Evergreen Products Case
Evergreen’s desired outcomes are to improve customer satisfaction by delivering its orders on time, reduce inventories, reduce employee overtime expense and determine if the shop floor manager should be replaced. The company needs to improve its demand planning responsiveness to better serve customer needs. By improving its process and capabilities as they relate to orders, the desired results will be realized.
Evergreen should try to improve its order entry system by eliminating/reducing constraints to so that the end accomplishment is a faster delivery time to the customer.
We know that the order entry system is working poorly because the cycle time exceeds the customer timeline, but there may be additional problems causing the late orders since the shop is only operating at 80 percent capacity. Additionally, we are not given any information about the delivery system that would move the product from the shop floor to the customer. However, we can reasonable assume there is a problem with the order system, since it can take anywhere from 17 business hours (2 days) to 42 business hours (5.25 days) (assume 8-hour work day) for order to clear the shop floor. Since the three sale clerks are only encouraged to implement a 5-day out due date for the order, this immediately creates a constraint since it is possible for the order cycle to exceed 5 days. Not to mention that the sales clerks may even promise the products sooner. The multiple-steps in the process are creating undue constraints. Additionally, the high amount of erroneous orders (up to 65 percent) is also a large constraint on the process.
The long cycle time is creating a bottleneck in getting the products to the customer on time. Additionally, the process is a made-to-order system, as opposed to made-to-stock, so the product is not created until the order is received. The variance in the way the company receives the orders is also creating problems,...
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