Mfg$.$ VSM Exercise $1$ Case Study

Customer is ABC Inc. who wants to purchase $16,000$ widgets per month from your company.

They provide a $30$ day forecast and daily orders to our company through EDI to our MRP

system.

We in$-$turn provide a $6$ week forecast to our supplier XYZ Inc. and we fax weekly orders to our

supplier for the raw material ingots. The supplier supplies the material to us by truck two

times a week and we roughly have about $5$ days of supply at our warehouse.

Our factory runs on $2$ shifts with $7$ hours per shift each day for $5$ days a week. Assume there

are $20$ working days in a month.

The first operation is the stamping operation. It takes $4$ seconds to complete one stamping

operation. We place $4$ ingots into the machine for each stamping operation. This machine has

an uptime of $85\%.$ The stamping operation is a shared resource across other centers.

After the stamping operation, there is an inventory of about $5000$ pieces of stamped ingots at

any given point of time.

The next operation is spot welding which takes about $30$ seconds for each piece. This

operation has an uptime of $100\%$ and after this operation, there are roughly $1000$ pieces of

welded ingots at any point in time.