Focus Plastics Plc - Producer of Moulded Plastic - Essay Example

Focus plastics Plc. Overview: Focus plastics Plc was one of the UK’S longest established producers of moulded plastic articles. Initially started as a small company, developed into a specialized company supplying plastic moulding to variety of industrial customers from different in industry mainly consumer durables toys & Automobiles. Later on company has shifted itself to produce popular household items as the time progresses, popular household items produced by the company, contributed more than 75% of turnover and doubled in 10 years. As in 1993 sales of industrial articles stood at 1510,000 pounds become nil 1995. The household items under brand name ‘focus’ remains almost stagnate i.e. in 1993 it was worth 6056,000 pounds and in 2005 it remains at 6533,000 pound. But the new product range under brand name ‘concept’ comprising storage years, mixing bowls, strainers, salad bowls, towel holders and other kitchen items, sales grown from 3411000 pound in 1997 to 16210,000pound in 2005. In 2005, company started a new product range with brand name ‘concept office’ comprising filing trays, storage boxes and a range of desk items. This latest and new range of products proved very successful at the very first year of its launch and contributed 1320,000 pound in sales. Company has diverted itself completely from its industrials customers. Company has inculcated a reputation for house hold products for its quality in the minds of the consumers’. It has used latest technologies and trained manpower but being in an industry, where entry barriers are low, it faces on inherent threat from smaller manufactures on the pricing front. Company has planed its manufacturing facilities with a process-based layout and having all sorts of injection - moulding machines of various ages from latest Robotic devices to operate manually. At the planning level, scheduling all the machines and maintaining inventory levels as well as utilization of equipments, output rates &scrap rates has to be monitored by the planning manager. In this particular area, company is facing the problem company is also inclined to develop new and innovative products regularly because of the market requirements. Needs and preferences of customers are changing fast and company has to cope up the changing need of its customers. So company is always trying to develop newer products but in the process faces some problems in developing products continuously and timely. Now company is facing a new dilemma that whether it may continue with its product range under brand name ‘Focus’ or to emphasize on the other product ranges namely under brand name ‘concept’ & ‘concept office’ in this situation company has to evaluate its production and operations capacities and to find out the right kind of strategies for production, warehousing and distribution. Problem: In the process of planning and controlling the production, planning manager has experienced certain problems related to scheduling of the different product range; sequence of production for each machine and would faced the problem of proper scheduling due to fluctuating demand of products, seasonal demands and ever changing customer preferences. Scheduling and planning of production has faced the problem. To meet the fluctuating demand, problems to maintain proper inventory, dynamic and frequent schedule changes and longer production time with more wastage created the problem for the company. More number of moulds with large sizes and complex designs increase the change time, and this reduced the effective batch size as well as brought down average utilization. This situation has created the problem for production schedule also. Company has focused on new product development and innovations which needs well panned strategies but due to testing of moulds in the existing production facilities hindered the production schedule and may delay launch of new of new products. In the process of operations, new product trial increases the product cycle time and hence created the problems for the company. All these mentioned problems could be visible in the case study as the planning manager Sandra White observed that “Because our moulds are both large and technically complex, mould changes take around three to four hours, so we decided to plan for minimum runs of six shifts (48 hours) production. The factory is usually not scheduled for weekend production. In the past we would never have run a mould for lese than 15 shifts (one week) and the general reduction in batch size has unfortunately brought down average utilization. But with wider product range of over 1800 SKUS we really have a little choice.” Apart from these problems in product scheduling Planning manager also faced the problem of abrupt or sudden change in the demanding the market. As provided in the case study, planning manager observed that “last Friday, we had to produce a run of 50000 rain forest green pasta strainer because of unexpected demand levels. This involves complete rescheduling, with one extra would change, and a long color, change from green to white with one hours waste production”. Due to dynamic market schedule changes affect utilization, efficiency and scrap rates. Company often gets caught in a stock outs situation. Concept products are much more seasonal as well as fashionable and bound to change faster then other traditional products created problem for the company in matching with the speed of change. This situation has created inventory problems for the company. One of the important problems which have been faced by the company was to develop new product line in almost every year. But the developing and testing new moulds generally takes much more time and because it has to be tested on regular production line it often hinder the normal schedule. It has been viewed in the case ‘study as planning manager put it like. “At the same time I have to schedule production time for new product mould trials; we normally three shifts (24hrs) for testing of each new mould received, and this has to be done on production machines. From my perspective it is often a difficult choice whether to schedule products that are needed urgently or mould trials for new product launches which are equally urgent.” One of the major problems, company is facing the time taken be the process of new product development. The whole process is taking too much time. The process of developing new moulds, time taken to develop new moulds and testing of new moulds on the existing production line often creates a problem for the operators. Operator’s productivity and compensation has been linked with good output. But the hindrances in between production line to test are always in little bit of tension. This situation has been visible as the statement made by the planning manager” the operators are as keen as we are to get the cycle time as fast possible since their bonus payment are based on good output. We make it easy for them by getting the setting right from the outset but I am afraid they don’t all appreciate that. Sometime several operators spend most of a shift involved with normal production set-ups and argue that they could have made more bonus wagers on production. There is always a bit of tension here, but I still believe that we must link wager and output if we are to retain our excellent record of productivity” Methods of problem solving: When looking at the operational problems of the company we also have to look at the various measures available to the company to short out the production problems. Production managers seek to retain attain low production costs, high quality of products, quick response to demand, and the flexibility to produce variety of goods that match customers’ tastes and specifications. These multiple concerns, useful in enhancing a firm’s competitive position and profitability, must be considered in the design of a production system and in determining numerous planning and control decisions. Unfortunately, a factory or an operating system in seldom able to produce optimal results for all criteria simultaneously. Trade-offs must be made. Although the necessity of making trade-offs among multiple conflicting objectives or criteria has been recognized in the literature, few formal methods have been proposed aid a manager in making such trade-offs. Almost all the literature in production &operation managers deals with optimization on a single criterion, whereas nearly all real world decisions involve balancing multiple concerns and criteria. In formulating a manufacturing strategy, trade-offs among cost, Quality, dependability and flexibility must be explicitly considered. These trade-offs determine the unique positioning of a firm within the industry. A company may place a high weight on cost criterion and gear its manufacturing organization and plant to low cost production. Another company may emphasize customization and therefore will choose a flexible process and emphasize flexibility in its production planning methods. Various decision methods have been developed to tackle these multiple criteria decision-making problems. The key objective of all multi criteria methods is to formalize and capture the tradeoffs among criteria of interest. In first class of methods is one in which the decision maker supplies no information during the analysis phase, since the essential information about the decision maker’s trade offs among criteria is not converged, these methods provide only a trade off curve (also called efficient frontiers non dominant solutions or Pareto optimal solutions) among criteria (Philip, 1972; Zeleny, 1974; Evans & Steuer1973). The decision maker can then choose a preferred, point reflecting his or her inherent preferences, from the trade off curve. In the second class of methods, the decision maker is an integral part of the analytical process and based on the information, the method progresses to achieve better solutions, with more information sought from the decision maker as it is needed (Geoffrion, Dyes and Feinberg, 1972; Zonits & Walleniues, 1976). This sequential approach terminates when an acceptable or the most preferred decision is identified. These methods are interactive in nature, as information from the decision makers is essentially for continuing the progress of the methods towards the preferred decision, finally in the third class of methods. The decision, makers is asked to supply complete information about his or her preferences and tradeoffs among criteria; a preference function (utility or value function) is then constructed based on the elicited information (Keeney & Raiffa, 1976; Dyer & Sarin; 1979). Once the preference function is completely function. is completely known. The selection procedure substitutes the preference function for an objective function. Hybrid procedures, which combine the strategies employed in the three classes of methods, have also been developed where the demand is most uncertain and complicated. Gardner and Dannenbring (1981) provided an approach for constructing an efficient frontier for a there criteria inventory problem. Apart from these models mathematical programming approach could be applicable to & product mix decisions, aggregate planning decision and location and distribution decisions when the appropriate criteria functions and the constraints are linear. But in may production. Problems, such as job shop scheduling, assembly line balancing and resource-constrained project scheduling, cannot be easily solved by mathematical programming approaches. This is because, even for single criteria, the size of the problem is too large to be solved in reasonable computational time. Specialized procedures that exploit problem characteristics are needed to solve such problem. Sarin (1980) explained that in some production and operations situations it may be desirable to interrogate the decision maker or quantify his or her preference function for the criteria of interest. The preference function can then be used to evaluate decision alternatives. So an essential feature of the multi criteria methods is that inputs from managers are required to obtain a final solution. With advances in the use of computers and graphic displays, it is quite possible that in the near future systems will be developed that will involve managers in the model formulation and solution for effective multiple criteria problem solving. In all of the activities in the line of material flow from suppliers through fabrication and assembly and culminating in product distribution must be integrated for sensible operations strategy formulation. The six main components of operations strategy are: positioning the productive system; capacity & location decision product and process technology; workforces and job design; strategic implications of operating decisions & suppliers and vertical integration. On the basis of above guidelines focus plastics plc has to formulate its strategies. Production as a part of corporate strategy must be linked to market. A unified strategy that includes the operations function is likely to anticipate obtaining low cost, high quality, product availability and flexibility from its production system. As we know that Focus is in the area of household plastic moulding which is bound to change fast, preferences of customers changes quickly so the forecasting of demand needs detailed study of customers behavior and linking patterns to that production needs could be assessed well before the time. We have to analyze the product and productive system both i.e. product process strategies. As the product develops through its life cycle, the productive system goes through a life cycle of its own, from a job shops system (Process focused to order) when the product is in its initial stages through intermediate stages to a continuous system (Product focused to stock) when the product is demanded in large volume. At present company have processes focused system but now on we need a system having both process focused as well as product focused which provide us the flexibility more adaptable to product variety and high quality production. When we focus on providing high quality and meeting customer’s individual needs, combination between product volume and productive system may be more appropriate probably combined with production to order. Focus plastics plc has to depend on joint strategies. Again it had to focus itself in producing strategy. Skinner (1985) has referred the concept of specialization by a producing facility. Focus plastics plc has to divide its moulding machines according its different product lines. They have to divide some machines/locations for ‘focus ‘brand, another for ‘concept’ and the third one for ‘concept office’. For developing new moulds separate facilities must be laid down. By specializing the production facilities and individual product lines we could achieve economies of scale by assembling all of these diverse of objectives in one huge manufacturing facility managed centrally through common control system. Focus plastics plc has to position i.e. production of products must be in line to market requirements and matching production system. These should be a match between process life cycle and product life cycle. An innovation in production technology is the key to survive in the market for long. But in an industry where customer preferences are changing fast there must be a system where new products will be developed at the same speed. So reducing the product development time will fulfill requirement. A firm that is show to act may be that left out as a result of risk aversion, whereas a firm that acts quickly will achieve a cost advantage through experience and may increase market share, so company has to speed up the product development process through creating new Research & development department with job for collecting the information, preferences and needs of customers and develop moulds accordingly through its won assembly. Company has to adopt advanced process technologies to meet the needs of customers. As required focus plastics plc must invest in R&D heavily in advance process technologies, mailing with advance technology are needed. Finally Operating decisions are not usually thought to be strategic but if company has to be competitive and successful in the market, operating decisions be the part of overall strategic decision making. Now adopting the Japanese operating system consists of JIT (Just-in- time), focus on scrap and quality control and Kanban system etc. may improve the operations of Focus plastics plc. Just-in-time system could be defined as to produce and deliver finished goods just in time to be sold, sub assemblies just in time to be transformed into fabricated parts. Monden (1981) defines JIT as ‘a production system to produce the kind of units needed at the time needed and in the quantities needed’. The basic idea of JIT was originally developed by Toyota Motors Company in Japan. The idea was formalized into a management system when Toyota sought to meet the precise demand of customers for different models and colors of cars with minimum delay. It was originally felt that the use of JIT manufacturing required high volumes and constant demands, it now appears that most aspects of JIT manufacturing are also applicable to low-volume, high variety products. JIT manufacturing in most common terms is the continuous improvement of material flow either a factory or a combination of factories. It has been used to revise factory layout, setup time reduction, pull system implementation and better coordination with suppliers. Relationship with suppliers and purchasing strategy basically reduces inventory cost drastically. For Focus plastics plc inventory cost has increased almost 10 times between 1993 and 2005. If the relationship and vertical integration will be continuously be formulated as part of operation strategy lower cost, quality, product availability and flexibility could be achieved by focus plastics plc. Finally effective formulating and implementation of operations strategy could mitigate the problem of production & operations in Focus plastics etc. References: 1. Dyer, J. S. and R. K. Sarin, (1979), Measurable multiatrribute value functions, Operations research, 27, pp. 810-822. 2. Evans, J. P. and R. E. Steuer, (1973), A revised simplex method for linear multiple objective programs, Mathematical Programming, 5, pp. 54-72. 3. Gardner, E. S. and D.G. Dannenbring, (1979), Using optimal policy surfaces to analyze aggregate inventory tradeoffs, Management Science, 25(8), August, pp. 709-720. 4. Geoffrion, A., J.S. Dyer and A. Feinberg, (1972), an interactive approach for multicriterion optimization, with an application to the operation of an academic department, Management Science 19, pp. 367-368. 5. Keeney, R.L. and H. Raiffa, (1976), Decision with multiple objectives: performance and value tradeoffs, Wiely, New York. 6. Monden, Y. (1981), “Adaptable Kanban System Helps Toyota Maintain Just-in-time production”, Industrial Engineering, Vol. 13, no. 5, Pp. 29-46. 7. Philip, J. (1972), Algorithms for the vector maximization problem, Mathematical Programming, 2, pp. 207-229. 8. Sarin, R.K. (1980), Ranking of multiattribute alternatives and an application to coal power plant siting, in multiple criteria decision making: theory and applications, G. Fandel and T. Gal (eds.), Springer Verlag, Berlin. 9. Skinner, W. (1985), Manufacturing: the formidable competitive weapon, Wiely, New York. 10. Zeleny, M. (1974), Linear multiobjective programming, Springer Verlag, New York, 11. Zoints, S. and J. Wallenius, (1976), An interactive programming method for solving the multiple criteria problem, Management Science, 22, pp. 652-663. Read More