Difficult time in promising and delivering customer orders


Assignment task:

Whenever Jason Roberts thought about going to work on Friday morning, he starts to get a little knot in his stomach. Jason had recently accepted the job as operations manager for a small manufacturing company that specialized in a line of assemble-to-order products. When he accepted the job he was a recent graduate of a business program where he specialized in operations. He had done fairly well in his classes and had emerged as a confident, self-assured person who was sure he could handle such a job in a small company. The company, Westcott Products, had recently experienced rapid growth from the original start in a two-car garage justfive years earlier. In fact, Jason was the first person ever named as operations manager. Prior to that, the only production "manager" reporting to the oWestcott) was Frank Adams, the production supervisor. While Frank was an experienced supervisor, he had been promoted to supervisor directly from his old job as a machine operator and had no formal training in planning and control. He since he also had full responsibility for all the Wescott workers and equipment. Randy Stockard, the sales and marketing manager, had requested and finally applauded Judy Westcott's decision to hire Jason, since he felt production was having a much more difficult time in promising and delivering customer orders.

Randy was starting to spend more and more time on the phone with angry customers when they didn't get their orders at the time they expected them. The time away from developing new sales and the danger of losing established customers started to make him highly concerned about sustaining sales growth, to say nothing about his potential bonus check tied to new sales! Once Jason was placed in the position, however, the "honeymoon" was short, and soon Jason started

doubting how much he really did know. The company was still having trouble with promising customer orders and having the capacity to meet those orders. At first thought it was the forecasting method he used, but a recent analysis told him the total actual orders were generally within 10% of what the forecast projected. In addition, production never seemed to have any significant shortages in either subassemblies or components. In fact, many felt they had far too much material, and in the last couple of staff meetings Jake Marris (the company controller) was grumbling that he thought the inventory turn ratio of just less than 3.5 was unreasonable and costing the company a lot of money. It must be .something else, and he had to discover it quickly. The first idea he thought about was to request the assembly areas to work overtime, but he soon found out that was a sensitive topic that was to be used as a last resort. The workers in that area were highly skilled and would be difficult, if not impossible, to replace in any reasonable time. Adding more would also be difficult for the same reason. A year earlier they were being worked a lot of overtime but had finally had enough. Even though Wescott had no union, the workers got together and demanded better overtime control or they would all quit to move to other jobs that were plentiful for skilled workers in this area. The agreement ^vas that they were to be asked for no more than four hours of overtime per worker per week unless it was truly an emergency situation. They were well paid and all had families, and the time with their families was worth more to them than additional overtime pay. At least the high skill level had one advantage: Each of-the workers in the assembly area could skillfully assemble any of the models, and the equipment each had was flexible enough to handle all the models. Friday mornings were when Jason made his master schedule for the next week (since the standard lead time for all assemblies was quoted as one week, the company had felt no need to schedule farther into the future when very few orders existed there), and no matter how hard he tried he never seemed to be able to get it right. He was sure that he had to start the process by loading the jobs that were missed in the current week into the Monday and Tuesday time blocks and then hope that production could catch up with those in addition to the new jobs that were already promised. The promises came when Randy would inform him of a customer request and ask for a promise date- which was often "as soon as possible." Jason would look at the order to see if the material to make it was in stock and if the equipment to make it was running. He would then typically promise to have it available when requested. Now that a lot of promises were not being met, however, Randy was starting to demand that Jason "get control" of the operation. Jason tried to respond by scheduling a lot of each model to be run every week, but he often found he had to break into the run of a lot to respond to expediting from sales. He knew this made matters worse by using extra time to set up the equipment, but what else could he do? Even Judy

Wescott was asking him what she needed to do to help him improve the performance. His normal high level of self-confidence was being shaken. Jason started poring over his old operations book looking for something he could use. He finally realized that what he needed was a more effective system to develop master schedules from which he could promise orders, order components, and plan capacity. Unfortunately, he also recalled that when that material was covered in his class he had taken off early for spring break! Even though he knew enough to recognize the nature of the problem, he didn't know enough to set up such a schedule. Humbly, he called his former instructor to ask for advice. Once she was briefed on the problem, she told him to gather some information that he could use to develop a sample master schedule and rough-cut capacity plan. Once he had the information, she would help show him how to use it.

For each of the models, list the amount of run time they use the work center per item. Also list the setup time, if any. These times can be gathered from standards or, if the standard data are suspect in their accuracy or do not exist, use the actual average time from recent production.

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Other Management: Difficult time in promising and delivering customer orders
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