#1 Group Presentation Course Code: ICMM Course Name: Inventory Control & Materials Management Version: May, 2013 Assignment: The Case of the Vanishing Inventory Text Book: : Introduction to Materials Management, Arnold et al. (Pearson Education) Materials and Resources Textboo Introduction to Materials Management, Arnold et al. (Pearson k Education) Softwar Microsoft Excel, Word e Videos http://youtu.be/E4OYh890IRE Introduction to MRP Resourc See attachments - MRP Detail Output Week 21 and 23, Production es Orders and Storeroom Transaction Report Assignment Description This assignment will give you the skills to conduct an analysis of an MRP. The role of the group is that of a master planner who is trying to meet the needs of both the internal and external customer, but things are not going well. Each group will complete all assignment steps. Students will have the option of either submitting a written report, or giving a final presentation on the group's work - groups must decide on the first day and let their instructor know so timing arrangements for any presentations can be made. All members of the group will be given the same mark. Case Nick Talbot had a problem. As the master planner for Hardy Custom Engraving he was responsible for ensuring that they meet the sometimes conflicting priorities of sales, production, and finance. Something has gone terribly wrong, and all Nick's plans have failed. Despite his best efforts to level production and still meet promised delivery dates, two customers will not be getting their shipments this week. Jim "Buster" Hush had just pointed out the obvious by declaring in front of everyone in the meeting that, "You should have seen it coming!!", but Nick couldn't see how. Nick stared at the latest output from the MRP system on his desk for K-1010, the product that was ruining his career. How could things have gone so wrong in two weeks? When Leona Hardy had taken over the company from her father, she came with some new ideas, many of which were already paying big dividends, and the company was really starting to grow. One of these ideas was the introduction of wood products to the existing line of metal fabricated items. There is no arguing that the line is proving popular with customers (and the sales force) resulting in higher revenues and profits. Demand for K-1010 is a perfect example of this. Who would have thought that there was such a big market for laser engraved hardwood key chains? Well, the report told the tale. Hardy had been selling the new key chains for the last 15 weeks or so. Demand started slow, but grew steadily. Everything had been going according to plan. There had been no problems with the supplier of the oak stock from which the key chains were cut. The line had reported no problems. No shortages, no production problems, but no finished goods when the system was telling him there should be ample coverage for the current customer orders. They just weren't there. When he first got wind of the problem, Nick had thought that sales might be up to their old tricks of booking new business inside the frozen zone. He had floated that in the meeting without giving it much thought. That had really lit Buster's fuse. Buster was adamant that no new orders were being booked inside the lead time for the key chains. He had already heard from Leona that those kinds of actions were not going to be tolerated. He remembered her distinctly saying, "This is a new product line and we wanted to make sure that we don't start off by making promises we can't keep." Buster knew it wouldn't be wise to test her on this (at least not right away), so he had instructed all his reps to pay very close attention to the available-to-promise values. He knew if there were any arguments down the line, he could claim he depended on the information system. In looking at the MRP record, Nick wondered why there were no material shortages for the oak stock. He knew that there were occasional knots and off cuts that meant that there should have been some scrap or yield issues but there was no scrap factor for the key chains. How was it that no material usage variances were being reported? He reviewed the issues of the oak stock from stores over the last couple of months hoping that would give him some clue. While future products would use oak, the key chains are currently the only product to use it, at a rate of 15 linear feet per 100 key chains. The latest cycle count, taken this morning, showed 1650 linear feet of oak on the shelf. Assignment steps 1. Choose 2-3 group members. Maximum 4 members per group. 2. Read the case. 3. Review the entire assignment, and decide as a group whether you will do a presentation or submit a written report. Inform your instructor which your group will do. 4. List all terms used in the MRP Detail Output report (attached). There are 15 terms in total. Explain the 15 terms in your own words. Show how 'projected available' and 'net' requirements are calculated. See #5 and #6. 5. Discuss the following in your groups in preparation for your report/presentation: o Describe the MRP activity for week #21. What is the main issue? o Describe the MRP activity for week #23. What is the main issue? o Is the MRP working correctly? Why or Why not? Hint: Does the Storeroom Transaction Report match the current raw material inventory? 6. From the Production Orders Report calculate the average scrap rate. o Would you order more raw materials? If no, why not? If yes, how much and when? o Would you consider safety stock? Explain. 7. Consider the following: o What is causing the poor customer service? o What can be done immediately to resolve the customer service issue? o What changes can be made to the system to avoid these problems long term? 8. Based on your findings from the above discussions, prepare a report or presentation. The report or presentation should include the following: Summary of the case A detailed explanation of how the MRP is functioning Discuss issues such as customer service, scrap rates and safety stock Should a raw material order be placed? What is the main issue and what caused it? What can be done right now to help improve the situation? What can be done to fix the issues for the long term? The completed assignments must be emailed to the instructor on the due date prior to the beginning of class in Word or Power Point format. If your group chose the PowerPoint presentation option, it should be between 15 and 20 minutes long. If your group chose the report option, it should be 5-7 pages long (doublespaced, 12 point Times New Roman font). NOTE: Use the criteria below as subject headings! Evaluation Breakdown (40% of final grade) Marks Criteria (95 To achieve top marks: total) Clearly define all 15 terms Terms /15 Describe activity for each of the 7 weekly WK #21 /15 columns Describe activity for each of the 7 weekly WK #23 /15 columns Calculate correct average scrap rate Scrap /5 Provide a detailed explanation if more Order /5 raw material needs to be ordered Provide a detailed explanation regarding Safety /5 Content Stock safety stock Provide a detailed explanation regarding Customer /5 Service the issues with customer service Explain what Nick could do right now to Immediat /5 e solution help improve the situation Long Describe at least 4 changes that could be term /10 made to the SCL system solution Conclusio Summarize findings and solutions /5 n Present a well-organized and visually appealing PowerPoint slide show (eg. clear headings, tidy content, interesting images) Presentat /10 All members must participate equally ion Formatt in the presentation ing All members must speak clearly and (total professionally 10 marks - Report is well organized (clear sections, report page numbers, proper formatting - use of OR PPT) paragraphs, correct font, etc.) Report is written clearly and concisely Report /10 Report meets the minimum page limit, or a reasonable justification is given for submitting less