MT435 Operations Management

Toney L Ferguson M.B.A., M.P.M

Albatross Anchor Case Study

Albatross Anchor is a small family owned business that began in 1976 withfour family members. Albatross anchor has grown exponentially and nowemploys one hundred and thirty people. Their one location/facility is situatedon twelve acres of land located in a rural suburb of Smalltown, USA. Themanufacturing plant and the main office are located in the same buildingwith the manufacturing. The administrative offices are in the front of thebuilding and the manufacturing area is in the back of the building. Themanufacturing part of the building is antiquated, worn, dirty, technologydeprived and it no longer meets all US safety and environmental standardsand the administrative offices are shabby and inefficient.The owners of this small business have added on various processes asneeded within the limited space provided within the plant. When AlbatrossAnchor first opened its doors their expertise laid in the manufacture of thebell/mushroom anchor (using a foundry process). Because of internationalcompetition in 1989 the owners of Albatross Anchor made the decision toexpand their product line to include fabricated snag hook anchors.

Albatross Anchor Case StudyProductsThe bell anchor is used primarily by fresh water marine craft. They aremanufactured primarily through a foundry process in which ore istransformed into a liquid state and poured into molds for production.The snag hook anchor is used primarily for small to medium sized saltwatermarine craft. The snag hook anchor is fabricated through the bending andwelding of iron rods and flat iron into a hook design so that bedrock andseaweed can be snagged to hold the marine craft at anchor.Each anchor is produced in multiple sizes to accommodate the type of craftrequiring the anchor.

Albatross Anchor Case StudyManufacturingEach anchor type requires its own unique equipment and manufacturingprocess. Both manufacturing areas share the same shipping and receivingarea, the warehouse area and administration. The manufacturing area of theplant has had to change to accommodate the manufacture of the twoseparate types of anchors. As each anchor requires its own manufacturingchallenges the manufacturing line must be completely changed over eachtime the anchor type is changed. The time to switch over from onemanufacturing process/operation to the other manufacturingprocess/operation is 36 hours.The plant space is at a premium and warehousing space for raw materialsand finished product is limited and located at the far south end of thebuilding.

Plant antiquation and safety issues result in small batch production only. Asa result lead time for large bulk orders is three to four weeks.

Albatross Anchor Case StudyCosts and shipping challengesCurrent manufacturing costs are $12.00 per pound for mushroom/bellanchors and $6.00 per pound for snag hook anchors. While Albatross Anchorcharges the same per unit as their competitors their profit margin is as muchas 30% less due to operations inefficiencies.Product size, bulk and weight (either anchor) requires shipment by rail andby specialized ground transportation (large trucks). Domestic orders areshipped by truck and international orders are shipped by rail and then bylarge freighter. These are the only two methods of shipment of product tocustomer.Receipt of raw materials is by rail. Prior to the sale of anchors into theinternational market all shipments of finished product went out completelyby truck and therefore all shipping activities were limited to the east side ofthe building. Now, because of the limitation of shipping product into theinternational marketplace all product shipments for international delivery goout of the receiving dock for shipment for transportation by rail and then bylarge freighter. Whereas prior to expansion into the internationalmarketplace shipping had been limited to the shipping department andreceiving was limited to the receiving area, now the receiving area must dodouble duty – shipping of international orders and receipt of all rawmaterials.Please view the below representation of the current building/facility set up.

Facility Layout

Unit 8 Written Assignment Question OneSelect three items (as listed below) and explain for each of your threeselections how it will help Albatross Anchor to improve job retention,employee morale, and employee dedication.(a) Work design(b) Cross training(c) Gainsharing and profit sharing(d) Job design(e) Task analysis(f) Worker analysis(g) Environmental analysis(h) Ergonomics(i) Technology and automation(j) Job analysis

Unit 8 Written AssignmentQuestion TwoBased on the scenario given in unit three and the information given in thiscase study make recommendations to Albatross Anchor for at least three ofthe following challenges:(a) Time management(b) Cost management(c) Quality management(d) Performance management(e) Enterprise project management(f) Technology adoption(g) Supply chain management(h) Distribution management

Unit 8 Written AssignmentQuestion ThreeAs the consultant for KU Consulting, you have been authorized to change theexisting facility (limited construction budget) and/or refine the process flowof the manufacturing area. All changes must be completed within a 60 daywindow with the majority of the changes happening at night when the plantis idle.

(a) List and detail the proposed changes and/or alterations. Please explainwhy you chose what you chose, give the rationale behind your choices andfinally, substantiate your work.(b) List and detail two implications and two complications that may occur asa result of the recommended changes. Remember activities in one area ofthe facility may have an impact on other areas of the facility.(c) Create a Gantt chart showing a timeline for when the different changesproposed should be made, detailing which changes may overlap and showinghow long each change will take to institute. Provide information to supportyour decisions and to explain your choices as shown in the Gantt chart.

Gantt chart