¶ … Planning (mrp)
Material Requirement Planning
Selection of production has great impact on an organizational production process, and a production planning is critical to ensure smooth flow of production. Space Age Furniture is a company specializing in the manufacturing of cabinets and tables to hold televisions and microwaves. The paper analyzes the case of Space Furniture by exposing the implications of holding inventories within the company compared with the costs that the company incurs with overtime. The paper also recommends the solutions for the operation manager to solve the problems she is currently facing in order to improve the company image and derive satisfaction from the company key employer as well as attracting more customers to the company.
Introduction
Space Age Furniture Company specializes in manufacturing of cabinets and tables used to hold portable televisions and microwave ovens. The products are manufactured in different sizes and features, and the manufacturing process follows the same production and operation process. The subassemblies that the company uses in producing the Gemini and Saturn stands have the Part number 3079 made by a special lathe machines dedicated for the production process. Ed Szewczak is the company skilled machinist with a lot of working experience. Ed is dedicated in his work and the company rates him as a highly skilled professional machinist. However, the company has recently started using MRP system that assists in maintaining zero inventory record to avoid the costs of holding goods in the inventory.
To maintain zero inventory record, the company is obliged to force Ed Szewczak to work overtime continuously because of the increase and continuous demand for the Part (3079). The goal of the company is to adopt a zero finished goods inventory, however, the company now faces challenges on the next action to take because Ed Szewczak is unhappy and uncomfortable with persistence overtime work Ed is doing due to a great demand of Part 3079. Coral Snodgrass, an operational manager is now considering next course of action to implement to protect the company from losing Ed.
Based on the information in the case, the company has started using MRP system to assist in reducing inventories as well as improving on-time delivery. The system assists Space Age to transport finished goods straight to customer without necessarily incurring holding costs. Ed is working 8 hours in the regular working days and the company will be able to produce only 1,200 pieces of part per week.
Detailed study of demand for Part (no. 3079) must be study comprehensively to determine next course of action to do. The company must produce 2,000 units of Part 3,079 to meet the order of 1,000 sub-assemblies for Gemini 435 and 1,000 sub-assemblies for Saturn 257. The weekly master schedule for producing for Gemini and Saturn within the next six weeks is presented in the Table 1
Table 1:Master Schedule
1
2
3
4
5
6
Gemini
Saturn
The data in the Table 1 presents the weekly demand for the company products and the demand for Gemini is higher the demand for Saturn. The company could employ many strategies to solve the problem faced by Coral.
Recommendations to address Coral's problems
Major problem that Coral faces is the worry of losing an experience and dedicated machinist like Ed Szewczak based on the need to produce the Part 3079. The increase in the production of the Part 3079 used in the production of the subassemblies for the Saturn and Gemini stands necessitate the company to introduce overtime for Ed. The company needs to address the problem very fast because it will be very difficult to get a skilled and experience machinist such as Ed Szewczak.
Using Forecasting Technique
The first strategy is to employ sound production planning to manufacture number of units. The strategy will assist the company to efficiently allocate the resources and human labor. (Hill, 2003). The approach will also assist the company to eliminate the overtime since the company will only focus on the quantity demanded. The strategy will assist the company to fix Ed Szewczak working hours based on the required limit.
The company should use forecasting technique using the data in the Master Schedule for the production planning to estimate weekly demand of the company products. The strategy will assist the company to come up with appropriate product schedules. Demand forecasting involves using the past demand records to forecast the demand of the consequent weeks. Based on the data in the Table 1, the average demand for the Part for the past 6 weeks are as follows:
Table 2: Forecasting Technique
Gemini
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