Marmara Products Company (MPC) produces furniture. Their top-selling products are a stereo cabinet, a television cabinet, and a large entertainment center. The facility has been in business for 15 years and was created as a job shop. There was a machine shop in which wooden component parts were manufactured a finishing shop where the components were stained. painted, or laminated; and an assembly shop where the components were assembled and packaged for shipment to furniture stores. MPC now has a continuous improvement program, and the program teams have made several changes in the plant to approach a more continuous- flow manufacturing process. The cost for new equipment was too high to place the machining and finishing tasks in assembly cells, but the remaining facilities were rearranged so that the assembly processes are cellular. The machine-room team is working on set-up reduction projects for all of their machines and has made progress. The planning department has coordinated a Kanban system whereby lot sizes on many component parts have been reduced. The production at MPC is seasonal and the customers require short lead times so MPC uses a Make-To-Stock (MTS) environment. Since the changes, the planning department has noticed that more shortages are occurring, so they have increased their forecasts to compensate. MPC uses an MRP system that also drives their costs-and-accounting system. The production teams are evaluated based on efficiencies, a percentage of actual time per unit versus standard time per unit You are a new employee at MPC, and your job is to analyze their problems and offer solutions to guide the company as they seek improvements. Zeynep, the accounting manager, has been in your office all morning complaining about the state of the company. She says, "None of these so-called improvements are showing up on our bottom-line costs! The inventory is too high, the machine room is way over budget on overtime costs, and our customers are not getting their orders on time! I believe that this team concept that we are trying to enforce is making people take advantage of our company. People are talking too much about problems and working too little. How else can you explain the mess that we are in?" Mehmet, the machine-room supervisor, has another opinion when you go to see him. He says. We have more active workorders now than we have ever had before. And we are getting these workorders for such small amounts! Why, just last week my people spent two hours setting up a machine to run 45 parts. As soon as they had completed the set-up for the next part on their list. I received a new workorder for 45 more of the first part! Of course, we can't be profitable if the planning department is doing stupid things like that. What's more, our storage area is bursting at the seams! We are filled it up with partially filled pallets because our lot sizes are too small. It is those kanbans things that are our downfall. The continuous-improvement facilitator. Ali, has this to say: "We are using an antiquated measurement system to judge people. What good are efficiencies? We have proven that a part is only handled by a human being 3 percent of the time that it spends in this plant. Why aren't we looking at cycle times? Why aren't we making bigger improvements in set-up reduction? We are slaves to that MRP system, and nobody seems to recognize that the rules of the game have changed and the MRP numbers no longer make sense." Below are data about three component parts that are used in Marmara Products Company's highest-volume products. Each of these components is produced in the machine room. Old Set-Up (Hours) New Set-Up (Hours) old lot Size (Units) New lot Size (Units) Run Time (hr per unit) Part XB360 C044P AM900 1.00 1.25 2.15 0.75 0.75 1.50 300 150 175 50 100 75 0.03 0.08 0.10 1. What would you recommend to the plant manager that MPC do? 2. How do you respond to the comments made by Zeynep. Mehmet, and Al? Use mathematical methods to justify your suggestions, making assumptions when necessary. 3. Prepare a report to management. Marmara Products Company (MPC) produces furniture. Their top-selling products are a stereo cabinet, a television cabinet, and a large entertainment center. The facility has been in business for 15 years and was created as a job shop. There was a machine shop in which wooden component parts were manufactured a finishing shop where the components were stained. painted, or laminated; and an assembly shop where the components were assembled and packaged for shipment to furniture stores. MPC now has a continuous improvement program, and the program teams have made several changes in the plant to approach a more continuous- flow manufacturing process. The cost for new equipment was too high to place the machining and finishing tasks in assembly cells, but the remaining facilities were rearranged so that the assembly processes are cellular. The machine-room team is working on set-up reduction projects for all of their machines and has made progress. The planning department has coordinated a Kanban system whereby lot sizes on many component parts have been reduced. The production at MPC is seasonal and the customers require short lead times so MPC uses a Make-To-Stock (MTS) environment. Since the changes, the planning department has noticed that more shortages are occurring, so they have increased their forecasts to compensate. MPC uses an MRP system that also drives their costs-and-accounting system. The production teams are evaluated based on efficiencies, a percentage of actual time per unit versus standard time per unit You are a new employee at MPC, and your job is to analyze their problems and offer solutions to guide the company as they seek improvements. Zeynep, the accounting manager, has been in your office all morning complaining about the state of the company. She says, "None of these so-called improvements are showing up on our bottom-line costs! The inventory is too high, the machine room is way over budget on overtime costs, and our customers are not getting their orders on time! I believe that this team concept that we are trying to enforce is making people take advantage of our company. People are talking too much about problems and working too little. How else can you explain the mess that we are in?" Mehmet, the machine-room supervisor, has another opinion when you go to see him. He says. We have more active workorders now than we have ever had before. And we are getting these workorders for such small amounts! Why, just last week my people spent two hours setting up a machine to run 45 parts. As soon as they had completed the set-up for the next part on their list. I received a new workorder for 45 more of the first part! Of course, we can't be profitable if the planning department is doing stupid things like that. What's more, our storage area is bursting at the seams! We are filled it up with partially filled pallets because our lot sizes are too small. It is those kanbans things that are our downfall. The continuous-improvement facilitator. Ali, has this to say: "We are using an antiquated measurement system to judge people. What good are efficiencies? We have proven that a part is only handled by a human being 3 percent of the time that it spends in this plant. Why aren't we looking at cycle times? Why aren't we making bigger improvements in set-up reduction? We are slaves to that MRP system, and nobody seems to recognize that the rules of the game have changed and the MRP numbers no longer make sense." Below are data about three component parts that are used in Marmara Products Company's highest-volume products. Each of these components is produced in the machine room. Old Set-Up (Hours) New Set-Up (Hours) old lot Size (Units) New lot Size (Units) Run Time (hr per unit) Part XB360 C044P AM900 1.00 1.25 2.15 0.75 0.75 1.50 300 150 175 50 100 75 0.03 0.08 0.10 1. What would you recommend to the plant manager that MPC do? 2. How do you respond to the comments made by Zeynep. Mehmet, and Al? Use mathematical methods to justify your suggestions, making assumptions when necessary. 3. Prepare a report to management
