The Morrison Company
This manufacturer of RFID smart tags was experiencing severe parts shortages, increases in work-in-process inventory, and other production difficulties due in part to the fact that it was running two distinctly different production lines serving two quite different industries – pharmaceutical and retail. In addition, there are longer-range concerns about capacity constraints in the face of rapidly growing demand.
1. Identify and assess the operations problems occurring at The Morrison company.
o Significant increases in sales and shortage of available raw material cause problems in the production process o There are inefficiencies that are caused by a shortage of materials, especially in ICs, because the producers reduced their stock during the economic crisis so that orders are delayed by up to 10 weeks o Production delays have tripled in the last 6 months. Some orders remained incomplete on the floor. This did not only produce cost, but also takes space in the packaging area where the uncompleted orders are stored. o During the production process of the inlay more and more mechanical or technical defects occur, so that the process has to be halted and repeated. o Personalization interrupts the production process and delays packaging o In the last year the number of return orders increases from 1 to 3 %. The majority are not technical defects but incorrect contents of the packages o Availability of machines has decreased, there are concerns that some of the assembly machines do not work correctly o the production planning is working without electronic support, there is no ERP system
2. Explain the differences between the production processes for the pharmaceutical product line and those of the retail product line. Why are they different?
o The production process consists of six steps:
(1) receiving, inspection, and inventory (2) parts picking (3) inlay fabrication and testing (4) tag assembly and testing (5)
1. Identify and assess the operations problems occurring at The Morrison company.
o Significant increases in sales and shortage of available raw material cause problems in the production process o There are inefficiencies that are caused by a shortage of materials, especially in ICs, because the producers reduced their stock during the economic crisis so that orders are delayed by up to 10 weeks o Production delays have tripled in the last 6 months. Some orders remained incomplete on the floor. This did not only produce cost, but also takes space in the packaging area where the uncompleted orders are stored. o During the production process of the inlay more and more mechanical or technical defects occur, so that the process has to be halted and repeated. o Personalization interrupts the production process and delays packaging o In the last year the number of return orders increases from 1 to 3 %. The majority are not technical defects but incorrect contents of the packages o Availability of machines has decreased, there are concerns that some of the assembly machines do not work correctly o the production planning is working without electronic support, there is no ERP system
2. Explain the differences between the production processes for the pharmaceutical product line and those of the retail product line. Why are they different?
o The production process consists of six steps:
(1) receiving, inspection, and inventory (2) parts picking (3) inlay fabrication and testing (4) tag assembly and testing (5)