Individual Case Study – Worth 15% The Pilton Motor Car Company is re-designing i
ID: 347554 • Letter: I
Question
Individual Case Study – Worth 15%
The Pilton Motor Car Company is re-designing its luxury car line. It has chosen the London Assembly Plant as the site of its “Launch Program” for the company’s redesigned luxury cars. London had been chosen because of its superior quality control and closeness to suppliers and support facilities. London is producing the luxury line prior to scheduled production in another plant and is responsible for finalizing all engineering and production details for the massive redesign.
In executing the launch, one of the most complicated tasks is stocking the new parts inventory. Changes in ordering and delivery of parts for the line are more complex than in an ordinary model year.
Inventory building has engaged the staff for almost two months and is now at its height So far the most annoying and costly problem has been expediting the orders for parts which are undergoing changes and substitutions. Because of the fury in the Parts Control and Traffic Departments, morale is low and tension is building.
Similar to the agitation in those offices is the frenzy at the receiving docks. New parts are arriving by truck, railcar and even aircraft. Extra personnel have been temporary relocated from other assembly sites to ease the hurried receipt of parts. Even with the extra personnel, the receivers are starting to show signs of an inability to cope with the burgeoning workload, they are complaining about the task of deciphering bills of lading and packing slips. Because there is no universal standard, the receivers are often confused about part numbers, indicated quantities, and other information on bills of lading and packing slips.
In this turmoil, they are disregarding mandatory routines for receipt of goods and are themselves using dissimilar markings and exception symbols.
The receiving department sends it notated packing slips to the data processing department. There the keypunchers input the information into a Materials Requirement Planning System (MRP). Due to the current confusion over the receiving documents, the keypunchers are dubious about the accuracy of the resulting records. Feeling incapable of dealing with this problem, they have come to rely on the Engineering Specifications & Inventory Audit Department (Spec & Audit) to detect and correct any inventory errors.
Spec and Audit has the critical job of ultimate verification of inventory data. Each day personnel receive and audit computerized error lists that are output from systems programs designed to detect inventory discrepancies. For example –
duplicate inputs
quantities varying from invoiced quantities
etc.
They have access to all the documents which can be used to trace discrepancies. Unfortunately, their source documents include the notated packing slips forwarded from data processing. At the time of error recognition, authorized audit personnel may input the necessary information and/or back out erroneous input. Any audit person can enter information into the system.
In an attempt to gain more control over the large influx of materials, the audit staff has temporarily changed the cycle count procedure. Because the staff suspects a high error rate, the number of full-time cycle-counters has been increased. With the additional staff, incoming parts are counted more frequently. Furthermore, there is rechecking of questionable counts to help identify errors and to evaluate the transferred personnel.
The most spectacular part of the “Launch” is the presence and participation of engineers from company headquarters. The large, imported staff is redesigning and substituting parts daily. Some inventory personnel are working nearly fulltime keeping track of the part substitutions and the paperwork associated with the changes. Keeping track of part numbers and inputting revised information into the computer so the system can function properly is arduous.
Amid all the commotion, production has begun. It is already plagued with shortages, poor productivity and rescheduling. The production supervisor wants to issue a general statement to vindicate himself, he wants it known that he is not responsible for a “cripple” rate of 1 out of three cars produced. He intends to shift the blame to two culprits – an inadequate inventory system and the new hires in the “launch”.
Questions for Consideration:
What inventory problems are occurring? (List at least 5)
What could be contributing to the production problems? (List at least 5)
What goals should be set? (List at least 5)
Your answer should be no less than 4 pages and no more than 6 pages,
Explanation / Answer
Ans 1- Inventory problems that are occuring are as follows:
1) During the execution of the launch, the task of stocking the new inventory parts is very complicated. Changes in ordering and delivery of the parts are more complex than in an ordinary model.
2) The staff has been engaged in inventory building for a long period of time( almost 2 months). Due to this, work in other departments may have slowed down.
3) Expediting the orders for parts that are undergoing changes and substitutions has proven to be costly and cumbersome for the staff.
4) Anger in parts control and traffic department has resulted in low morale and tension among the staff, which may eventually lead to low productivity.
5) Even after getting extra personnel for receiving new parts at the receiving docks, they are unable to cope with the rapidly increasing workload and are complaining about the task of decoding bills of loading and packing slips.
Ans-2) Factors contributing to the production problems are:
1) Inadequate inventory system is a major factor which has led to the production problems. Starting from the stocking of new parts to complicated model of changes in ordering and delivery of parts, there were cost issues for changes and substitutions in ordered parts and major challenges were faced at the receiving dock due to lack of any universal standards for part numbers, quantities and other bill information .
2) As per the production supervisor, introduction of new hires in the launch was one of the major factors .Hiring of experienced staff would have made a difference in the whole process as the model of production and inventory was complicated. Morover it would have reduced the need for frequent changes and substitutions made during the production process and hence the costs.
3) The production supervisor should have taken the responsibility to get the whole production process done smoothly and effectively. Instead, he was busy proving his innocence and blaming others was poor productivity and high defect rate in the cars produced.
4) Distribution of workload was a challenge as most of the time, the staff was unable to cope with the increasing work and cumbersome tasks that has to be done. The staff was engaged in one task for a long period of time and hence was under pressure the whole. Morover, the company should have hired more staff as per the work.
5) All the mandatory routines for receipt of goods were violated as there were no clear instructions or universal standards that the receivers could have used for marking part numbers, quantities, bill information etc. This led to confusion over the receiving documents and the keypunchers of MRP department had to rely on spec and audit department in order to detect and correct any inventory errors.
Ans-3) The goals that should be set are:
1) Laying of proper set of instructions and standards for the receiving department so that there is no confusion about part numbering and symbols to be used. This would smoothen the result recording process for MRP department and woeld help in early detection of errors.
2) The complete production process should be divided into a number of separate taskforces and each taskforce should have enoufgh staff to cope with the given workload.
3)The production supervisor should be able to support the team and boost their morale in the time of high pressure. This would lead to increase in productivity and decrease in error rate.
4) Manual and repetitive tasks such as counting of parts or associated paperwork should be automated. This would save a lot of time and cost.The staff would be able to devote more time in completion of crucial tasks.
5) The most importal goal should be to reduce the cripple or defect rate to as low as possible as it will directly effect the brand image. Focus should be on maximum production of cars with no defects.