Even though with a master production schedule in place, the ability to adapt quickly to changes within production could have a negative impact on the overall schedule, the MPS (master production schedule) is an effective tool for planning time lines for producing commodities. It also projects the amount of inventory promised to the supplier, along with implementing plans and controls material capacity of resources to meet consumer demands, and calculates a forecast system for on the job goals to ensure accurate timing and the amount of inventory that should be produced.
For this paper, the case study in chapter 12 (The Realco Bread-maker) and chapter 13 (Supply-Chain Challenges in Post-Earthquake Japan. In the first case study regarding The Realco Bread-maker, this product has turned out to be a great success for the owner. The advantages this product gains over its competitors is price efficiency and unique features. Now that this product has become a hot commodity, the owner would like to know the projections of how these units will be produce in a specific timeframe to meet deadlines.
From the projects of the master production schedule, the projected ending inventory shows that there will be a surplus in the inventory to meet the demand if the numbers are adjusted by 20,000. Projecting the possibility that the suppliers would request to purchase more inventory this could be an accurate schedule. I believe the Realco Company has not overpromised because according to the MPS they have more inventory then they need if the forecast and production number are adjusted accurately during the production process.
I think the Realco Corporation should update their production numbers due to the concern of product efficiency. Of course forecasting the product demand to what the consumer need is very important but what good is it to mass produce when there could be a possibility to have some faulty products slip through the production line. If there is more product out in the market that can be sent back to the manufacturer for returns, that would cost the corporation money down the road.
I would suggest that the Kanban system could be an effective way of “controlling” inventory production, while making sure the product is manufactured to spec. In the week 5 discussions, I stated that “the Kanban system puts on limit on inventory overstock by controlling only what needs to be produce step by step. This way, funds are not being wasted on unnecessary scrap or miscues from the over production of inventory and not to forget, warehouse space is also used to create productivity instead of wasted storage”.
I think Jack’s approach to order promising can be good and bad at the same time. The confidence that Jack has in regards to having enough product to meet the demand can be accomplished according to his forecast and production numbers. With that said, Jack should also be concerned with the product efficiency just as much as the production angle. As stated above, this can be done using a system such as the Kanban system
The biggest advantage with Jack’s approach is that within his approach of an Available to promise (ATP) ideology to the consumer can be met because due to the completion of the production numbers. Our text book states that the Available to promise concept indicates the number of units that are available for sale each week, given those that have already been promised to customer (Bozarth C.C., & Handfield, R.B. 2013 pg. 364, para 3). Using this system, we can assume that any surplus of inventory in the warehouse is a positive with a form of deliver guarantee.
The disadvantage to this approach is that it could leave too much inventory on the shelves if for any reason the suppliers don’t order as much as forecast. This is a costly way to lose money by having product sitting for a certain amount of time. Again, here is a good example of how the Kanban concept can help prevent this vulnerable area within forecasting and production scheduling. The Kanban system only allows for a stage in production to be completed when another stage is finished. Therefore as suppliers or consumers order, the production process can produce according to orders needed. This could reduce wasted storage space within the warehouse.
The concept of formal master scheduling would improve this process through accurate data analysis, to show a hard number of projected product manufacturer orders through a tracking concept that matches outgoing inventory to the actual customer orders. One article states that a “scheduled receipt (MPS) is a type of a ‘firm planned’ MPS — it is a Planned receipt (MPS) from previous periods and MRP calculations that are now released and exist as a scheduled receipt. It is now a manufacturing order, with a specific content, because of that it is treated as firm” (Segerstedt, A. 2006 pg. 3595 para 4). Perhaps the improvement of delivery product on a timed schedule would be accomplished from formal master scheduling.
The biggest change within the organizational that would be required would be the role of responsibilities of the production manager in regards to inventory scheduling. For example, instead of following a simple inventory forecast of products that would need to be produce in a general time frame to meet demand, implementing the Kanban system along with the formal master scheduling would require more structural duties through proper planning. With that being said, a production manager duties would require more data analysis and research to fulfill these two systems.
This question is a question that I believe all manufactured based companies fear they have to answer some day. I think giving the supplier a broken promise that orders will be delivered just to gain a purchase order is must worse than refusing an order due to a lack of inventory. For example, the base of my company is to make sure we provide the client’s customized product in the timeframe that they need it.
The difficult part about my business is that, there are times where orders can come in during a time where my manufacture in over booked with other production jobs. On one hand, I don’t want to tell the client we can’t take the order in general because a company’s number one goal is to become profitable. But, to communicate to the client that we can fulfill the order in a certain timeframe conducive to the confidence of when we think our manufacture can complete the order is preferable and keeps the honest barrier in tact between us and the client’s relationship.
While this might cause for the client to leave and find another vendor, the relationship has not become compromised money. In business, keeping the commitment and promise to meet deadlines and product efficiency is the determining factor of how well a business will do long-term.
Using my business platform, it is very critical that we understand how long production start and finish times are with our manufacture. If we are aware of production timeframes, we can now give our clients a more accurate timeframe of how long it will take to complete their order.
The obvious assumption is that there would be an impact on the output of inventory due to a reduce amount of product. From a financial point of view, this can be helpful for the business to save money in production cost. When looking at this adjustment from a forecast, scheduling and planning perspective, there is a high risk that the corporation might not be able to meet the consumer demand in the future.
Chapter 13 Case Study: Challenges in Post-Earthquake Japan
The two main advantages of the Japanese auto industry was the ability to produce high quality products along with that ability to boost efficiency in their streamline manufacturing process/supply process. The disadvantage the Japanese face post-earthquake and tsunami was a strategic contingency plan to protect the supply chain from this form of disaster. The lack of forecast solutions (more specific possible environmental intangibles) to produce a surplus of inventory of car parts was not taken into consideration in the beginning stages of the manufacturing planning process.
When observing what the Lean production philosophy represents, this philosophy is appealing towards preventing inventory waste. After the Japanese suffered the loss of manufacturing due to Mother Nature, their “fool proof” plan was to implement a safety blanket to protect supply production along with an isolation format that will sustain any future disruptions in regards to supply production if this tragedy was to happen again.
Taking a closer look at the Lean supply philosophy, our text states that Lean principles are applied to “eliminate” waste in a firm’s sourcing and logistics, as well as within the firm’s internal operation (Bozarth C.C., & Handfield, R.B. 2013 pg. 408 para. 7). The core of the Lean principle is to monitor inventory waste which can be a contrast in how the Japanese were approaching in retrospect in the development to recovering their automotive stability through ensuring a surplus of inventory within its’ infrastructure.
Ironically I think the Kanban concept in particularly can improve on the Japanese auto “fool proof” supply chain. For example, when using the Kanban system, there can be a synchronization in a form of the Japanese can systematically place a JIT (Just-In-Time) element of how much inventory will be produced in the appropriate time frame is should be produced. One article states that “Toyota’s Just-in-Time (JIT) production system is generally regarded as the best system in the world (Spear and Bowen 1999). Key to JIT production is the kanban system. For greatest efficiency,
it is important to minimize fluctuation in the order quantity (Monden 1983 Even though the Japan region is a risk factor for certain weather intangibles does not mean they should over produce inventory because this could lead to storage waste” (Kotani S. 2007 para 3).
I believe that Toyota’s plan will have a positive impact in regards to supply chain management. The inventory financial flexibility that the Toyota Corporation will propose to its’ suppliers will provide a positive outcome for outsource manufacturers to comply with ease and cater to the needs of the corporation demands. While this could be a great benefit for Toyota, the opportunity for globalization in cultural diversity regions could also be accomplished.
Both of these case studies seem to have one thing in common. The critical process to forecast orders from the consumer demands and that ability to produce inventory according to where the demand lies has to be address and adjusted. By using formulated methods and philosophies, most if not all corporations will be able to acknowledge the advantages and disadvantages to ensure profitable success.
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