2) Draw the schematic flow diagram for Sunwind and all Volvo plants. (Draw at abstract level not detailed level). Provides detail of distances and demand (quantity based on 1987 forecast) flow.
Ans) Demand of Sunwind is 1250/week = 1250*45 = 56250 units
The following table gives us the demand of each plant yearly for the year 1985
Depending on the percentage of share of each plant of the total in 1985, the same percentage is used to calculate the demand of each plant in 1987, as we know the total production of Volvo from all the plants put together in 1987.
3) What are the challenges facing Sunwind? Do they need a change in strategy by Sunwind? Why?
Ans The challenges faced by SUNWIND are as follows :
* The main problem is to meet the increase in the demand from Volvo which is around 650 per week in 1985 to 1200 per week in 1986 * There is also a problem of meeting the quality of the finished products supplied by them, some of the machines like gluing machine had proved particularly troublesome and has increased rejects. * Some other bothering issues would be the off-spec plywood blanks received from Finnish supplier. * The rejection of the batches by Volvo as they haven’t met the quality constraints imposed by them. * The demand for the finished goods is around 1400 units/week while the ideal capacity of plant excluding wastages is only 1250 units/week; this mismatch is of a greatest concern for the Sunwind in the present scenario. * The trend of the major manufacturers like Toyota who are working on “Less” suppliers’ model to increase the efficiency is of a big threat as Volvo might even persuade it. * The system of JIT which is being implemented recently by the Volvo group, the Belgian manufacturer is turning out to be major competitor to Sunwood on this perspective. * The batch size if we see for different operations varies from 2500 to 500, such a huge amount of batch size might lead to having no control over the quality issues i.e. in case of any damage done its hard to find out and the who batch has to be set off which is of a huge loss for the plant. * This large batch size might also increases the MLT hence leads to a lot of inventory which has a lot of adverse effects. For the other part of the question whether they need to change the strategy of the Sunwind or not, yes they have to change indeed to so as to protect themselves from Volvo by meeting their demand needs. At the same time the technological aspects of Sunwind are at a ground level, they need to compete with the competitors and have to go for new machinery. Right now they are not following the JIT method while Volvo has gone for it, In that case to meet the Volvo demands it might have to put a huge pile of raw materials instead if it makes itself a JIT system it could save itself from one of the competitors. Their batch size as mentioned before is also very large, hence they need to change this strategy too. There is a quality issue also being faced hence they a need a new strategy which can address all these issues in a very efficient way.
4) What are the benefits to implement JIT for Sunwind? How Volvo will get benefited if Sunwind goes for JIT production and delivery?
Ans) The benefits to implement JIT for Sunwind are
1. The main advantage would be saving on inventory i.e. there is no need to spend a lot of money in storing the inventory for huge number of days until it is used instead JIT takes care of inventory only when needed hence there is no idle inventory. 2. The JIT system will take care of the batch size this will help increasing the frequency and also easy transportation and on time as the batch size is small 3. In case of any defects the wastage would be in a small scale...
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