyota’s plan for a foolproof supply chain is consistent with Lean production philosophy. It is well noted that Lean philosophy tends to provide various manufacturing process (Womack & Jones, 2003). Toyota’s foolproof supply chain will focus on opening up various new options for the manufacturing of parts to be able to reduce the reliance on using a single source. This means that in accordance to the Lean philosophy, there will be various manufacturing process in different sources. Nevertheless, it is quite evident that there are some specific behavioural aspects of most companies’ production system that make the Lean Philosophy incomplete. With regards to quality, it is usually challenging for a company to adhere to the concept of Lean philosophy without the need to adopt a strong quality focus. A Lean philosophy that is true in this context consists of total quality that is defined based on two aspects: systems and culture (Black, 2008). Toyota’s foolproof plan will involve seeking suppliers of high end parts or parts, which are sourced from only one location to keep larger inventories. Toyota will also focus on making each global region independent of each other based on the supply of the parts. With emphasis on culture, the foolproof plan focuses on leadership with a strong passion of being precise in fostering attitudes that will influence the products positively. Additionally, Lean philosophy aims at ensuring that all the employees are well motivated to give out effective output and cost in exchange of getting good quality. Policies management procedures and behavior need to be in support of the mentioned culture with no banner of slogans or exhortations. Assumptions have been made owing to the fact that poor quality is simply a waste and, therefore, it must be improved to be at least perfect by keeping up with a consistent improvement that includes the empowering of the employees before the production process begins. Therefore, with regards to Toyota’s foolproof supply chain there are a lot of aspects of the Lean philosophy that are adhered to thus making it to be very well consistent. Question 3 Toyota and other competitors in the auto industry can improve the plan to create a foolproof supply chain by linking their supply chain to new product programs and also by effectively managing materials and capacities across their global network. To start with, linking the supply chain with new programs will focus more on addressing the challenge that results from managing the total company’s cost. This means managing the company’s cost across operations, products as well as sales. This strategy will aid in curbing the challenges brought up by production schedules that are regarded as unreliable. Another way to improve the foolproof supply chain will involve managing materials and the capacities across the global network. Toyota will need to analyze its foolproof supply chain plan by ensuring that the plan can be accommodated by its financial plan. With regards to this assumption, it is expected that Toyota will venture more into the global market to analyze the demand and hence be able to make decisions that will impact much better on capacity management, profitable allocation of the vehicles, sourcing and the option content. These two strategies will further aid the Toyota plan of a foolproof supply chain to hold true to its goals. Question 4 Toyota’s plan will definitely have a positive impact on the way it handles its relationship management in its supply chain. First of all, the plan focuses on making every global region to be independent from the others. This will prevent any occurrence of supply chain disruption in one region. Therefore, Toyota’s plan will focus more on creating strong partnership with each of the global regions. This will assist Toyota in identifying potential cross sales of all the products. The three strategies that Toyota will take to curb the supply chain risks will enable the company to maintain a continuous level of commitment with its audience that is its customers and also its suppliers. Therefore, Toyota’s plan will have a positive impact on the way it handles its relationship management. In conclusion, it is quite clear that the paper has analysed both case studies by responding to all the specific questions. References Bozarth, C.C., & Handfield, R.B. (2012). Introduction to operations and supply chain management, 3rd Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall. Bundy, W. (1991). Miller SQA: Leveraging Technology for Speed and Reliability. Supply Chain Management Review, 3(2), pp62-69. Blackstone, J.H., & Cox, J.F. (2002). APICS Dictionary (10th Ed). Falls Church, VA: APICS. Black, J.R. (2008). Lean production: Implementing a world class system. New York, NY: Industrial Press. Womack, J., & Jones, D. (2003). Lean Thinking: Banish Waste and Create Wealth in your corporation. New York: Free Press. Read More