Operations Management - Case Study Example

Phase 3 Project Analysis: Oregon Plants This paper reviews an analysis of the operations of three closely-linked plants in Oregon. It calls upon evidence gathered in the earlier two phases, and includes findings during plant visits. The S plant clearly performs a number of functions. In the absence of an onsite production manager, plant S has been unable to improve its efficiency and rationalize the plant. The three plants can be summarized as follows: Communications Communications between the plants has been hindered by the production manager being located away from plant S.

Secondly, purchasing of accessories in another plant and shipping to plant S represents a distraction from the other plants’ purchasing focus. Given the distances between the three plants, and the differing functions of the three plants, it is understandable that the managers in plants P and T are frustrated with the managers in plant S, and can’t understand their inability to improve their JIT performance. Materials and inventory The P and T plants’ lack of storage space makes it imperative that the logistics of their supplier(s) assures constant and predictable supply.

The 90-minute distance between the plants and the need for every-2-hour delivery places a burden on the S plant. Order entry There are two separate order entry procedures: 1. Plants P and T essentially have a constant order entry 2. Plant S has a variable order entry, depending on needs Supervision at the Plants The plant manager for all three plants is located in plant P, which means that he does not have visibility over the operations at S. Since he sees (primarily) the smooth functioning of P and T, which are focused factories, he may not understand the specific issues related to plant S.

Given the distances between the three plants, and the differing functions of the three plants, it is understandable that the managers in plants P and T are frustrated with the managers in plant S, and can’t understand their inability to improve their JIT performance. General Production Flow P and T are dedicated, focused plants with predictable inflow and outflows, while plant S is a combination of several different kinds of plants, including: 1. Packaging of accessories 2. Building subassemblies 3.

Regular, predictable manufacturing of 5 injection-molded parts. 4. Job shop for 28 injection-molded parts 5. WIP inventory storage for all three plants. 6. JIT subcontractor for plants P and T, including responsibility for inventory and transport Added to this burden is that S is working inefficiently and at high utilization, giving it little flexibility in the event of breakdowns, maintenance or poor manufacturing techniques. Suggested Remedies 1. Separate logistics from the production function. a. Consider creating a WIP storage facility near plants P and T which can store at least a 1-day’s supply b.

Concentrate the purchasing function for all plants in plant S, which has the more difficult purchasing and warehousing problem (Germain, 1996) 2. Outsource some elements of manufacturing in plant S with the goal of making plant S a focused factory a. Lease out the molding machines and subcontract for production of the 28 parts that are frequently changed (Yeung, 2002).. b. Keep the 5 items that are steadily produced in-house c. Contract out subassembly to another supplier d. Change the S plant to a logistics center and steady-production supplier 3.

Move production manager to plant S to oversee changes a. Bring together all three plant managers weekly to iron out problems. b. Tie centralized purchasing function in plant S to all three plants (good communication is vital to completion of their JIT goals) 4. Give logistics responsibility to plant S for delivery to the line (not the truck park outside). This assures that there is no ‘finger-pointing’ between the JIT supplier (S) and the other plants. 5. Reposition some of the employees who would lose their jobs to quality control/quality assurance during the manufacturing in the new, focused S facility.

Assurance of quality early along the line should improve overall quality. Add the following functions: a. Incoming raw materials QC b. Incoming subassembly and molded parts QC (a new function) As a result of implementing the above recommendations, plant S should be better-integrated into the overall operation. The key benefits of these changes will be: 1. Improved quality of production 2. Smoother operation in the S plant 3. Better communication between the plants 4. A more clearly-defined purchasing function. 5. Slack capacity in the S plant, which allows for surges 6.

The ability to control subcontractors and outsourced production in order to assure quality. References Germain, G. (1996). implications of just-in-time for logistics organization management and performance, The. Journal of Business Logistics , 14-24. Yeung, H. L. (2002). Advanced planning and scheduling with outsourcing in manufacturing supply chain. Computers and Industrial Engineering , 251-274.