Materials Requirement Planning at Space Age Furniture

Introduction Manufacturing companies are involved in the business of developing products from rudimentary materials.Advertising We will write a custom case study sample on Materials Requirement Planning at Space Age Furniture specifically for you for only $16.05 $11/page Learn More In this paper, the author evaluates Space Age Furniture as a model manufacturing company. The author analyzes the concept of Materials Requirement Planning (MRP) and how it fits into the manufacturing spectrum. To this end, an MRP that is ideal for Space Age Furniture is developed. A critical analysis of the case study reveals that the efficiency of Space Age Furniture as a manufacturing company can be improved through the adoption of a functional MRP. Consequently, the various elements of the recommended system are highlighted in this paper. Specifically, the author will start by developing an MRP for Space Age Furniture Company. The system will be formulated using the inform ation provided in the case study. Secondly, the author will recommend strategies that can be used to enhance sub-assemblies. To this end, lot sizes of one thousand will be used as the yardstick. In addition, the author will analyze how overtime and inventory expenditures are related. An innovative MRP will be determined. The aim is to enhance the base figure used by Space Age. A comparison between manufacturing processes will be made. The comparative analysis will be used to identify the recommended mode of operation. The comparison will be followed by a review of strategies that can used to monitor operations. Finally, the author will propose transformations that may benefit the company. The alterations are aimed at enhancing value for the consumer. MRP for Space Age Furniture Company Developing an MRP requires three main elements. The Bill of Materials (BOM), Master Production Schedule (MPS), and Gross Requirements are the constituent elements of an ideal MRP (Vonderembse White, 2013). In line with this, the following is the recommended MRP for Space Age Furniture:Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Table 1 Recommended MRP for Space Age Furniture WEEK ITEM 1 2 3 4 5 6 Gemini 600 400 700 500 400 600 Saturn 300 400 400 600 300 300 Ways of Improving Sub-Assemblies The quality of production for a given product is determined by the performance of the sub-assembly unit. According to Li and Li (2000), most manufacturing companies make use f the mixed model assembly line. From the case study, it is evident that the two sub-assemblies are development with the help of one machine. Consequently, Space Age wishes to reduce change over time. The objective will be achieved by setting a limit of 1,000 units per batch. However, it is important to note that the capacity of the equipment has not been compromised in any way. In this regard, the best way to improve the performance is to eliminate wastage in the production time. The first step in improving the efficiency involves configurations. Vonderembse and White (2013) point out to the fact that sub-assemblies do not require complex configurations. Vonderembse and White (2013) suggest that the efficiency of a sub-assembly is realised when the lot volume moves faster. To this end, the machining process should reduce edges on part. In addition there needs to be a reduction in the parts that are loaded. Essentially, simplifying the configurations is a sure way of improving the performance of the respective sub-assemblies. A manufacturing company always has plenty of sub-assemblies for ‘reuse’ purposes. In this regard, efficiency can be enhanced through ‘saving as part’ (Li Li, 2000). When a procedure is saved as part the entire sub-assembly is perceived as a single unit.Advertising We will write a custom case study sample on Materials Requirement Plann ing at Space Age Furniture specifically for you for only $16.05 $11/page Learn More According to Vonderembse and White (2013), this technique helps to eliminate unwanted details in the manufacturing process, thereby improving on the performance. Finally, removing all degrees of freedom is an almost certain technique in which the performance of the sub-assemblies can be realized. Li and Li (2000) argue that in most cases, sub-assemblies require addition of mates. In this regard, the nuts and bolts are always locked down. MRP requires a system that ensures complete mating of the areas that require the technique. Such a move eliminates the minus signs that emerge after the procedure has been carried out. Improving the Base MRP Existing MRPs are improved by incorporating additional elements in the computations. Under such circumstances, Vonderembse and White (2013) argue that the base MRP can be improved by obtaining the total number of stands made per week. The improvement is reflected in table 2 below: Table 2 Improving base MRP WEEK ITEM 1 2 3 4 5 6 Gemini 600 400 700 500 400 600 Saturn 300 400 400 600 300 300 Week 1= 600 + 300 = 900Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Week 2= 400 + 400 = 800 Week 3=700 + 400 = 1100 Week 4= 500 + 600 = 1100 Week 5= 400 + 300 = 700 Week 6= 600 + 300 = 900 The Trade-off between Overtime Costs and Inventory Costs An analysis of the trade-off between overtime and inventory costs is an avenue through which manufacturing companies satisfy their stochastic demands. According to Hamraz, Caldwell, and Clarkson (2013), manufacturing companies are required to meet the unmet demand through overtime production. Consequently, the cost trickles down to the inventory since the excess demand requires labor and materials to be produced. The case study cites Ed Szewczak, an employee, who earns $22 per hour. According to Vonderembse and White (2013), the figure translates to a 50% premium for any overtime work. From the case study, it is clear that production of section 3079 is unique. To this end, the process does not have a set-up time. However, the company has managed to ensure that normal processing does not exceed 0.03 hours for each item. Based on the estimates in the case study the inventory cost translates to $0.25 per week. There is also the expenditure associated with individual subassembly in accounts. The cost is $0.75 per unit per week (Vonderembse White, 2013). The analysis reveals that expenditure on overtime translates to increases in those associated with inventory. According to Hamraz et al. (2013), manufacturing firms can realize a reduced inventory costs by including a miscellaneous budget for when the demand exceeds the normal supply. Organizations that determine a blend between their inventory and overtime costs tend to perform better in a dynamic market. In this regard, Space Age Furniture is keen on improving their performance in this regard. As previously mentioned, the company has managed to ensure that normal processing does not exceed 0.03 hours per unit. Towards this end, the trade-off for overtime in favour of inventory costs becomes necessary. According to the MRP developed, it i s clear that the company’s major inventory costs is with respect to the numerous components required of the two stands (Vonderembse White, 2013). The inventory costs will ultimately go high given the single employee who has to work overtime. However, the base MRP needs to be re-evaluated to ensure that the cost remains within the workable limits Types of Production Processing Companies that engage in manufacturing are placed with the burden of transforming raw materials into viable products. In this regard, the element of production processing requires an analysis. According to Vonderembse and White (2013), there are three main types of production processing. The three include a job shop, batch, repetitive or continuous production. The efficiency of an organization is realized once the primary mode of operation in a plant is established. Consequently, an analysis of the respective production processing types is necessary. Job Shop Llewellyn and Tappin (2003) provides a worki ng definition of this concept. The definition is in relation to the application of the term in a manufacturing company. To this end, the concept is defined as a small manufacturing network. Once a specific task is completed, a job shop can carry out a different assignment from a totally different customer (Llewellyn Tappin, 2003). Job shops are characterized by machines depending on the available skill set. Consequently, this type of production processing is seen as being flexible since machines can handle multiple tasks. Batch There are manufacturing companies which carry out automated tasks without any manual interference. According to Llewellyn and Tappin (2003), such a technique is referred to as the batch process. In such cases, the production line is fed with a series of instructions to ensure that certain tasks are carried out without any form of human intervention. Vonderembse and White (2013) argue that the batch technique brings about better results when it comes to produ ction. The technique is able to produce high volumes of products. Repetitive Production During the manufacturing cycle, companies can produce a series of identical products. Such a technique is referred to as repetitive production (Vonderembse White, 2013). Companies that have adopted a repetitive production technique realise a reduced cost of inventory. A reduced inventory translates to low production costs. However, the establishment of a primary mode of production is the best avenue to evaluate the cost of production for a given commodity. Primary Mode of Production The three types of production processes provide the basis of how manufacturing companies operate. Nevertheless, the job shop is seen as the primary mode of production. According to Vonderembse and White (2013), the primary mode of production is where the major processing takes place. Of the three outlined, the job shop appears to the primary mode of production. The argument is supported by the fact that a job shop is responsible for the production of various parts albeit repeatedly (Vonderembse White, 2013). The batch and repetitive production are both crucial in hastening the production processes. However, Heim, Peng, and Shekhar (2013) describe a job shop as the main unit of production. Heim et al. (2013) argue that a job shop can produce any product en masse. In this regard, the primary mode of production should be seen from the basis of the content that is produced rather than the time taken. Keeping Track of Job Status and Location during Production Operation management entails the activities and procedures that evaluate the entire production process. Vonderembse and White (2013) point out that the job status and locations are essential in evaluating the efficiency of a production line. In this regard, a production plan comes in handy. To this end, the job status becomes well defined in the event that a company comes up with a production plan. The firm has just adopted an MRP system. The application has lowered inventory costs. Keeping track of the job status improves on-time deliveries. The job status in a manufacturing company entails the phase of production of a product. In the case of Space Age Furniture, everything in the master schedule is being produced for customer orders, so all products are shipped almost immediately (Vonderembse White, 2013). In this regard, the job status would be establishing the phase in which the respective components are produced. The use of tracking software allows the management to effectively establish the procedures of manufacturing. The job status allows a company to establish the inventory and demands. To this end, there needs to be an effective inventory audit to ensure that all the production phases are carried out within the necessary timelines. According to MacCarthy, Wilson, and Crawford (2001), the location of a product is essential in determining the delivery times to the consumer. Consequently, estimating the location can also take the form of computer software. Automated monitoring techniques are essential in estimating and managing the location of a given product. Automation is cost effective and fast. Recommended Changes The case study by Space Age Furniture Company alludes to the fact that two of its products (the Saturn microwave stand and the Gemini TV stand) have a component that requires machining. Changes may be made to the company’s operations on the basis of these indications. According to Vonderembse and White (2013), the components are prepared on a special lathe. The main problem was the overtime in which the machinist had to work to ensure efficient delivery of the two stands. The ideal solution in that regard would be the hiring of another machinist alongside another lathe (Vonderembse White, 2013). Manufacturing companies optimise their performance when there are multiple machines that can carry out a given function. In this regard, the recommendation to acquire an additi onal machine and an extra employee would greatly improve on the company’s performance. Heim et al. (2013) argue that asset acquisition is expensive especially when it comes to manufacturing. Consequently, the company can opt for an outsourcing program. Outsourcing helps to minimise the cost of production. As already mentioned, the major problem emerges when a single employee has to work overtime to produce more products. To this end, Llewellyn and Tappin (2003) argue that overtime costs can be avoided when a company decides to take advantage of the various shifts throughout the day. Evidently, the two stands are essential towards developing the various products of Space Age Furniture. Towards this end, the company can transfer the additional employee to a new shift to avoid the overtime costs. Such a move will greatly improve on the quality of service delivery. Conclusion At the beginning of this discussion it was stated that MRP is essential to realise effective performance of a manufacturing endeavour. According to Vonderembse and White (2013), MRP helps to improve the production line of an organization. The discussion reveals that the job shop is the primary mode of production. To this end, the MRP developed for Space Age Furniture is essential in determining the materials required for the production. However, there is need for further research on this subject to establish the appropriate criteria of developing MRP. Nevertheless the current paper has demonstrated that indeed MRP is critical to the improvement of the production efficiency. Companies with high inventory costs can always readjust their base MRP computations. References Hamraz, B., Caldwell, N., Clarkson, J. (2013). A holistic categorization framework for literature on engineering change management. Systems Engineering, 16(4), 473-505. Heim, G., Peng, X., Shekhar, J. (2013). Longitudinal analysis of inhibitors of manufacturer delivery performance. Decision Sciences, 45(6), 1117-1158. L i, H., Li, L. (2000). Integrating systems concepts into manufacturing information sciences. Systems Research and Behavioral Science, 17(2), 135-147. Llewellyn, S., Tappin, E. (2003). Strategy in the public sector: Management in the wilderness. Journal of Management Studies, 40(4), 955-982. MacCarthy, B., Wilson, J., Crawford, S. (2001). Human performance in manufacturing and service industries. Human Factors and Ergonomics in Manufacturing Service Industries, 11(4), 299-320. Vonderembse, M., White, G. (2013). Operations management. San Diego: Bridgepoint Education, Inc. This case study on Materials Requirement Planning at Space Age Furniture was written and submitted by user Silas Richards to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. 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