Five years ago, CEO John Michael took control of the Homer Manufacturing Company (HMC), an automotive parts supplier to the major original equipment manufacturers (OEMs). HMC was originally founded based on its injection molding capabilities, but over the last decade, it has taken on more assembly processes in support of its customers' demands. With the majority of the company's sales coming from the assembly area, and with competitors outsourcing much of their assembly work to Hong Kong, HMC recognizes that to remain competitive, it has to dramatically improve the assembly side of its business.
As John networks with other companies, he recognizes that a lean production system is the key to improving the company's performance. To lead this improvement initiative, he brought on board a consultant, Tripp Martin. Tripp is a lean sensei, a master teacher in lean methods. Tripp achieved sensei status during his 9-year career with a major Russian manufacturer, and he now uses the knowledge to help American manufacturers through his consulting firm, TM & Son LLC.
As HMC has grown over the last decade, it took on more assembly operations. Because these assembly operations were brought into the plant, management struggled for space and often located the assembly areas in any location where there was open floor space. That environment dramatically changed over the last several years, however; the automotive industry, driven by competitive pressures, made the decision to outsource more than 60% of its in-house assemblies to a series of outside companies. HMC was one of the recipients of that strategy.
Now that its total assembly operations are a much larger percentage of its business portfolio, HMC often finds itself either with excess material or expediting material received from suppliers at the last minute to prevent from missing a customer's deadline. HMC is in the same facility in which it started, which was originally conceived without assembly operations. As a result, the plant now has a cumbersome and inefficient layout that is causing ongoing production inefficiencies. With the potential for even more new business, John knows that Tripp Martin and the lean production system are needed to help HMC survive and grow.
John and Tripp's first order of business is to set objectives for the initiative. Because the overall goal is to improve quality, improve delivery, and reduce cost, they set the following objectives:
- Reduce direct labor costs by 35%.
- Cut production cycle time by 25%.
- Reduce inventory and inventory costs by 30%.
- Reduce expediting and obsolescence costs by 65%.
- Improve space utilization in the plant.
In 1,200 words, discuss the organizations of supply chain that you would include in the restructuring of Homer Manufacturing's supply chain. you must address the following in your report:
Explain how you would go about restructuring Homer Manufacturing's supply chain management.
In the report you must define and explain the four key drivers of supply chain management.
Explain the human factors of analysis and how this relates to customer interface and production planning.
Explain supplier design activities
Explain the concept of rapid prototyping and how it can be used as a concurrent engineering tool.
Provide at least 3 recommendations of companies that have strong supply chain management and why?
The response addresses the queries posted in 1447 words with references.
//Homer Manufacturing Company or HMC is an automated part supplier to the original equipment manufacturers. Currently, they have lots of assembly operations and they have plans to take some measures such as reduction of costs and inventory. In this paper, the key aspects of supply chain management which HMC has to deal with are discussed. The first section is about the key drivers of supply chain//
Key drivers of supply chain management:
The key drivers that run the supply chain of an organization are facilities, inventory, transportation and information. First of them is facility. It is the process of transforming inventory into another product or storing the inventory before shipping it to the next facility. The three components included in facility are location, capacity and operational design. Location can be centralized or decentralized in order to gain efficiency and effectiveness respectively. Capacity can be in excess amount with minimal or higher margins, depending on the goals of the organization. Minimal access capacity can be specific to the customer demand, while large access capacity can help in dealing with the sudden increases in the demands.
The second driving force is inventory. It offsets discrepancies between demand and supply. Inventory management and control provides visibility to the status of individual items maintained in inventory. These days, organizations use advanced software to control inventory. The primary inventory components are cycle inventory and safety inventory. While cycle inventory is the average amount of inventory which organization holds to satisfy customer demands between deliveries, safety inventory is the extra inventory held in case if demand exceeds supply (Leeman, 2010).
The third component is transportation which is about moving the inventories between different stages in the supply chain. The method and the route of transportation matter a lot in the supply chain. The organizations use today a global inventory management system that provides the ability to locate, track and predict the movement of every component or material. Both the method and the route can be applied depending on the need to improve either efficiency or effectiveness.
The fourth and the final factor contributing to the success of a supply chain management system is ...
The expert examines supply chain management and human factors of analysis.