Executive Shirt Company (ESC) is currently following a certain process that it had been using for a long time to produce regular shirts. The company’s manager has recently decided to add a new product to his company which is custom shirts believing that this will attract more profits to the company. To achieve this, the manager ordered a new cutting machine, asked two of his assistants to come up with different plans to implement the new product line and set only two constraints: 1. The Company should produce 16,000 regular shirts and 2,000 custom shirts per month and 2. The lead time for the custom shirt should not exceed 5 working days.
This document is intended to analyze the two different plans developed by the manager’s assistants Mike and Ike. In analyzing these plans, the focus will be on the following criteria:
1. Producing the required number of shirts.
2. Fulfilling the 5 days lead time condition for the custom shirt.
3. Cost impact by each of the two plans.
4. The efficiency of the process (i.e. which process better utilizes the machines and the labor in the company).
The analysis will proceed as follows:
1. Basic findings
2. Analysis of the current process implemented in the company for regular shirts.
3. Analysis of each of the two proposed plans, discussing the pros and cons of each plan.
4. Comparison of the two proposed plans with reference to the standard process
5. Conclusion and recommendations.
A general analysis to the standard process revealed the following:
1. The manufacturing lead time is very long
2. The current labor utilization is low
3. The company is working with 83% of its capacity
4. The inventory is very high
Main reasons for the above facts were:
1. Work was done in batches (not shirt by shirt)
2. Batch size was large (60 shirts per batch)
3. The cutting process produces 480 shirts every 2 hours (i.e. 8 batches at the same time)
4. The operation time of the cutting machine is large.
Mike tackled both the batch size and the labor utilization problems by reducing the batch size to 5 shirts per batch and by trying to maximize the use of each labor. Ike, on the other hand, focused on maximizing the labor utilization in the regular shirt production line. His idea was to spare a worker for every stage in the custom shirt production line on the expense of reducing the number of workers in the regular shirt line.
Process Flow Chart:
Current batch processing
Sales for the Executive Shirt Company are constituted of only a few basic styles and colours. Hence the company has a limited number of varieties to produce. So, it has large batches of each kind of shirt (size and color).
It has only one cutting machine, which is computer-controlled and can cut up to 60 layers of cloth at the same time. Also up to 8 patterns can be cut simultaneously. The cutting process by the machine takes 30 minutes irrespective of the number of patterns and number of layers. But, the set up time is quite significant. It takes 1.5 minutes to roll out a layer of cloth and so for 60 layers; it takes 90 minutes setup time. The machine is being operated by 4 operators and the company is using its maximum capacity, i.e. 60 layers and 8 patterns at a time. So,
Total number of shirts cut in one run = 60*8 = 480
Total time taken by one run = setup time + runtime = 90 + 30 = 120 minutes
Regular shirts labor content (minutes per shirt) for cutting = 120 / 480 = 0.25 min per shirt
As a result of these two approaches, Mike’s plan proved to be more effective &I would go for Mike's plan. However, there is one basic clarification i needed. All others have said that as per Ike's plan, there would be only one new person recruited. However, on reading through the case, i find that it clearly says that there would be 15 workers (excluding the person who cuts) in the new...
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