Jack Bracket, the CEO of Bracket Interna$3$onal $($BI$),$ has grown his business to sales last year

of $$78$ million, with a cost of goods sold of $$61$ million. Average inventory levels are about

$$14$ million. As a small manufacturer of steel shelving and brackets,

the firm operates three

small factories in Ohio, Kentucky, and South Carolina. BI$$s number one compe$33$ve priority is

$$service first,$$ while high product quality and low cost are the number two and three

priori$3$es$.$ Service at BI includes preproduc$3$on s

ervices such as customized engineering

design, produc$3$on services such as mee$3$ng customer promise dates and being flexible to

customer

$-$

driven changes, and postproduc$3$on services such as shipping, distribu$3$on$,$ and

field service.

The Ohio and Kentucky factories are automated flow shops, whereas the South Carolina

factory specializes in small custom orders and is more of a batch

$-$

processing job shop. All

three factories use bar coding labels and scanning equipment to monitor and cont

rol the

flow of materials. BI manually scans about $9,850$ items per day at all three factories. An item

may be an individual part, a roll of sheet steel, a box of $1,000$ rivets, a pallet load of brackets,

a box of quart oil cans, a finished shelf or bracket

set ready for shipment, and so on$.$ That is$,$

whatever a bar code label can be stuck on is bar coded. A factory year consists of $260$ days.

One full

$-$

$3$me BI employee works $2,000$ hours per year with an average salary including

benefits of $$69,000.$

Two recent sales calls have Mr$.$ Bracket considering switching from the old bar coding system

to a radio

$-$

frequency iden$3$fica$3$on device $($RFID$)$ system. The RFID vendors kept talking about

$$on

$-$

demand$$ opera$3$onal planning and control and how their RFID and s

o$\_$ware systems

could speed up the pace of BI$$s workflows. One RFID vendor provided the following

informa$3$on:

$$

Bar code scan $3$mes for the sheet metal business $($similar to BI$)$ average $10$ seconds

per item and include employee $3$me to find the bar code, pick up the item and$/$or

posi$3$on the item or handheld bar code reader so it can read the bar code, and in

some case

s physically reposi$3$on the item. Item orienta$3$on is a problem with manual

bar coding