om presentation applianceco

8/3/2019 OM Presentation ApplianceCo

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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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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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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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Developing a Master Production scheduleEstablish a policy of adhering to it