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cool, there was a great tv documentary in the airplane, which was about guess what? supply chain and processes. i swear, operation management is everywhere!

before i go into my lean as it applies to sony, i would like to share a few of the topics i extracted from the show, entitled america revealed: made in the usa (pbs, lion television, episode 4):

the host, yul kwon (winner of the tv show survivors, cbs), crossed the us to answer the question, is america still manufacturing something? not only did he prove that value-added production has increased, but foreign companies are actually seeking the us as a place to call home.

from an interview with volkswagen: http://www.volkswagengroupamerica.com/chattanooga/index.html

us manufacturer have decreased in quantity (50% in detroit), but production doubled due to more efficiency;
foreign manufacturer come to the us because of the lean manufacturing implementation;
volkswagen trainer claims that lean is about employee empowerment. they train stakeholders to recognise loss of efficiency, even if it is to program the robots; according to the trainer, "robots don't think, people need to do that for them"

from the military shipbuilding interview: http://www.irconnect.com/noc/press/pages/news_releases.html?d=95754

the latest aircraft carrier is the first to use cad design; its predecessor was design on ink and paper. even though commercial ship building was using cad for many years, the weapon manufacturing industry in the us is in desperate need to adopt more efficient operating processes, especially since "america produces 6 times more weapons than any other country on earth" (kwon);
cost over-run are the defacto standard in us military manufacturing;
previous to cad, all military ship designer worked in a vacuum, and had no idea of how their design would fit with others subsystems (example plumbing and electrical had to be rerouted to fit together, at the building stage);
after lean, the ships are build in models; prior to that, the hull was created, and every level was build in sequence. of course, all trades worked in a confined space, which made work layout and scheduling inefficient.


from nucor (steal recycling) http://www.nucor.com/

the use of electric furnace gave nucor a process advantage that no-one else had: capacity flexibility; they can reach the melting temperature of the furnace in hours, while others using fuel and cole take days. this lets nucor produce only when there is demand;
nucore succeeded at recognising the value of recycling steel, while its competitors thought that production from raw material was much less expensive.


lean at sony:

believe it or not, just in time is a really bad word for sales rep. the natural disasters of 2011 with the japan tsunami and thailand floods showed our firm what happens when the pull method is used, and no inventory is available. it took many months of extraordinary measures to ramp-up production, and even at over-capacity, this was not enough to regain customers' trust.

the idea of jit is of particular importance at this time of year because our dealer network also want to carry the minimum inventory, as we move into the next fiscal. it is a battle where our distribution channels want sony canada to hold inventory so that they can pull on customer's order, while we want to do the same with factory. in any case, all the operation management in the world will not take over the basic customer purchasing behaviour, if it is not in my hand within 5 minutes, i will get something else.

the idea of just-in time at sony, and the challenges are closely related to levelled scheduling and product mixes; our manufacture needs to stop, change the set-up, and start a new production for every model. they do not have dedicated production lines for each model. i understand the impact of holding inventory: ties up money, storage costs, obsolescence, deterioration, opportunity cost, administrative costs, insurance costs etc (slack, chambers & johnston, 2010 p 340) especially because factory reminds me every week, but our capacity flexibility simply does not let us use a pull model on every product.

now that i got the bad news out of the way, lets look at wastes which can be reduced in our organisation, by the use of lean manufacturing:


over-production.

price drop to clear existing stock;
delay introduction of new models until old stock is gone;
loose the first entrant advantage, since competitors and new entrant can make newer, updated product, while we wait to clear stock;
market saturation. with the lower price, customer will not wait for the new model, they buy the old one at cheaper price;
brand dissolution. manufacturer becomes known as not innovative;
market financial value loss. investors wait for the new product, and realise that inventory management is inefficient, or worts, r&d is too slow.


waiting time.

when no buffer or anticipation inventory is kept, the material delivery to dealer is delayed;
forecast errors lead to parts shortage (bill of material), which delay manufacturing;
time zone difference delay issue resolution with factory;
equipment set-up is needed at every model change;


transport.

international shipping delays (material is shipped by boat or airplane to ontario);
national shipping delays (orders arrive in vancouver by boat, are shipped by train to ontario, then are returned by air to western dealers);
material can be held at customs;
delivery companies cut-off time are not aligned with internal quality assurance (qa) schedule;
product sits on the loading dock until export documents are processed.


process.

demand forecast is sent weekly, impossible to make changes until next transmission;
marketing bulletins and dealer communication is slow due to hierarchy approval rules.


inventory.

obsolescence of cameras;
smaller box size save on shipping cost, time and storage space;
opportunity cost loss (unused capacity during slow season);
utility and insurance costs.


motion.

non value-added move between factories;
in case of large television, ergonomic delay with having to use lifts.


defectives.

defective products are handled as warranty claim;
spare parts are more expensive than finished product (low quantity, high warehousing and support cots);
brand negative impact;
rework costs in labour and parts;
shipping delay while rework;
investigation delay;
production line on hold while solution is investigated.




references

slack, n., chambers, s., & johnston, r. (2010). operations management (6th ed.). essex, uk: pearson education

kwon, y. (2012) america revealed.made in the usa. pbs; retrieved february 3rd 2013 from
http://video.pbs.org/video/2227791872

http://www.volkswagengroupamerica.com/chattanooga/index.html

http://www.irconnect.com/noc/press/pages/news_releases.html?d=95754

http://www.nucor.com/
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