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Group 8:
Anivesh pgp27270
Brijesh pgp27283
Bharat pgp27290Rahul pgp27313
Rajarshi pgp27314
Sunil pgp27325
ApplianceCo
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SCENARIO
ApplianceCo is known for quality products
Has historically manufactured most parts in-house
Follows a detailed and sophisticated MRP system
Recently started outsourcing components
Planning to launch new products
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PROBLEMS
Competitors providing similar quality products with better
availability
Poor manufacturing cycle time
Suppliers do not have ERP system Unable to supply its products to retailers on time
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What is MRP and ERP ?
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MATERIALS REQUIREMENTS PLANNING
An MRP system is intended to simultaneously meet three
objectives:
y Ensure materials are available for production and products
are available for delivery to customers.y Maintain the lowest possible material and product levels in
store
y Plan manufacturing activities, delivery schedules and
purchasing activities
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ENTERPRISERESOURCE PLANNING
ERP(Enterprise Resource Planning ) systems typically
include the following characteristics:
y An integrated system that operates in real time (or next to
real time), without relying on periodic updates.y A common database, which supports all applications.
y A consistent look and feel throughout each module.
y Installation of the system without elaborate application/data
integration by the Information Technology (IT) department.
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What DATA we need ?
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DATACOLLECTION
Takt time
T = Ta / Td
Where
T = Takt time, e.g. [minutes of work / unit produced]Ta = Net time available to work, e.g. [minutes of work / day]
Td = Time demand (customer demand), e.g. [units required
/ day]
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DATACOLLECTION (Contd.) Bottleneck operations
A bottleneck is a phenomenon where the performance or
capacity of an entire system is limited by a single or limited
number of components or resources
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DATACOLLECTION (Contd.)
Average observed time of workers through time study
Observed time = (Sum of times for each element) /
(number of observations) Worker absenteeism
Distances between different workstations and various
departments
Number of suppliers who do not have ERP system
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RECOMMENDATIONS
Suppliers managementy Best way : Increased collaboration with suppliers and external
business partners
y Increasing collaboration is the key to competitive advantage &
can drive down costs across the supply chainy Motivate large suppliers to implement ERP system
y Integrate small suppliers with Companys ERP through EDI &Fax solutions
yAccelerate order-to-revenue cycles
y Improve inventory controls
y Improve communications and business relationships
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RECOMMENDATIONS(contd)
y Reducing Lead Time: To Achieve World-ClassOperations
y (1960-70): Manufacturers competed on the basis of cost
efficiencyy (1980): Quality was the rage and Zero Defects & Six Sigma
came into vogue
y Today- Along with Cost and quality, focus is on speed.
yAll manufacturers are under pressure from customers to cutlead times.
yRapid-response manufacturing pays big dividends.
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RECOMMENDATIONS(contd)y Manufacturing lead time refers to the time span from material
availability at the first processing operation to completion at the last
operation.
y In many manufacturing plants, less than 10% of the total
manufacturing lead time is spent actually manufacturing theproduct.
y Less than 5% of total customer lead time is spent in the production
process.
y
Clearly, there is ample opportunity to reduce lead times in mostorganizations.
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RECOMMENDATIONS (Contd.)
Reducing lead times:
y Doesnt involve speeding up equipment to cut the cycle times
or getting plant personnel to work faster.
y It involves:
y rapid fulfilment of customer orders
y rapid transformation of raw materials into quality products in the shortest amount
of time possible.
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RECOMMENDATIONS (Contd.)
y Example of a typical plant: lead time analysis for a product
lineActivity Total Days %
1 Processing 3 7.5
2 In-transit .5 1.3
3 Set-up/ changeover .5 1.3
4 In queue 30 75.0
5On hold-waiting for
materials
4 10.0
6 On hold-quality 2 5.0
Total 40 100.1
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RECOMMENDATIONS (Contd.)
y Lead Time Analysis:
y Documents all steps in a process
y Quantify the time & distance of each step in a process
y Identify value & non-value added activities
y Graph the process
y Determination % of Value Added work
y % VA = [(VA time) /( VA time + NVA time)]*100
y Reducing lead time contributes directly in improving customersatisfaction
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RECOMMENDATIONS
Reduce in-house manufacturing cycle time
Through implementing LEAN operations Eliminating all non-value adding activities
Building worker flexibility through cross-training
Reducing material movement time through distance reduction between
workstations and departments
Minimize inventory
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RECOMMENDATIONS (Contd.)
Developing a Master Production scheduleEstablish a policy of adhering to it
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