Operations Research Paint Company

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Globesco Inc. is a local paint manufacturer which develops, produces and distributes various types of paints in the Philippines. It has been in the industry for over 50 years and has established itself as one of the major players in the industry. Globesco currently carries three brands of paint namely, Sphero, Manor and Canadian. Sphero is the flagship brand of Globesco while Manor and Canadian caters to mid-level and low-level income class, respectively. Each of these brands has numerous sub-types which caters different needs of the consumers. The paint industry is divided into two distinct sectors. The first sector is the architectural sector, which is composed of decorative paints for homes, offices and buildings; while the other sector is the industrial sector, which composed of paints that are factory-applied to manufactured goods as part of the production process such as automotive and appliance coatings. Brand equity is particularly important in the architectural sector and not too much in the industrial. The key factor in the industrial is as simple as meeting specification requirements. Because of this, margins are lower and the one with the cheapest price wins. The industrial sector is dominated by niche players which capitalize on by the niche markets. Globesco is particularly known for its industrial paint products. However, because of the lower margins in the industrial sector, Globesco would like to pursue the architectural sector despite the tough competition taking place in this sector. The architectural sector is basically dominated by the top 3 brands namely Boysen, Davies and Welcoat. In order for Globesco to compete in this industry, the group proposes that Globesco offer painting services as well. This will be seen as a paint service bundle wherein Globesco paint brands will be used in the paint services. With this, Globesco will be able to pursue a niche market and compete in the architectural sector. Operations Research Applications

Globesco will have to deal with a lot of obstacles in trying to pursue this new strategy. As such, there are four key areas wherein Operations Research can be of help in making the strategy more efficient. These are facility layout design, seasonal employment, advertising and inventory management. Globesco will have to make their production more efficient so that they can effectively reduce their costs. To be able to do this, Globesco needs to improve the layout design of the warehouses to optimize performance. The deltahedron heuristics method will be used to solve this problem by means of the frequency of visits from one facility to the next. Second, there is also a need for a new hiring/firing policy because Globesco will basically have a new division which will consist of painters. Dynamic programming as well as Integer Linear Programming (ILP) will be utilized to create the employment policy. Third, Globesco will essentially have to pursue advertising despite the fact that they strongly oppose aggressive advertising. Using the Markov chains improvement policy, Globesco will be able to determine which policies they should use on different circumstances. Lastly, by applying the Monte Carlo simulation in the inventory models, an optimal inventory management policy will be deduced. 1: Facility Layout Design

In order to be more efficient, Globesco Inc. needs to make the necessary adjustments in terms of factory layout design. In finding the layout that can optimize performance, the group will use the deltahedron heuristics method using frequency of visits from one facility to another. We have identified 11 key areas in the factory that can be moved in order to improve efficiency. These 11 areas are: 1Forklift Docking

2Raw Materials Room
3Emulsion / Resin Tanks
4High-Speed Paste Mixer
5High-Speed Paint Mixer
6Let-Down Tank
7Water Tanks
8Tinting Station
9WIP Area
10Finished Goods Area
11Rest Room

We have also created a matrix that...
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