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Operations Management: Research and Principles for Supply Chain and Manufacturing

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Part 1:
You have just received a phone call from a senior partner at one of the "Big Four" management consultancies. She wants to meet with you to discuss the most recent developments in Inventory Management, including JIT, MRP, ERP, and Lean operations. You suspect that her true motive is to sell a SOA (Supply Chain Opportunity Assessment) to your division and to follow that up with a new software package implementation. Nevertheless, you agree to meet with her anyway.

In preparation for that meeting, you ask your staff to participate in a brainstorming meeting. Think about the following questions:

1. How could JIT principles be incorporated in your supply chain and manufacturing operations?
2. How can you assess a MRP/ERP package's usefulness in supporting your efforts to monitor, control, and improve your inventory management efforts? What should you realistically expect of a MRP/ERP after it is first implemented?
3. What strategic or tactical opportunities can your organization pursue? If you have more than one item, be sure to prioritize your list.

Part 2:
Library research:
Your Supply Chain Manager thinks that theories taught in The Goal by Eliayhu Goldratt may have direct applicability to your company and the decisions being made. Your Supply Chain Manager is probably your most knowledgeable subordinate and is the leading candidate to replace you someday. Because you want to "stay a step ahead" of him, you decide to study the area, so you go to the Library and Internet and begin research. Read about key elements and applications of Goldratt's Theory of Constraints. Post, with explanation, at least three elements that you found most important and applicable to the company.

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Solution Summary

Just in Time principles and MRP/ERP are explained with a focus on the strategic and tactical opportunities available. In Part 2, Goldratt's Theory of Constraints is explained in detail, identifying the three measures that show if a business is making money.

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Part 1:
1. How could JIT principals be incorporated in your supply chain and manufacturing operations?

JIT principals can be incorporated in the supply chain and manufacturing operations in several ways. The two JIT principals are reduction of wastage and respect for human beings. In each manufacturing facility of your company the principal of eliminating wastage can be applied. Even though the case states that none of your competitors have quality advantage, if the JIT principle of wastage reduction is applied your firm can gain cost advantage and that will give your operations competitive advantage. The principle of wastage reduction can be applied not merely to manufacturing facilities located in the USA but also to the manufacturing facility located in Mexico.

The second principle of JIT is respect for people. The principle can be applied to the entire manufacturing process of your company in Missouri, as well as the manufacturing facility in Mexico. There are two complaints against the Mexico operations, first the plant does not deliver what is needed and sometime there are delays in delivering parts. Each of these complaints are likely to be rectified if the principle of "respect for people" is applied to the Mexico plant. The employees of your company at Mexico are likely to respond to actions that show respect towards them. The employees will endeavor to be more sensitive to the issue of accurate deliveries and timely deliveries. Applying the JIT principle of respect for people can improve the performance of the Mexico facility.

2. How can you assess a MRP/ERP package's usefulness in supporting your efforts to monitor, control, and improve your inventory management efforts? What should you realistically expect of a MRP/ERP after it is first implemented?

The MRP/ERP package helps calculate exactly what material are required, at what time and in what quantities. More sophisticated MRP/ERP packages help to do a detailed capacity planning, scheduling, and maintain shop floor control. On the other hand there are new ERP packages that provide support to most business functions like materials planning, ...

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