THOMPSON TELESCOPESBY GROUP 5

Abhishek GuptaGagandeep SinghMeghna Gahlot

OPERATIONS MANAGEMEN

T

PLANNING & CONTROL PLANNING –

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

CONTROL –

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

ABOUT THE CASE• Thompson Telescopes Ltd is a division of US based

Murray’s 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

THOMPSON EXPANSION• 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 DESCRIPTION

Managing Director (John Tulk)

Successfully established the company in the marketplace. He prepares & approve annual budget and submit monthly report. Target ROCE to 15%

Sales (Reg Fox)

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

Finance (Peter Nuttal)

Responsible for Budgets & Period Financial reports. Peter operates standard costing system with direct labor performance reporting.

Engineering(Jack Rule)

Responsible for maintenance of designs for standard make – to – order products.

Manufacturing(Bronwen Curtess)

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

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 Control

It is similar to Component Stock Control as in this we store records of 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.

GROUP ACTIVITY

Choose any product and describe how will you manage the planning & control aspects

For assistance you can use the planning and control model.

CONTROL ASPECTSLong-term planning and control

Uses aggregated demand forecasts Determines resources in aggregated

form Objectives set in largely financial terms

Medium-term planning and control Uses partially disaggregated demand

forecasts Determines resources and contingencies Objectives set in both financial and

operations terms

Short-term planning and control Uses totally disaggregated forecasts or

actual demand Makes interventions to resources to

correct deviations from plans Ad hoc consideration of operations

objectives.

PLANNING

Significance of Planning or Control

CONTROL

Tim

e H

ori

zon

Hou

rs/d

ays

Days

/Weeks/

Years

Mon

ths/

Years

MANUFACTURING PROCESS

BATCH PROCESS• 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

TRANSFORMED&

TRANSFORMING RESOURCES

3 - 12 WEEKS

24 H

OUTPUT

TRANSFORMING RESOURCES

Manufacturing MachinesWorkers

INPUTS

Raw MaterialsWork Force etc.

TRANSFORMED RESOURCES

Telescope

ORDER WINNING & QUALIFYING OBJECTIVES

ORDER WINNERS

• Quality• Customization Option available to

customers

ORDER QUALIFIERS

• Price• Level of Customer Service

ORDER LOSERS

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

VOLUME – VARIETY EFFECT

VOLUME

VARIETY

Customer Responsiveness

Planning Horizon

Major Planning Decision

Control Decisions

Low High Slow Short Timing Detailed

High Low Fast Long Volume Aggregated

P:D RATIO

P =

Throughput

Time

D = Demand

Time/

Customer

Waiting Time

CASE QUESTIONS

What Problems are being created for Manufacturing By:

–Sales–Engineering–Current procedures for stock control

QUESTION 1

SOLUTION 1• 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

Thompson’s 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?

QUESTION 2

SOLUTION 2• 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.

THANK YOU

QUESTION &

ANSWER