Case Study Chapter $2$

Muesli AG

Introduction

As you continue to learn about your new company, Muesli AG$,$ you decide that a visit to the production

line will be the best way to understand how it operates. Mr$.$ Jacks, the production manager volunteers to

take you on a tour of the facilities.

$$Muesli AG produces muesli on a single production line and

can only make one product at a time. This line can operate

$24$ hours a day, and the number of boxes that can be made

per hour depends on how many machines and which models

are installed. The staff working the assembly line will process

production orders in the sequence that they were released

by the production controller. Whenever a new production

order is started for a different product than the one before,

the machines must be reconfigured and an allergen cleanup

is required, which takes several hours.

$$I understand that one of the mandates you have been given

is to evaluate our installed machinery and equipment$$ says

Mr$.$ Jack. $$We can purchase extra processing units or upgrade

existing ones to increase our throughput. The machines are

very expensive though. We can also hire consultants to

evaluate our workflow and factory layout. They can make

recommendations for our work practices and machine place$-$

ment that can improve our efficiency, reducing the number of hours it takes to change over production

runs. Before that however, you should consider the length of our production runs. If we don$$t make too

many products and run the production lines for several days each time we produce a product, then we

will only do changeovers once or twice a week. I$$ve been trying to get the sales team to understand this,

but they fear losing sales if we don$$t have the right products available for sale at any given moment.$$

A critical strategic decision is how long to make production campaigns. A campaign corresponds to a series

of consecutive production orders of the same product. Long production campaigns will reduce the average

setup time $($there is no setup time between production orders of the same product$).$ On the other hand,

producing in small campaigns will allow a wider offering to the customer but reduce total output because

of the capacity lost to machine setup. Finding the right balance between small production campaigns that

allow you to respond to changing markets and long production campaigns that increase productivity is a

key element of the game.$1$

$1[$ L$$ger et al$.(2019)$ ERPsim Lab, HEC Montr$$al$.$ PARTICIPANT$$S GUIDE: MANUFACTURING GAME$]$

Figure $1$: The Production Line at Muesli AG