First for Forensics (FfF) is a high tech company operating in the forensic science market. The undisputed success that the company has had in the last decade, is now challenged by the entrance of a competitor able to provide low cost versions of the two main First for Forensics products: F1 Basic and F1 Total. The lack of competiveness is due to unsatisfactory delivery performance as a consequence of the long finished goods holding period in the warehouse. The MPC system currently employed is the MRP system based on monthly forecast. Despite the two main products present a high level of commonality the complexity is raised by a large range of specified options offered to customers. In order to reinforce the ability to compete the company needs to rethink and reset the manufacturing operations that are currently facing several issues. The main aims of this report are to investigate how potential improvements could be brought to the company, with particular regard to increase consumer service levels, decrease overall lead time and reduce operating cost.
This report focuses on the MPC system employed and on what can be done to improve its performance. As mentioned above, the method currently used is the MRP that can be defined as “an approach to calculating how many parts or materials of particular types are require and what time they are required” . It is, basically, a push system in which materials flow is made in anticipation of future demand. . This system presents some operational issues that deserve to be briefly treated. It assumes that lead-time never varies, costs are always constant and lot sizes are optimal . Moreover, being mainly based on forecast demand, susceptible to errors, it requires a greater inventory level than possible alternative systems . High level of inventories are undesirable for several reasons, such us they adsorb working capital, they increase overhead costs and if not sold quickly they could incur the risk to become deteriorated or damaged . Inventories are strongly correlated to lead-times, longer lead-times require longer inventories and vice versa . Generally speaking, the real world is based on uncertainty and the gap between MRP deterministic nature and uncertain of operations are the main reason why MRP alone does not work effectively .
The different problems faced by FfF require a re-thinking process based on JIT philosophy. Fundamentally, it must be studied if and how the introduction of pull system could improve the company performance. Pull system is intended as an approach in which “a work center is authorized to produce only when it has been signaled that there is a need for more parts in a downstream department” . Based
on these definitions JIT could be defined as “all the materials and components flow as smooth as a single stream of water” .
In the JIT environment the driver targets are :
Reducing inventory and lead-time;
Quality without defect.
Reducing setup times and lot sizes;
Focusing on continual improvement;
Despite the potencies benefits that JIT could bring a complete changeover from the conventional manufacturing system to the pure JIT production system does not seem to be sustainable due to cultural and managerial resistances that have general been observed in western companies . Moreover, even if low level of inventories are advisable, any difference in rate or timing between supply and demand would require a certain level of stock for compensative reasons . Short-term recommendation
The solution proposed is based on integration between the two systems so that the MRP would be employed for planning activities and the JIT for controlling purposes . More specifically, it is suggested to adopt the JIT philosophy as a guide for the whole manufacturing environment, while confining the JIT operation system to the...
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