Transcript Flashy Flashers, Inc.

Flashy Flashers, Inc.
BUAD 3020:004
“Love Thy Customer As Thyself”
Sarah Giles
Jarred Plazak
Melissa Osborn
Haoman Qin
Kate Truckor
Nereida Rodriguez
Joe Sessin
Overview
• Company Background
▫ Implementation of MRP
▫ Mission
• The Problems
▫ Production
▫ Purchasing
• Purpose
▫ SWOT Analysis
▫ Order Winners and Order Qualifiers
• Analysis
▫ MPS schedules
• Recommendations
• Conclusion
Class Question 1
• What does MRP stand for and what is the
purpose of it?
Company Background
• Produces a line of automotive electrical components
▫ Serves about 75 auto parts suppliers and car dealers
• Recently installed an MRP system
▫ Should help company secure a competitive edge
• Company’s 2 most profitable products:
▫ 1. Automotive front sidelamp
▫ 2. Automotive front headlamp
• MRP system: Material Requirement Planning
▫ Method for the effective planning of all resources of a
manufacturing company
 Provides a schedule of when components should be ordered
or produced
Implementation of MRP System
• As soon as MRP system was implemented:
▫ Hopeful it would give them a competitive edge over their
competition
• 1 year later:
▫
▫
▫
▫
Inventory levels had not dropped as expected
Overtime levels had not dropped as expected
Customer service was getting worse
Too many complains about late shipments
• Goal:
▫ Find out what is going wrong with the MRP system
Our Mission
• write a manual MRP explosion for the side- and
headlamps for the next six weeks
• identify the good and bad points of MRP
implementation Flashy Flashers
• types of action notices that should be made for
order releases and adjusting priorities
• making suggestions for change
Company Problems
• Complaints about late shipments
• No formal system of priority planning which is
creating scheduling problems on the shop floor
• Experiencing too many stock-outs of purchased
parts
• Marketing is taking last minute orders for
favorite customers
Production Problems
• Production varies from week to week
• Inventory records are often incorrect
• Capacity plans are effected by often having to
produce more than planned
Purchasing Problems
• Buyers are frustrated with the new system
because there is no time for creative buying
• Almost all time is spent trying to follow up on
late orders
• Problems with unreliable vendor lead times
which is the cause for carrying more safety stock
than necessary for certain items
Purpose
• Provide data to develop the MRP records for the
two products of Flashy Flashers, Inc
• Find the causes of the implementation problems
experienced by the company
• Realize the value of action noticed in the
operation of an MRP system
SWOT Analysis of MRP
Strengths
Weaknesses
• Does not lend to optimize materials
acquisition costs
•
Increases visibility for future facility expansions
•
Determines the exact amount of inventory
necessary to meet production demand
•
Provides managers with control over execution
system
•
Provides customers with accurate order delivery
dates
•
Can identify shortages within inventory levels
•
Helps managers schedule work crews to meet the
needs of the manufacturing process without
overstaffing
• Because information needs to be
accurate, inaccurate information can
result in misplanning, overstock,
understock, or lack of appropriate
resources
•
Determines the ideal lot sizes that should be
purchased of each component item or raw
material
• Can be costly and time consuming to
set up
• Inventory levels are kept to a
minimum which means materials
must be purchased more frequently
and in smaller quantities which
increases order costs
• Firm is less likely to qualify for large
volume discounts
SWOT Analysis of MRP
Opportunities
Threats
• More streamline buying
patterns
• Employees unfamiliar with new
system, which could cause human
error
• Inventory levels can drop to
meet accurate production needs
without overstocking
• Unreliable lead times can occur
which would cause inaccurate
delivery dates and unsatisfied
customers
• Scheduling workers accurately
in order to not over staff
• Last minute orders can cause
difficulties when meeting
production requirements
• Increase customer satisfaction
• The data must be accurate for
orders to be placed in sync with
production scheduling of products
or this can cause shortages or
surpluses of products in inventory
• Decrease complaints about late
shipments
Competitive Advantage and Priorities
Order-Qualifiers
Order-Winners
• Help?
• Help?
Class Question 2
• What does MPS stand for and what is it’s purpose?
MPS
• MPS: Master Production Schedule
▫ A time-phased plan specifying how many and
when the firm plans to build each end item
TABLE C12.2 Master Production Schedule
The following data show the MPS start dates
ITEM DESCRIPTION AND MPS PART NUMBER
QUANTITY START DATE
Sidelamp (SL100E)
100 Week 13
80 Week 15
110 Week 16
Headlamp (HL200E)
120 Week 14
90 Week 15
75 Week 16
MPS of Headlamp
HL200E
C206P
(1)
C206P
(2)
HL211A
(1)
C310P
(1)
HL222P
(1)
HL212P
(1)
HL223F
(1)
MPS of Sidelamp
SL100E
C206P
(2)
SL111P
(1)
SL112A
(1)
SL113P
(1)
C310P
(1)
SL121F
(1)
SL122A
(1)
SL123A
(1)
SL131F
(1)
SL132P
(1)
SL133F
(1)
SL134P
(1)
Recommendations
• 1. Stabilize the master production schedule so that new
orders are not inserted into the schedule with less than
normal lead times
• 2. Synchronize the operations in the shop with the
material planners so that priorities are valid
▫ Will require updating priorities as they change such as
schedule dates of components needed
• 3. Train all employees who provide information to the
MRP system and employees who are the primary users of
the MRP information in addition to those who must
update the system
▫ Everybody should be aware of the need for accurate and
timely date