Wheeled Coach is the world’s largest ambulance manufacturer. With multiple different products and around 3000 different raw materials there is huge potential for operating failures. In 1994 Wheeled Coach implemented a new MRP system called MAPICS. They hoped that by doing this that they would gain better control of their excess inventory that was becoming overwhelming.
Wheeled Coach is extremely successful in its industry, because of two main reasons. Firstly, the quality of the product that they produce is above any beyond any of their competitors. Secondly, Wheeled Coach is well known for its timely delivery. The combination of quality and timeliness has resulted in exceptional customer service that as a result has generated many customers for life.
However, not everything at wheeled coach was operating so perfectly. As mentioned earlier Wheeled Coach had a major problem in excess inventory. One reason for this was that their bill of materials accuracy was way below standard. When orders were received by Wheeled Coach, the list that tells them the multiple different parts required to make the particular model of ambulance that was ordered, was listing incorrect components. Due to this mistake, a domino effect caused purchase order inaccuracy, as orders are placed according to the bill of materials. Before Wheeled Coach was able to realize that this was an issue they had stock piled copious amounts of excess materials that were not needed in current orders. The final operating failure that Wheeled Coach is experiencing is a different matter entirely. Sales forecasting is not linked to bill of material accuracy or purchase order accuracy, but Wheeled Coach’s inability to estimate their future sales has contributed to the increase ...
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...than their current supplier. By decreasing their lead times, they would not have to buy materials for orders as far into the future as they do right now. While improving their forecasting process is extremely important, shortening lead times would lessen the extent of excess inventory. For instance, imagine that every month your forecasting is incorrect by two ambulances. With a lead time of six months for aluminum, you would order 12 ambulances worth of extra aluminum that would sit in excess inventory for that period of time. However, if you can shorten that lead time to four months, you only have 8 ambulances worth of surplus aluminum. This example does not take into account an improvement in forecasting. If both forecasting and the materials supply chain could be controlled better, Wheeled Coach has the potential to lower its spare inventory significantly.
The American Red Cross, a non-profit organization is implementing a new industry standard system called BioArch to track and process its blood products. The new infrastructure will improve the quality of its blood products since employees will be able utilize products based on inventory and age. The system also improves the product tracking process currently in place and it promises to improve customer relations since most competitors are already using the BioArch system. Currently, systems regionally are different and therefore inventory is kept separate. This creates challenges in meeting customer demands and it increases manufacturing manual processes.
By lowering selling prices across the board, Opossumtown, Inc. reduced its inventory turnover ratio, cutting the number of days to sell inventory from 174 days to 104 days; that is a 40% improvement. Opossumtown, Inc. also cut the number of days it takes to collect its credit accounts from 68 to 44 days, again that is 35% better than the previous year. The company is able to do this while cutting its debt ratio by 10% and increasing its current ratio by 25%, making it appear more favorable in terms of liquidity. As promising as this may look, this is not the whole picture. Opossumtown, Inc. shows an 11% decline in gross profit as well as operating income ratios, and a 3% decrease on the profit margin ratio. The decline of these ratios is a result of the company’s new strategy of decreasing the selling price and increasing its marketing and selling expenses. Opossumtown, Inc. made some noteworthy advancements with the implementation of its new plan for 2014. However, based on the assessment of the balance sheet, income statement and the ratios, the corporation did not achieve its goal to increase operating income by 6% and net income by 4%. Opossumtown, Inc. was only able to grow its operating income by a little more than half of one percent and net income by
The accounting system misallocated motors from the asset manufacturing equipment to inventory. There are issues of honesty, responsibility, and professional ethics.
Burns Corporation is an auto corporation that consists of 24 dealerships selling foreign automobiles in the United States. Burns has experienced an increase in their inventory, which is becoming costly and cutting into profits. Inventory costs total approximately 300 million dollars with a 3% finance charge. Recently, however, inventory costs have peaked at 360 million dollars and finance charges have reached approximately 750 thousand dollars monthly. As inventory grows due to misalignment of sales and merchandise ordering, so does the need for more accurate forecasting models. The manufactures have issued a "turn and earn" approach that affects how dealerships will be receiving their inventory. This change states that shipments will be based on inventory. The only way new models will be received is when other models are sold. Burns needs an analysis model that will assist them in future inventory decisions. The development of this model and what is should entail seems to be the main priority.
The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
Inventory issues are not being addressed. What items should be held in stock, at what levels, for how long in advance, etc.
Setup early warning system to inform customer about a potential stock out and supplier about a delayed order from CMO. This will help in reducing stock out situations.
Target Corporation needs to increase product availability based on the customer needs using a forecasting and supply chain
The global supply chain variability is causing customer delivery delayed by around 40% and also experiencing quality problems that is introduced by the humidity difference between the locations of Chinese manufacturing plants. Moreover, it is taking much longer to deliver products, and the spare parts preventing any timely customer services. The goal is to come up with a faster product delivery and product cycle employing strategic and tactical changes that might improve supply chain problem and address the quality and increase customer
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
The business of Smitty’s Lil Hauler remains extremely important and related to the today’s competitive business environment. Jeff Malott must clearly explore the advantages and disadvantages of buying the business of Smitty’s Lil Hauler. The business is essentially successful and diversified; therefore, Jeff Malott seems interested and positi...
...nager) to think of idea to get many orders. They found Europe market is the way to fill the capacity. However, new orders created new bottlenecks. Consequently, two things were done. First, the inventory is increased. Second, the delivery period is increased twice than before.
...ther or mechanical or even customs delay. Customers were upset of these issues when they were expected to have on-time delivery of their shipments.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
Toyota has implemented many different systems such as performance monitoring software, the Just in time (JIT) inventory system, electronic quality control system, communication system and information system thought out their value chain which enable to make correct decision during the manufacturing process. They have identified that having large inventories of spares cost them extensive capital and they have implemented the Just in time (JIT) inventory system which advices the suppliers the exact spares that the product line required and provides a time frame. Toyota adopted continuous learning and embraces change allowing their staff to research and innovation (Toyota