Case study

The case study is a privately owned German Small Enterprise and produces a wide range of high precision thermoplastic parts and injection moulding tools for the Original Equipment Manufacturer (OEM) markets. The medical, optical, automotive, electronic and in particular the telecommunication industries form the main customer base. Export sales account for approximately 5% of the turnover of DEM 23 million in 2018, reinvestment in the business for 2019 accounted for approximately DEM 2.3 million. Though well equipped in terms of machinery and computer hardware, modern manufacturing techniques are noticeably absent. For example, the company uses a very basic Material Requirement Planning (MRP) system and no Just-In-Time (JIT) techniques are used. The management of its manufacturing operations shows little understanding or appreciation for such techniques.

Question 1. Based on the facts presented in the case study, explain how the organisation may be able to apply an MRP system, explaining ONE (1) benefit. (20 marks)