Quality and Supply Chain Management
Quality and Supply Chain Management
The discussion assignment for this week includes a review of the Key Assignment Outline (Unit 4 IP) completed by one of your classmates,
Primary Task Response: Your first task is to post your own Unit 4 IP Outline to the discussion area so that other students are able to review your plan. Attach your document to the main discussion post, and include any notes you feel are appropriate. The purpose of this assignment is to help improve the quality of the Unit 5 IP you will complete next week.
Respond to Another Student: Review at least 1 other student’s Unit 4 IP Outline and provide meaningful feedback. Refrain from general feedback, such as simply stating “good job.” Your feedback to other students is most helpful if you not only point out weak areas but also offer suggestions for improvement. The best feedback takes a three-stage approach to identify what was done well, weaknesses, and areas for improvement.
You have just been hired as the director of process improvement, a new position, by the VP of Operations for the ABC Manufacturing Company. ABC has been plagued by both internal and external vendor issues; the vendor issues involved repeated late deliveries and poor quality, while internally poor deliveries to customers resulted from both vendor issues, as well as quality and scheduling issues. The CEO’s instinct is that the factory could benefit from some wide-reaching process improvements.
The VP of Operations has decided that a far greater focus on vendor quality and internal process improvements must be taken. The VP of Procurement, prior to your coming on board, had already met with the CEO’s of ABC’s 4 major vendors and alerted them that he expected them to begin turning around their quality performance. About a month prior, he had sent each a letter suggesting several formal overall quality programs that they may embark upon, which included the following:
TQM
Juran’s Trilogy
Crosby’s program
Deming’s program
Six Sigma
Part One:
The VP has already received the following responses from each of the main vendors, and he asked you, in coming months, to work with each vendor as they implement their quality initiatives.
Company A had written back that it was planning to implement the Juran program but had not yet begun.
Company B had written back that it was planning to implement the Crosby program but had not yet begun.
Company C had written back that it was planning to implement the Deming program but had not yet begun.
Company D had written back that it was planning to implement a TQM program but had not yet begun.
Company E had written back that it was planning to implement the Six Sigma program but had not yet begun.
While all Companies note plans without and current action, your task is to provide each company clarification of each respective quality initiative in terms of overall concept, methodology, pros, and cons. You are to consolidate your findings into a single report for the VP prior to communicating these to each company individually.
Part Two:
In addition, you know that as far as internal processes and overall supply chain management goes, that there may be opportunities for improvement. Currently, the following internal opportunities exist for possible process improvement:
The company communicates separately with each vendor; usually when a forecast or production change is made, not every vendor finds out the same day. This leads to confusion, excess inventories, and stock outs.
The primary method to establish the master production schedule is to use a forecast that is created prior to the beginning of the year and updated monthly using salesmen’s inputs. Invariably, the company ends up producing too much of the wrong items (not demanded) and too few of what is in demand (real customer orders).
Multistage Inventory
To create ABC’s final finished product requires a multiple-step supply chain, which looks something like the following:
Raw material to vendors factory
Vendor processes raw materials to make their parts
Those parts are shipped to ABC’s factory
ABC processes purchased parts through a succession of departments, each one adding more and more vale
Finally, all finished components are assembled into a finished product.
Currently, every step in this entire supply chain is scheduled, monitored through some kind of MRP system, reported throughout the day, and seems to take an inordinate amount of system updating.
Transportation Planning
ABC continues to use its own fleet to deliver finished goods all over the country and to have common carriers deliver parts from its vendors, also located all over the country.
Process Control, Performance, and Variability
ABC’s own internal process seem to all of a sudden go in and out of quality specifications; the company always seems to find out too late to avoid massive amounts of scrap, rejected parts, or labor costs to rework parts.
Negative and Positive Cash Flow
The company goes through frequent swings from positive to negative cash flows as inventory purchases for large lots create negative cash flows, but then using up these materials occur at a slower rate, and with less outgoing, cash flow becomes positive. The CFO really struggles with managing these cash flow swings.
Before you begin to put together a vendor visitation schedule, your boss, the VP of Procurement, advised you that the CEO expects a comprehensive report, in about a month, covering the opportunities for improvement on the above topics.
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