Problem description:

LGG company is interested in implementing lean concepts in its refrigerator production facility to reduce its production lead time and costs. A major step to convert its traditional production system to a lean one is to develop the current state map. The company produces different models of refrigerators, but they decided to start with a product family that contains two models: model $301$ and model $302.$ The final products are sent directly to the distributor Sellers Inc. once a week and the metal sheets are received from their supplier Steels Co$.$ once a week.

Customer$$s demand

While the weekly demand may exhibit considerable mix variations, the total demand has been quite stable at an average of $140$ units per week $($with an average of $100$ units for model $301$

and $40$ units for model $302).$ Sellers Inc. currently receives one weekly shipment from the company and would prefer daily shipments in the future as well as some reduction in unit cost.

Work time

$5$ days per week; One $8-$hr shift per day. Two $15-$min paid break periods;

The regular time labour cost is $$40/$hr and the overtime labour cost is $$60/$hr$.$

The current collective agreement limits overtime to a maximum of $2$ hrs per day.

Production Control Department

The Production Control Department performs the following actions:

Receives a monthly forecast from the buyer via fax and enters it manually into the SAP system. Receives weekly order from the buyer via fax, Sends the $8-$week forecast to the raw material supplier via fax,

Replenishes the raw metal sheets by weekly orders via fax,

Generates the MRP$-$ based weekly requirements, Sends weekly operations schedules to all the departments.

Production processes:

Each unit goes through all the production processes in the following order.

Process Name

Metal cutting &

bending $($shared$)$

Used labor

$1$

Cycle time $($sec$.)$

$45$

Changeover time

$($min$.)$

$45$

Up$-$time

$60\%$

Observed inventory

$15$ days of raw sheets $($worth $$6000),$

$380$ units of cut$/$bent sheets @$$5$ each$*$

Process Name

Base & Door

assembly

Used labor

$3$

Cycle time $($min$)$

$36($cannot reduce$)$

Changeover time $($min$.)$

$2$

Up$-$time

$95\%$

Observed inventory

$300($units$)$ @ $$50$ each$*$

Process Name

Insulation

Used labor

$2$

Cycle time $($min$)$

$20($cannot reduced$)$

Changeover time $($min$.)$

$5$

Up$-$time

$85\%$

Observed inventory

$261($units$)$ @ $$60$ each$*$

Process Name

Engine $+$

Condenser

$1/2$

Used labor

$2$

Total cycle time $($min$)$

$20($cannot reduce$)$

Changeover time $($min$.)$

$4$

Up$-$time

$95\%$

Observed inventory

$210($units$)$ @ $$150$ each$*$

Process Name

Gas insertion$*$

Used labor

$1$

Cycle time $($min$)$

$15$

Changeover time $($min$.)$

$15$

Up$-$time

$90\%$

Observed inventory

$200($units$)$ @ $$300$ each$*$

$*$Gas insertion is done at another location and cannot be relocated. Refrigerators are transferred to the gas insertion station once a day.

Process Name

Main Assembly

Used labor

$6$

Total cycle time $($min$)$

$60$

Changeover time $($min$.)$

$0$

Up$-$time

$95\%$

Observed inventory

$247($units$)$ @ $$500$ each$*$

Process Name

Accessory insertion

Used labor

$2$

Cycle time $($min$)$

$16$

Changeover time $($min$.)$

$0$

Up$-$time

$95\%$

Observed inventory

$200($units$)$ @ $$600$ each$*$

Process Name

Testing &

Packaging

Used labor

$3$

Cycle time $($min$)$

$27$

Changeover time $($min$.)$

$5$

Up$-$time

$90\%$

Observed inventory

$290($units$)$ @ $$650$ each$*$

Process Name

Shipping

$*$ Note: Given costs represent the unit material $+$ labour cost of an item at that particular stage of production $($excluding overhead cost$).$ Annual unit holding cost is historically shown to be $15\%$ of the material $+$ labour costs.

Use Microsoft Visio to draw the current state map $($CSM$)$ of the case described below. Write a report to explain the material and information flow.

Also show your calculations for the total production lead$-$time and value$-$added time as well as all the information required in the following table:

CSM

Total Production Leadtime $($days$)$

Total Value Added Time

$($minutes$)$

Number of Operators

Total annual Mtl$+$Labour Cost

Unit labour cost

Unit holding cost $($annual$)$

Your report should also contain a discussion of the wastes you see and their sources.Receives a monthly forecast from the buyer via

fax and enters it manually into the SAP system.

Receives weekly order from the buyer via fax,

Sends the $8-$week forecast to the raw material

supplier via fax,

Replenishes the raw metal sheets by weekly

orders via fax,

Generates the MRP$-$ based weekly requirements,

Sends weekly operations schedules to all the

departments.

Problem description:

LGG company is interested in implementing lean

concepts in its refrigerator production facility to

reduce its production lead time and costs. A major

step to convert its traditional production system to

a lean one is to develop the current state map. The

company produces different models of

refrigerators, but they decided to start with a

product family that contains two models: model

$301$ and model $302.$ The final products are sent

directly