Toon Air Manfacturing Quality System - Case Study Example

Summary Toon air, one among the successful airlines in U.K has been facing a tough competition due to the upcoming new airlines which provide the same facilities at a much lower cost. To control and manage the situation the company has decided to adopt new strategies and implement new systems. In order to cut the costs and tide over the situation the company has decided to concentrate on the modification and development of the purchase and material management. As a materials manager I have the responsibility of managing the department. Automated inventory system must be implemented to manage the stock, purchase and reorder of the spare parts. The changes in the departments will bring about a positive impact and this will help the company in succeeding in the airline industry. By changing the supply routines and the supplier, material management will become easier. Enterprise Resource Planning is one among the best ways to integrate the departments in the company. This will help in decision making and further improvement of the company. Introduction Toon Air has been operating the airlines for many years. They have been successful in this field with no specific competitors. The recent development in the airline industry has led to a situation where many other airlines operate at a lower cost. This has affected the development and growth of Toon air. This has proved to be a great disadvantage. To overcome this situation Toon Air has to adopt new strategies and plan accordingly so that the current situation can be improved. This will enable the employees and the customers to have a problem free environment. Make suggestions for the improvement of the supply of spares to the users The spare parts are procured regularly form some of the manufacturers. Any purchased material has to be stored in a warehouse and it has to be maintained properly, failing which may leads to unforeseen circumstances. These spares have been stored at a warehouse which is located at a distance of 30 miles from the airport. Purchasing is the major event in the management of supply of spares. The main problem is the delay in the supply of parts. Whenever a part is required they must be readily available to the users and engineers. There should not be any time delay as this in turn affects the flight timings. This will result in an unexpected loss to the company since the aircrafts are kept at the airport. They manage the situation temporarily by flying the substitute planes. This is not a permanent solution. This may prove to be a problem when several planes are idle at the airport. The spares are supplied to the maintenance engineers as and when needed. As the people in the purchase department do not have proper authority to decide and procure spares, this delays the process of purchase and supply of spares to the engineers. Toon Air purchases the spares from a reliable supplier. The cost of the spares is costly when compared to the other suppliers. They must select a different supplier who can supply the parts at a much lesser rate. This will be of more help to the company as this amount can be used for some other purpose. If the supplier is changed they can procure the spares immediately. (Hitomi, 1996).They must select the supplier who can deliver the spares immediately after the order is placed. This will reduce the delay in the supply of the parts. This in turn will reduce the idle time of the aircrafts. Since the spares are delivered immediately, the substitute planes can be used for any emergency situation alone. There has been a practice of engineers getting the spares directly from the suppliers. They make an order to the supplier and they get the spares delivered as and when they require. This may be of help only in certain cases. To avoid such a situation, the company must change to a different supplier so that the spares are procured whenever needed. The company must appoint some responsible person who can handle the purchase department in an efficient way. This will ensure that the department does not face a tough time. The capable employees have to take care of the purchase of spares and storing them in the warehouse.(Hitomi 1996). Each time a spare part is needed, the corresponding engineer must make a request to the spare parts maintenance department. If the requested part is available in the warehouse, they have to be transferred to the department immediately. If the part is not available, they must make an order to the corresponding supplier and get the parts. To avoid a state where the part is not available, the company must take care of the stock. They just maintain the stock details and the spares must be ordered before it gets over. A reorder level must be assigned and if the count of spare reaches the reorder level, they must be ordered. Intimation should be sent to the supplier regarding the required spares and the quantity required. Once the supplier sends the goods, company must record the stock level. They must be transferred to the warehouse and maintained properly. The major improvement must be made in the supply of spares to the engineers. If an engineer finds a fault in the aircraft and requires a spare part, he must request the department and the company must ensure that the spare part reaches the engineer immediately. To avoid further delay they must maintain a record that shows the parts that have been delivered to the engineer. This can definitely improve the supply of spare parts to the user. Identify and recommend realistic improved inventory control systems that will reduce stock and improve efficiency Inventory control systems are an important part of a company. This system will manage and control the stock and its operations. These systems can be implemented in the company to reduce the human work and to improve the efficiency in maintaining the inventory. Since the level of investment in the inventory is very high, the company must select a strategy that will make use of this investment. (Hoyle 2000).This investment must be used to procure spare parts that are necessary and the parts that are common for all the aircrafts. The parts that are unique should be purchased in a lesser quantity. This will reduce the wastage of those parts. As the design and technical specifications of the spare parts keep changing, the parts should not be procured in large quantities. They should be purchased according to the requirement. This will help in minimizing the parts becoming obsolete. If the parts are procured in large numbers, there is a chance of those parts getting stored in the warehouse without any proper use. As these parts cannot be returned back to the supplier, they become a waste after sometime. Thus the spare parts must be purchased by checking with the inventory system. Inventory control system must be designed in such a way that it satisfies the requirements of the company. Since the company purchases the spare parts at a regular basis, an efficient inventory system is necessary. This system should manage the stock and it should indicate the reorder level at predefined intervals. The reorder interval must be defined in the system based on the parts and the demand for the particular part. Inventory system must have a separate section for each part and the complete information regarding the part and its usage must be specified. This will assist the person maintaining the inventory system. He can produce the relevant details pertaining to a particular part so that the engineers can select the required part. Some parts may be needed frequently and they must be available in plenty. By procuring them in large quantities, the company can avoid the time delay in purchasing them when it is required immediately. Efficiency of the system is the major criteria and the inventory system must be efficient enough to manage the current situation of the company. In the present scenario the pattern of demand is not smooth. Due to this reason the company has faced situation where they have gone out of stock. This has occurred due to the poor maintenance of the inventory. The inventory system must be effective and it should be designed in such a way that in no situation the company runs out of stock. The inventory system must check the demand for each and every spare part at regular intervals. This will improve the efficiency of the system since each time the demand for a particular part increases; the company can make a purchase of that part. Thus the company can be sure of not getting into problems. (Hitomi 1996).This method decreases the stock and this in turn will decrease the amount of money spent on maintaining the unused stocks. If a part is not used, it gets stocked up in the warehouse. To maintain these parts a separate person has to be appointed and gradually these parts become a waste after certain period of time. The company has the additional responsibility of disposing these stocks. These can be avoided if an inventory system that is more efficient is implemented. The orders with high value and low value must be differentiated. The importance for these orders must be given depending on the value of the orders. If a high value order is placed, the inventory system must recognize and place the orders accordingly. This will ensure that the orders are placed based on their value rather than the quantity required. This in turn will reduce the cost that was being wasted in procuring unwanted spare parts. The inventory system that the company was using is not fully developed by the e-procurement. The purchase, order and the stock should be maintained by a single inventory management system. This system must store the details regarding the purchase, the order and the quantity information and the stock information. The details must be updated each time a purchase is made and this will help in the future for the purpose of reference. In the past the company used to pass on the remaining spares to the customers. Due to the increasing competition the company could not continue this and hence it has to find a way to efficiently manage the stock and spares. Thus the need of a effective system becomes necessary. Discuss what enterprise resource planning is and how it could help improve the company's situation. Enterprise Resource Planning Enterprise Resource Planning is a method to integrate the various operations within a company. All the processes are integrated to form a single unit. The ERP systems include several components and it enables the integration of the various departments. As each department maintains a separate database, ERP systems include a common database that can store the information regarding all the departments. These ERP packages integrate all the operations and store the information in a single unified database. ERP systems can be used in any type of organization irrespective of the organization size. It is of more use in large organizations, since they find it difficult to manage their resources. ERP package includes many functions that can enable the organization to perform any type of operations. Every organization will have a system for Payroll and Inventory and thus basic ERP packages include these essential features. The company can select the package to suit their needs. An organization has departments like manufacturing, human resource, packaging and distribution. ERP systems manage the applications of all these departments under a single application. Instead of designing applications for each and every department, a common software application deals with all the functions. There are several advantages of implementing ERP in the company. The system will indicate the operations that take place in all the departments and based on this the inventory system can be operated. With the help of the ERP system the purchase and order can be modified, since it indicates the requirements of each and every department. (Hoyle 2000).The current situation of the company can be improved by implementing the ERP system as it can automate almost all the operations that take place in the organization. The company aims at cutting down the costs and decides to improve the systems in an efficient way. This can be achieved by using enterprise resource planning. If properly planned and implemented, ERP systems will prove to be a success and this will definitely improve the company's situation. As the management has decided to improve the materials and purchase management task easier and to make it more efficient, the corresponding analysis should be done. According to the company's purchase department, the system must be modified. I will make sure the system helps in the betterment of the company. By implementing this system the company can yield a better profit. Recommendations The company is facing a tough competition and any decision must be made with utmost care. The decision must be taken considering the departments and the situation that prevails in the market. After investigating the purchase and materials management departments, I have decided to implement systems that are designed and developed keeping in mind the company's situation. The system must be designed to include all the complexities that the company has faced so far. I would recommend the management to install a complete e-procurement system that takes care of the purchase of spare parts. I would also recommend the company to install the system as soon as possible since any further delay will lead to problems. Another important recommendation is to change the supplier and to select a supplier who can supply the spare parts as and when needed. The supplier must be able to maintain the quality and should deliver the parts at the stipulated time. The inventory system should be implemented to reduce the stock and to improve the efficiency of the purchase department. Conclusion The suggestions and recommendations should be followed and done immediately without further delay. This will certainly improve the company's situation and will make it efficient to compete with the other airlines. By implementing new systems and strategies the company can yield better profits and they can be sure of maintaining their place in the airline industry. In spite of so much competition the company will be able to work well and continue its success in the niche market. They should not follow the methods that they have been following in the past. Since the current trend is changing, the company must incorporate new strategies and systems in order to operate in a effective manner. Reference Hitomi, K., (1996). Manufacturing Systems Engineering: A Unified Approach To Manufacturing. U.S.A: Taylor & Francis Inc. Hoyle, D., (2000). Automotive Quality Systems. U.S.A: Elseiver Publishers. Read More