...KaShawna Davis 4/2/15 PROC 5850 Case Study 1- H. C. Starks H.C. Starck Business Case 1. Why are the lead times so long? There are several rationalities to explicate why the lead times at H.C. Starck, Inc. are indeed long. A diverseness of accounts can be established, in which all were noted by respective members of the H.C. Starck, Inc. team or via illations established by management. To start out, H.C. Starck, Inc. underwent lead times that were longer than anticipated because there was an impression that the manufacturing time was excessively long, although there wasn’t any arduous data rendered to confirm such. As well, Lee Sallade, who was the Director of Operations for H.C. Starck, Inc., conceived that concentrating on lead times was very crucial; concentrating on it exclusively would be a substantial error in all views. Lee Sallade sensed that in addition to ascertaining lead time; the overall cycle time should be calculated for, which may have caused the lead times enduring for such an extensive period of time. Lee Sallade stressed that cycle time and inventory were hugely significant to the company, but both were enormously unmanageable to “keep in line” subsequently H.C. Starck, Inc. deemed such a substantial amount of tantalum inventory. Finally, Lee Sallade sensed that overseeing data was essential to success, and Lee Sallade was worried that many of the operational decisiveness of the company were based on myths or “hear say” and that, “rigorous data collection...
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...EXECUTIVE SUMMARY Barilla SpA, world’s largest manufacturer of pasta based in Italy is experiencing extreme demand variability resulting to operational inefficiency and increased cost. To combat the key issues stated my decision is to implement the Just In Time Distribution (JITD). This new system, contrary to current system Barilla has will eliminate Bullwhip effect and stock outs by having centralized information, there will be data transparency between Barilla and distributors. Distributors will provide actual sales data which will be the basis of forecasting and production thus increasing in efficiency in operation and alleviating stock out among distributors. JITD will lead to improved supplier-customer relationship which in the long run can be perceived as a win-win situation. Internal resistance coming from Sales and Marketing will be resolved by involving the top management and by presenting the benefits of the JITD in figures and by emphasizing that role of Sales team in JITD is of paramount to the implementation. External resistance will be combated by thorough discussion presenting the long term benefits of all parties involved. Implementation of JITD as soon as possible will position Barilla on even stronger pasta producer and will potentially increase growth rate of the company resulting from increased business efficiencies and reduced cost. Barilla can have a pilot run on the DO (Distribuzione Organizzata) where sales representatives functions are dominant, sales...
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...same machines it’s a constant balancing act. Chad also takes his employee hours into consideration because his employees are all specialized in different aspects of the manufacturing process. Chad preforms supplier relationship process duties because he need’s to order specific materials for the customized pieces from his suppliers. In order to Chad to be effective over the long run he must reduce the lead times on both the custom and standard line of furniture. With the increase in volume, Chad finds it difficult to meet the promised delivery dates for both custom and standard line. Increased lead times has had a ripple effect throughout the company. Increased lead times results in added costs such as storage and inapt use of raw materials. Training employees to become more flexible can improve long-term effectiveness. Currently, each employee is specialized at one stations, this could cause a backlog of work incase of high volume in one area or if an employee is out sick. Allowing different employees to work in different areas will reduce lead times. Chad must also worry about expansion in the long run....
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...for fabric and component sourcing for Sport Obermeyer’s production. Materials sourced were cut and sewn either in Raymond Tse’s own “Alpine” factories or in independent subcontractors located in Hong Kong, Macau, and China. Raymond was owner and president of Alpine Ltd., which included skiwear manufacturing plants in Hong Kong as well as a recently established facility in China. Obermeyer would cover 80% of Raymond Tse business. For this case, we will focusing on the skiwear part of the Obermeyer business. It has a current cycle time of 27 months. Considering that what we are selling is short life cycle product with very variable demand. The numbers that practically drives the business mostly comes from the Las Vegas show. Out the 27 months cycle, Obersport has only has 6 months to purchase, produce and deliver the products for winter selling in North America. Obersport is located in the Far East and currently his supplier lead-times is are really long and minimum orders is quite high....
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... Obermeyer Retailers 3 4 Planning Cycle Planning Cycle Cont. • Design begins in February of the year before the garments will appear in stores. • As soon as designs are finalized, samples are produced and shown to retailers during the Las Vegas show. The show is usually held in March. • Concurrently, materials and components are ordered for the initial production order. • Usually receive 80% of the annual order volume the week after Las Vegas show. • During June and July the garments are transported to Obermeyer’s Denver warehouse. This takes approximately six weeks. • Around the end of August, Obermeyer ships orders to retailers. • Products go on sale during September. Peak times are December through January. 5 6 1 Time Line Production Planning (See Table 2-14, p. 68) • Annual production is approximately 200,000 units. • Maximum production capacity available for cutting and sewing is 30,000 units a month. • The minimum...
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...than the average estimated demand. After we analyzed the results of the first couple years, we noticed that the average demand was generally more accurate. This led us to the conclusion that the dynamics of the forecasting team were likely distorting the estimates for the consensus number. There were strong personalities within the team that seemed to sway the opinion of the team members to agree with them, thus lowering the accuracy of the estimation. For the final two years we spent more time looking at the individual opinions of the team and tried to exclude estimates that were exceedingly high or low compared to the rest of the team. This gave us a number that was close to the average estimate of the team and allowed us to make a more accurate forecast. Overall, the consensus forecast was a good tool to use to quickly see whether demand was expected to be high or low. The biggest downside is the lack of accuracy. The average demand was a more accurate tool as long as we took the time to check each individual opinion to see how the number was made up. Our most successful forecasts seemed to come out of a combination of both the consensus and average. Options In general we tried to look at the overall benefits the option...
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...C. Stark Inc. Case 1. Why are the lead times so long? H. C. Stark Inc. invested in the SAP R/3 Enterprise Resource Planning software for the company but, only the finance dept. uses the software while the production, scheduling, shop floor scheduling and raw material orders and are still processed manually. These departments still believe in using the paper method of processing the transmittal of the sales orders from customers to the operations department. This process is longer than incorporating the software to accomplish the same tasks. Starck doesn't make full use of the functions in SAP R/3. In fact, schedule misses were mostly due to equipment failure. Mike from the sales dept stated there was an "informational black hole" where orders go to the mill, but the demand data doesn’t seem to make it back upstream to the melt shop. Production is a 3 step process where scheduling needs to be on point for the final product to be ready and the next batch in line. The sales department enters the customer order date into SAP because the software require it. Sometimes the Sales dept. estimates the order date which can cause inaccurate times that are too far out and then the order is ignored by Operations. 2. How might Starck reduce or affect the lead times? Starck will have to implement the use of SAP software for scheduling, production planning, and more accurate data collection for forecasting to save lead time and resources. The availability of informative...
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...[Sport Obermeyer Case Analysis] | How to plan and forecast in an environment with variable demand and long lead time via the use of speculative vs. reactive capacity | Table of Contents Executive Summary Page Part 1 Executive Summary 3 Issue Identification Part 2 Immediate Issues 4 Part 3 Systemic Issues 4 Environmental & Root Cause Analysis Part 4 Qualitative Analysis 8 Part 5 Quantitative Analysis 9 Alternatives &/or Options Part 6 Alternatives 10 Recommendations Part 7 Recommendation 15 Implementation Part 8 Recommendation Implementation Plan 17 Monitor & Control Part 9 Monitor and Control 19 Conclusion Part 10 Conclusion 20 Part 1: Executive Summary Sport Obermeyer was founded by Klaus Obermeyer, with the intentions to provide the U.S skier market with the same stylish clothing found in Germany. Sport Obermeyer eventually developed into one of the major competitors in the U.S skiwear market. The production process for Sport Obermeyer’s product lines began a full year and a half before the product actually hits the retail stores. They are using a multi-phase production process. First, production process is received by Obersport in February; the second production phase begins in April/May and continues until August. Sport Obermeyer is starting its initial task for the 1993-1994 skiwear line. They must make a decision on where to source...
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...Cost In order to handle unstable demand and no lost sales or even worst, customers; the replenishment orders increase the inventory, creating a safety stock that carries out cost, of products that are not being sold. In addition of the cost of using a warehouse (rent, insurance, etc.) space that is not being use or utilized more efficient (such as different products that might be in short inventory). Indeed materials here are in risk to be damaged for being stocked for a long period of time, or deteriorate, which will bring more cost. Even more, if we need to repackage or give a special price so the customer will acquire. The cost will increase also, if a new product comes out to replace one of the inventories, making it obsolete and more difficult to sell. Increase Shipping and Receiving Cost Here it is clear that when a replenishment order is being entered to the facilities, it has to be handled, carried and placed in the warehouse, this will elevate the business labor cost, even more if over time has to be scheduled. Freight cost has also to be considered, taking in count that the container space will enlarge, to transport the goods; increasing the cost. Other important part of receiving is Quality Control; in case the materials have to be checked before entering the...
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...1) Compare and contrast the pre-1995 Lucent supply chain to the 1996-2000 supply chain with respect to the focus and structure of each. Identify what you believe to be the key factors that necessitated the changes that Lucent made. Did the changes make sense from a strategic perspective? In the pre 1995 Lucent’s supply chain, most of the Asian production was manufactured in Oklahoma City. The focus was on USA customers and business from Asia was not significant, therefore there were no manufacturing facilities set up in Asia. Lucent formed joint ventures with telecommunications-related companies across Asia to facilitate market entry into Asian markets. The focus was on the market entry strategy and not manufacturing. These joint ventures performed only final assembly and testing for customers in the countries in which the joint venture is located. The joint ventures had little or no production capabilities. However, for the 96-2000 supply chain, as there was huge growth of communications infrastructures in Asia, the Lucent also had to focus on Asia customers due to the amount of business opportunities. The manufacturing structure was changed such that custom engineering and manufacturing of Asian orders would be done in Taiwan. In addition, the joint ventures also manufacture their own circuit pack and outsourced the production of low volume level circuit packs. The ordering process was also different. In pre-95 supply chain, countries with local joint ventures...
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...PETRI KÄRKI The Impact of Customer Order Lead Time-Based Decisions on the Firm's Ability to Make Money Case Study: Build to Order Manufacturing of Electrical Equipment and Appliances ACTA WASAENSIA NO 257 ________________________________ INDUSTRIAL MANAGEMENT 25 UNIVERSITAS WASAENSIS 2012 Reviewers Professor Olli-Pekka Hilmola Lappeenranta University of Technology Department of Industrial Management Prikaatintie 9 FI–45100 Kouvola Finland Doctor Yongjiang Shi University of Cambridge Centre for International Manufacturing Institute for Manufacturing 17 Charles Babbage Road Cambridge, CB3 0FS, UK England III Julkaisija Vaasan yliopisto Tekijä(t) Petri Kärki Yhteystiedot Vaasan yliopisto Teknillinen tiedekunta Tuotantotalouden yksikkö PL 700 65101 Vaasa Julkaisupäivämäärä Maaliskuu 2012 Julkaisun tyyppi Monografia Julkaisusarjan nimi, osan numero Acta Wasaensia, 257 ISBN 978–951–476–385–1 ISSN 0355–2667, 1456–3738 Sivumäärä Kieli 194 Englanti Julkaisun nimike Asiakastoimitusaikaa koskevien päätösten vaikutus yrityksen kannattavuuteen. Tapaustutkimus: Tilaukselle valmistettavat sähkölaitteet ja -kojeet. Tiivistelmä Vuosikymmenten ajan tieteellisissä julkaisuissa on käsitelty toimitusnopeuden ja -joustavuuden tärkeyttä kilpailukyvyn ylläpitämisessä ja parantamisessa. Näiden tutkimusten ulkopuolelle ovat kuitenkin monesti jääneet toimialat, joissa valmistetaan tuotteita asiakastilauksille. Tästä syystä monilta...
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...product variety and standardize the product line. There are various implications associated with this strategy; firstly, Spartan’s current product line is based on job shop manufacturing operation where individual parts are produced in several departments and finally assembled in assembly area. Secondly, Spartan has multiple vendors for raw material supply and the materials department is using approximately 350 vendors. Thirdly, in the existing strategy, Spartan is using unique skilled workers. Finally, poor inventory management which reflects Spartan manufacturing operations are facing material shortage and stock outs. In order to opt for new strategy, Spartan has to make many changes and this process will certainly require time and efforts. For example, Spartan has to shift the manufacturing from batch process to assembly process. This will eventually require process reengineering; the reengineering will modify the existing department structure of manufacturing process. On the other side, Spartan has to reduce the number of suppliers; selection of the suppliers would be tedious task. In the assembly line manufacturing, Spartan will need skilled employees and hence, spend on the training on existing employees. Finally, the Spartan will have to improve their inventory management in order to avoid stock out or material shortage. 2. The job shop is more suitable to specialized equipment as each order specific requirement changes individually. In the...
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...Operations Management: Case Custom Molds Joseph Lynn A4006828 MBA4 GGSB : LSBF 1. What are the major issues facing Tom and Mason Miller? 2. Identify the individual processes on a flow diagram. What are the competitive priorities for these processes and the changing nature of the industry? 3. What alternatives might the Millers pursue? What key factors should they consider as they evaluate these alternatives? Comment Form for Assessed Work Section One To be completed by the student Please tick as appropriate Name (s) Joseph Lynn.................................................................. MBA FT □ MIB ........................................................................................................ MBA PT X MSc ........................................................................................................ Specialization Management Consulting................................... .............................................................................................................. Intake n° Cohort 4............................................................................ Student ID Number (s) A4006828................................................ Grenoble Main Campus Subject Operations Management..................................................................................................................... Assignment X Oral Presentation □ Exam □ Undergraduate □ □ Diploma □ □ Certificate □ Off site (state which...
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...RECOMMENDATION #2. Obtain market feedback earlier than Las Vegas, thereby converting some Speculative Production to Reactive Production. Sport Obermeyer can invite selected retailers to come in January to Aspen for an all-expenses-paid “Early Order Weekend”, where there is time for a”sneak preview” of the new line, some recreational skiing and socializing, and then the early placement of orders at a discount. To maximize the value of the market feedback, Sport Obermeyer’s “guest list” should include both large and small retailers and both urban and resort retailers. RECOMMENDATION #3. Decrease lead times for both raw materials and finished goods, thereby allowing more time to utilize existing capacity. Since the business strategy should emphasize Dependability more than Cost, lead-times can be reduced using some or all of the following methods: Choose suppliers of raw materials more on the basis of D than C. Expedite orders through information sharing with suppliers. Expedite shipments using faster (but more expensive) shippers. Establish some local (but more expensive) production capacity for “last minute” production. Other ways to reduce lead times include: From the items with long lead times, increase the amount of “safety stock” inventory for those items that are inexpensive (e.g., buttons) and/or shared by many parkas (e.g., black fabric). Simplify the parkas’ designs so that they can share as many components as possible. For example, are 100,000 varieties...
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...traditional practice of delivering products to distributors based on the basis of whatever order was placed on the company. This resulted in difference or variation of production price, as well as piled up inventory at the distributor’s depot. My decision is to implement the Just in time Distribution (JITD) concepts based on the fact that production and manufacturing is determined by the consumer’s needs and controlled by barilla being able to achieve this by eliminating huge variation for manufacturing and distributors. Furthermore Just In timed Distribution will also avoid the accumulation of inventory at the distributor’s depot. Barilla SPA is a vertical integrated organization, the rise and fall in demand will affect the other arms of the organization since they don’t only manufacture only pasta, its affects transportation, flour mills, sales etc. However, JITD faced some problems which include the fact that the customers were not co-operating with barilla by not sharing detailed sales with the company in order not to lose their control over placing orders. In addition to this, the employees in the sales and marketing department felt that their positions would be threaten if the Just In Time Distribution was Implemented. I recommend that barilla SPA be...
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