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Case Study on Thompson Telescope

Transcript of Thompson Telescopes

THOMPSON TELESCOPESBY GROUP 5 Abhishek Gupta Gagandeep Singh Meghna Gahlot

Formalization of what is intended to happen at some time in future Plans are based on the expectations

Process of coping with the changes that might affect the plan Intervention in operation to bring it back on track

Thompson Telescopes Ltd is a division of US based Murrays Parent Group, a large conglomerate Thompson sells a range of standard telescopes (200 std. types) for amateur astronomers and club

They also provides an option of customization They have targeted EMEA ( Europe, Middle East & Asia) markets as well

In 1996, Thompson established a telescopes manufacturing facilities in UK

It was built on an industrial estate at Ebbw Vale in Gwent, South Wales It helped: To manufacture various components and systems

To reduce cost To enhance the capabilities to meet the customers orders Thompson was buying only 50% of the parts from their US company by 2000 Thompson holds 18% Market of EMEA

MANAGERS Managing Director (John Tulk) Sales (Reg Fox)

DESCRIPTION Successfully established the company in the marketplace. He prepares & approve annual budget and submit monthly report. Target ROCE to 15% Sales take full ownership of processing customer orders from pricing, quoting delivery dates through manufacturing to delivery. Reg Fox major concern about the late delivery complaints & salespeople wasting time to collect data from manufacturing Responsible for Budgets & Period Financial reports. Peter operates standard costing system with direct labor performance reporting. Responsible for maintenance of designs for standard make to order products. Responsible for product support, production engineering, & buying. Her major concern was that the sales team tends to drop lots of orders with short delivery dates which creates pressure in the manufacturing system

Finance (Peter Nuttal) Engineering (Jack Rule) Manufacturing (Bronwen Curtess)

DESCRIPTION Product Thompson has 200 types of standard telescopes that are produced in 8 different sizes & 2 different finishes. Sales (70% - Std. Designs; 30% - Made to Order). There are 2500 active components listed in the system out of which 500 are raw materials, 1250 are made in house, & 750 are bought from US

Component Stock Control

Stock records are stored in file for every components used in Std. Type of telescope. Stock records are maintained by a stock controller (300entries/day). System automatically reorder the stock if it drops below a certain level but this this reordering is based on last 3 months usage which is out of date.

Finished Stock It is similar to Component Stock Control as in this we store records of Control finished telescopes that are there in the warehouse. When the stock falls below the limit, clerk raises the factory order. Warehouse processes customer orders in FIFO. Stores Procedure Stock check of stores is held twice each year. Volunteers from shop floor & Offices checks the physical figures & stock records. If there is a huge difference then stock controller is expected to provide the reason.


Choose any product and describe how will you manage the planning & control aspects For assistance you can use the planning and control model.

Long-term planning and control Uses aggregated demand forecasts Determines resources in aggregated form Objectives set in largely financial terms

Significance of Planning or ControlMonths/Years

Medium-term planning and controlPLANNING

Time Horizon


Uses partially disaggregated demand forecasts Determines resources and contingencies Objectives set in both financial and operations terms

Short-term planning and controlCONTROL

Uses totally disaggregated forecasts or actual demand Makes interventions to resources to correct deviations from plans Ad hoc consideration of operations objectives.



A manufacturing process in which components or goods are produced in groups or

batches and not in a continuous stream Batch production is necessary when a manufacturer is producing similar things, but with variations Thompson Telescope provides variety of customizations to customers. So, they need to manufacture the components in batches so as to easily integrate the components in the telescope as per the requirements Batches are usually traceable to production exigencies

It helps to set up the machine for the next part urgently required


24 H

3 - 12 WEEKS


INPUTS Raw Materials Work Force etc.

TRANSFORMING RESOURCES Manufacturing Machines Workers



ORDER WINNERS Quality Customization Option available to customers

ORDER QUALIFIERS Price Level of Customer Service

Delivery Time Competition Initial Cost of Raw Material is subsequently high Orders Management Unreliable Sales Forecast Part Numbering System Shipping parts requires 4 months advance notification Inventory Management



Customer Responsiveness Slow Fast

Planning Horizon Short Long

Major Planning Decision Timing Volume

Control Decisions Detailed Aggregated

P = ThroughputTime

D = Demand Time/

Customer WaitingTime


What Problems are being created for Manufacturing By: Sales Engineering Current procedures for stock control

SALES Sales Team tends to provide lots of orders with short delivery dates to the manufacturing team. This make it complex to manage the production system ENGINEERING The engineering team provides layout of the Standard telescope for manufacturing. But in make to order telescopes, the engineers have to prepare a new layout for manufacturing process. So, the manufacturing unit has to adjust the machines according to the new layout. CURRENT PROCEDURES FOR STOCK CONTROL Managing inventory was a major concern in this company. As the data fed by the stock controller in the system is only 40% accurate as compared to the stock quantities. Thus it creates problematic situation for the manufacturing team to efficiently continue the production

Thompsons Customers are complaining that deliveries are unreliable and that promises are often broken, but stocks are high and stock turns are sluggish. How should Thompson plan to overcome these problems?

Thompson must: Assure sales team must not be given authority to provide the order delivery dates. As delivery dates must be provided by using a proper sequence that can be FIFO, Priority based, Manufacturing Lead Time etc. Manufacturing Manager opinion must be given preference before adjusting the delivery dates. This will avoid unexpected promises made by the salesperson to the customer. The firm is bearing around 20% cost of holding inventories. Also the inventories are not managed in an appropriate way. For this, Thompson can deploy the warehouse inventories in the batches and must focus on unique identification numbers to be allocated to the batch so that stocks records can be easily made. Also inventory system must be updated daily to enhance the manufacturing lead time.