Create a master production schedule for the breadmaker in the case that considers production levels, demand for the product, and the best business strategy for the situation presented. Evaluate the advantages and disadvantages of Jack’s approach, considering how master scheduling can improve the process, and considering the organizational changes needed to increase the efficiency and effectiveness of the process. Examine the impact of refusing a customer’s order because of lack of supply of the product vs. accepting the order and failing to deliver. Describe the impact on average inventory levels and production if Realco produces 20,000 breadmakers every week, rather than 40,000 every other week.Chapter 13 Case Study: Supply-Chain Challenges in Post-Earthquake Japan Explain the advantages and disadvantages of the supply chain used in the Japanese auto industry before the March 11 earthquake and tsunami. Evaluate whether or not Toyota’s plan for a “foolproof” supply chain is consistent with the Lean production philosophy. Provide a recommendation and plan that you believe would be the best supply chain strategy for Toyota. Examine the impact Toyota’s plan will have on the way it handles relationship management in its supply chain.
Master Production Schedule for the Breadmaker:
To create a master production schedule for the breadmaker, we need to consider production levels, demand, and the best business strategy. Here’s a simplified example:
- Analyze demand: Determine the expected demand for the breadmaker based on historical data, market research, and any other relevant information.
- Assess production capacity: Evaluate the production capacity of the breadmaker based on factors such as equipment availability, labor capacity, and other resources.
- Develop a production plan: Create a schedule that optimizes production levels to meet demand. Consider factors like lead times, setup times, and any other constraints.
- Adjust the schedule: Continuously review and adjust the production schedule as new demand information becomes available or changes occur in the production capacity.
Advantages of a well-executed master production schedule:
- Improved customer satisfaction: Ensuring product availability and timely delivery enhances customer satisfaction.
- Optimal resource utilization: A well-planned schedule helps utilize resources efficiently, reducing waste and cost.
- Efficient production planning: It allows for better coordination among different departments, streamlining the production process.
- Reduced inventory levels: By aligning production with demand, excess inventory levels can be minimized.
Disadvantages of a poor master production schedule:
- Customer dissatisfaction: Inadequate supply may lead to unfulfilled orders, damaging customer relationships.
- Excess inventory or stockouts: Poor scheduling can result in either excess inventory levels or stockouts, impacting costs and customer service.
- Inefficient resource allocation: Without proper scheduling, resources may not be utilized optimally, leading to inefficiencies and higher costs.
- Disrupted production flow: Inconsistent scheduling can disrupt the production process, causing delays and affecting overall productivity.
Organizational Changes for Efficiency and Effectiveness: To increase the efficiency and effectiveness of the production process, the following organizational changes can be considered:
- Collaboration and communication: Foster effective communication channels between departments, suppliers, and customers to share information and address issues promptly.
- Cross-functional teams: Create cross-functional teams to improve coordination and decision-making across different functions, such as production, procurement, and sales.
- Continuous improvement: Implement a culture of continuous improvement to identify and address bottlenecks, streamline processes, and eliminate waste.
- Technology integration: Invest in technologies like enterprise resource planning (ERP) systems to enhance visibility, automate processes, and improve data accuracy.
- Supplier partnerships: Develop strong partnerships with key suppliers to ensure a stable and reliable supply chain, facilitating smoother production planning.
Impact of Refusing vs. Accepting an Order: Refusing a customer’s order due to a lack of supply can have negative consequences, while accepting an order and failing to deliver also has its drawbacks:
Refusing an order:
- Negative customer experience: Refusing an order may lead to customer dissatisfaction, potentially damaging the company’s reputation and customer relationships.
- Lost sales: Refusing orders can result in lost sales opportunities, affecting revenue and market share.
- Potential long-term impact: Customers who are turned away may be less likely to place future orders with the company.
Accepting an order and failing to deliver:
- Dissatisfied customers: Failing to deliver on accepted orders can lead to customer dissatisfaction and potential loss of trust.
- Reputational damage: Consistently failing to deliver on commitments can harm the company’s reputation in the market.
- Increased costs: The company may incur additional costs for expedited production or shipping to fulfill the order later, impacting profitability.
Impact of Producing 20,000 Breadmakers Every Week Instead of 40,000 Every Other Week: Producing 20,000 breadmakers every week instead of 40,000 every other week can have the following impacts:
- Average inventory levels: Producing fewer units more frequently may result in lower average inventory levels since there will be a shorter time between production runs. However, it depends on the demand patterns and lead times.
- Production efficiency: Producing in smaller batches can improve production efficiency by reducing setup times and allowing for more flexibility in responding to demand fluctuations.
- Supply chain responsiveness: Smaller production runs enable faster response to changes in demand, allowing the company to adapt more quickly.
- Increased operational costs: Producing smaller batches more frequently may lead to increased operational costs due to higher setup costs, increased labor requirements, and potential inefficiencies in smaller production runs.
Moving on to the second part of your request:
Advantages and Disadvantages of the Supply Chain in the Japanese Auto Industry before the March 11 Earthquake and Tsunami:
Advantages of the supply chain in the Japanese auto industry before the earthquake and tsunami:
- Efficient and lean production: The Japanese auto industry was known for its lean production systems, focusing on minimizing waste and maximizing efficiency.
- Strong supplier relationships: Automakers had long-standing relationships with their suppliers, promoting collaboration, trust, and shared goals.
- Just-in-time (JIT) inventory: The JIT approach reduced inventory holding costs while ensuring timely delivery of components and materials.
- High quality and reliability: The Japanese auto industry had a reputation for producing high-quality vehicles with low defect rates.
- Continuous improvement: Emphasis on Kaizen (continuous improvement) helped drive innovation and enhance operational performance.
Disadvantages of the supply chain in the Japanese auto industry before the earthquake and tsunami:
- Overreliance on single-source suppliers: The industry relied heavily on single-source suppliers, making it vulnerable to disruptions if any of them experienced issues.
- Lack of supply chain visibility: Limited visibility and communication along the supply chain made it challenging to anticipate and respond to disruptions effectively.
- Inflexibility to major disruptions: The supply chain was not designed to handle major disasters or global disruptions effectively.
- Complex network: The supply chain involved a complex network of suppliers, making it difficult to trace and address potential bottlenecks or quality issues.
Consistency of Toyota’s “Foolproof” Supply Chain with Lean Production Philosophy:
Toyota’s plan for a “foolproof” supply chain aligns with the principles of Lean production. Lean production emphasizes waste reduction, continuous improvement, and efficient processes. By creating a foolproof supply chain, Toyota aims to minimize disruptions, improve resilience, and enhance operational efficiency—all in line with the Lean philosophy.
Recommendation for Toyota’s Supply Chain Strategy:
To further strengthen its supply chain strategy, Toyota could consider the following recommendations:
- Diversify the supplier base: Reduce the reliance on single-source suppliers by identifying alternative suppliers and fostering relationships with them. This can mitigate the impact of disruptions in the event of supplier issues.
- Enhance supply chain visibility: Invest in technologies and systems that provide real-time visibility into the supply chain, enabling proactive identification and resolution of potential bottlenecks or disruptions.
- Develop risk management strategies: Implement risk management practices to identify and assess potential risks in the supply chain. Develop contingency plans to mitigate the impact of disruptions, such as alternative sourcing options or buffer inventory strategies.
- Strengthen collaboration: Foster closer collaboration with suppliers, sharing information and knowledge to improve overall supply chain performance. Implement regular communication channels and engage in joint problem-solving efforts.
- Continuous improvement: Continue the commitment to Kaizen and actively involve suppliers in the continuous improvement process. Encourage the exchange of ideas and innovations throughout the supply chain.
Impact on Relationship Management in Toyota’s Supply Chain:
Toyota’s “foolproof” supply chain plan would likely reinforce the need for strong relationship management in its supply chain. Close collaboration, communication, and mutual trust between Toyota and its suppliers would be crucial for implementing the plan successfully. It would require open lines of communication, transparency, and a willingness to share information to improve supply chain visibility and responsiveness. Toyota would need to establish effective mechanisms for feedback, problem-solving, and joint decision-making, ensuring that suppliers are actively involved in the continuous improvement efforts and resilience-building activities.