Question
Whenever Jason Roberts thought about going to work on Friday morning, he started to get a little knot in his stomach. Jason had recently accepted
Whenever Jason Roberts thought about going to work on Friday morning, he started
to get a little knot in his stomach. Jason had recently accepted the job as operations
manager for a small manufacturing company that specialized in a line of assemble-
to-order products. When he accepted the job he was a recent graduate of a
business program where he specialized in operations. He had done fairly well in his
classes and had emerged as a confident, self-assured person who was sure he could
handle such a job in a small company. The company, Westcott Products, had
recently experienced rapid growth from the original start in a two-car garage just
five years earlier. In fact, Jason was the first person ever named as operations
manager. Prior to that, the only production "manager" reporting to the owner (Judy
Westcott) was Frank Adams, the production supervisor. While Frank was an
experienced supervisor, he had been promoted to supervisor directly from his old
job as a machine operator and had no formal training in planning and control. He
soon found that planning was too complex and difficult for him to handle, especially
since he also had full responsibility for all the Wescott workers and equipment.
Randy Stockard, the sales and marketing manager, had requested and finally
applauded Judy Westcott's decision to hire Jason, since he felt production was
having a much more difficult time in promising and delivering customer orders.
Randy was starting to spend more and more time on the phone with angry
customers when they didn't get their orders at the time they expected them. The
time away from developing new sales and the danger of losing established
customers started to make him highly concerned about sustaining sales growth, to
say nothing about his potential bonus check tied to new sales! Once Jason was
placed in the position, however, the "honeymoon" was short, and soon Jason started
doubting how much he really did know. The company was still having trouble with
promising customer orders and having the capacity to meet those orders. At first he
thought it was the forecasting method he used, but a recent analysis told him the
total actual orders were generally within 10% of what the forecast projected. In
addition, production never seemed to have any significant shortages in either
subassemblies or components. In fact, many felt they had far too much material,
and in the last couple of staff meetings Jake Marris (the company controller) was
grumbling that he thought the inventory turn ratio of just less than 3.5 was
unreasonable and costing the company a lot of money. It must be .something else,
and he had to discover it quickly. The first idea he thought about was to request the
assembly areas to work overtime, but he soon found out that was a sensitive topic
that was to be used as a last resort. The workers in that area were highly skilled and
would be difficult, if not impossible, to replace in any reasonable time. Adding more
would also be difficult for the same reason. A year earlier they were being worked a
lot of overtime but had finally had enough. Even though Wescott had no union, the
workers got together and demanded better overtime control or they would all quit
to move to other jobs that were plentiful for skilled workers in this area. The
agreement ^vas that they were to be asked for no more than four hours of overtime
per worker per week unless it was truly an emergency situation. They were well paid
and all had families, and the time with their families was worth more to them than
additional overtime pay. At least the high skill level had one advantage: Each of-the
workers in the assembly area could skillfully assemble any of the models, and the equipment each had was flexible enough to handle all the models. Friday mornings
were when Jason made his master schedule for the next week (since the standard
lead time for all assemblies was quoted as one week, the company had felt no need
to schedule farther into the future when very few orders existed there), and no
matter how hard he tried he never seemed to be able to get it right. He was sure
that he had to start the process by loading the jobs that were missed in the current
week into the Monday and Tuesday time blocks and then hope that production could
catch up with those in addition to the new jobs that were already promised. The
promises came when Randy would inform him of a customer request and ask for a
promise date which was often "as soon as possible." Jason would look at the order
to see if the material to make it was in stock and if the equipment to make it was
running. He would then typically promise to have it available when requested. Now
that a lot of promises were not being met, however, Randy was starting to demand
that Jason "get control" of the operation. Jason tried to respond by scheduling a lot
of each model to be run every week, but he often found he had to break into the run
of a lot to respond to expediting from sales. He knew this made matters worse by
using extra time to set up the equipment, but what else could he do? Even Judy
Wescott was asking him what she needed to do to help him improve the
performance. His normal high level of self-confidence was being shaken. Jason
started poring over his old operations book looking for something he could use. He
finally realized that what he needed was a more effective system to develop master
schedules from which he could promise orders, order components, and plan
capacity. Unfortunately, he also recalled that when that material was covered in his
class he had taken off early for spring break! Even though he knew enough to
recognize the nature of the problem, he didn't know enough to set up such a
schedule. Humbly, he called his former instructor to ask for advice. Once she was
briefed on the problem, she told him to gather some information that he could use
to develop a sample master schedule and rough-cut capacity plan. Once he had the
information, she would help show him how to use it.
1. Pick a work center or piece of equipment that has caused some capacity problem
in the recent past. List all the product models that use that work center.
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