$$Ames Writing Instruments Inc.$$

Introduction$$

Ames Writing Instruments $($AWI$)$ produces and sells a variety of writing instruments to retail outlets such as drug stores, grocery stores, and office supply stores. They manufacture plastic pens, highlighters, mechanical pencils, and wooden pencils. Although the products are standardized, AWI packages the product in boxes imprinted with the customer logo and artwork to create a generic store$-$brand writing instrument.$$

Because of their consistent quality, and fast delivery, AWI$$s sales have been steadily increasing at a rate of over $30\%$ each year for the past three years. They have several clients that have been ordering writing instruments consistently. Additionally, new clients are being acquired each week who demand customized packaging and fast delivery. However, the additional volume and new clients seem to be creating a variety of problems in the manufacturing process.$$

The Problems$$

AWI is currently experiencing a variety of problems:$$

Purchasing and overhead costs have been steadily increasing. Profits have been decreasing. To address this problem, the CFO has mandated that the Purchasing Department should buy raw materials in bulk to take advantage of volume discounts.

The facility is quickly running out of room. The production space is so full of parts and products that AWI is considering building a second production facility and warehouse. The facilities manager comments, $$The Sales Department wants us to make more products more quickly, but we do not have the space.$$

AWI quotes an order lead time of $2$ weeks, and they are shipping approximately $15\%$ of the orders late. To compound this problem, within $8-10$ days of placing an order, several customers call to change the specifications on the artwork for the packaging. Because of the customized packaging, any finished products must be scrapped or reworked to accommodate these updated customer requests.

Recently, termites ruined AWI$$s stock of wood for making pencils. The purchasing manager had to expedite a new shipment of wood, incurring $$7,000$ in additional shipping costs. To prevent this problem from happening again, the purchasing manager ordered twice the usual amount of wood saying, $$We$$ll store twice as much wood in two places in the plant so that if this happens again, we will still have some raw materials to work with.$$

The Supply Chain Manager takes Initiative$$

The president of AWI has told Veronica K$.$ Mars, the supply chain manager, to solve the production problems and decrease the throughput time of the manufacturing process. Because of the recent decrease in profits, money for capital investment and hiring more workers will be severely limited$.$ Veronica Mars decides to buy a copy of Learning to See and use value stream maps to highlight how the production process should be improved.

Although AWI manufactures pens, highlighters, mechanical pencils, and wooden pencils, Veronica realizes that placing all of these product families on a single value stream map would be very difficult and confusing. The first step is to decide which family of products should be mapped. Each family of products $($pens$,$ highlighters, mechanical pencils, and wooden pencils$)$ uses a unique sequence of steps in their production. Wooden pencils are the highest profit margin product produced at AWI and demand for wooden pencils has been increasing recently. Therefore, Veronica K$.$ Mars chose the wooden pencil family of products to value stream map first.$$