In today’s changing business environment, supply chain managers are expected to effectively control and coordinate the supply, production, distribution, vending and customer service provision as a way of managing the distribution of merchandise and services within the supply chain model. For effective management of the supply chain of a business, it is essential for supply chain professionals to remain proficient to properly understand supply chain administration, areas of acquisition, production planning, provider relations, inventory control, quality administration, service administration, and transportation processes. As part of their daily responsibilities, managers should be able to identify problems that can emerge within the supply chain network and find solutions within an appropriate timeline. In this paper, two cases will be studied and analyzed: The Realco’s Breadmaker Manufacturing and the Supply Chain Challenges in Post-Earthquake Japan.

Chapter 12 Case Study: The Realco Breadmaster

The ability to quickly adapt to the changes that occur in production can impose negative impacts on the overall schedule of an organization even with the presence of a master production schedule. However, the master production schedule is a valuable tool that is used for plotting timelines for the production of commodities (McClelland, 2017). It also can project the inventory amount that a supplier should get and adopting plans and controlling the material volume of the available resources to deliver to the needs of consumers.

In the case study (Realco Bread-maker, the results show that this product has been successful. It has gained aspects such as unique features and price efficiency. Considering the fact that the product has been on high demand in the industry, the business owner wants to project how the units will be produced in a given timeline to help meet the set deadlines. For this case study, the master production schedule will be examining the parameters indicated below:

1. Develop a master production schedule for the breadmaker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco “overpromised”? In your view, should Realco update either the forecast or the production numbers?

Based on the projects of the master production schedule, it is evident that the projected ending inventory indicates the existence of excess in the inventory to achieve the demands when the numbers are increased by 20,000. Forecasting the likelihood that suppliers would ask for more inventory can serve as an accurate schedule. Based on the figures presented, it can be seen that the company has not overpromised. This is because, within the MPS, they have extra inventory to cater to an accurate increase in the production and forecast number in the process of production. However, an adjustment should be made for future productions to satisfy the demands that would be made effectively.

For the sake of product efficiency, I think that the company should be able to update their production or forecast numbers. Projection of product demand based on the needs of consumers is very critical. However, there is no need to produce goods in masses with the possibility of having some faulty products within the product line. This would mean that some products will be sent back to the company as returns due to faultiness, costing the company its reputations, customer loyalty, and profits. I think the Kanban system can serve as a good way of controlling inventory production and ensure that the products manufactured are of high quality and meets the demands of the market. The Kanban system can put limits on the inventory overstock by controlling what needs to be produced on a procedural basis. As a result of this, wastage of funds on miscues scrap from overproduction of the inventory will be limited (Jones 2014). At the same time, the warehouse space will be used productively rather than storing faulty products.

2. Comment on Jack’s approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?

Jack’s approach of promising orders to clients, as indicated in the inventory, can be resourceful for the delivery of products. However, it can come at a great expense because of the possible inefficient use of other assets and surplus stock. This means that his approach has advantages and disadvantages at the same time. It is noted that Jack is confident about the number of products to meet the demands of the customers, based on his forecast and production numbers. But Jack also needs to be concerned about the efficiency of the products in a similar manner to the production angle.

One of the advantages that Jack’s approach has resulted from the fact that within his strategy, there is the Available to Promise (ATP) ideology to the consumers which can be accomplished when the production orders are completed. With the concept of available to promise, Jack can show the number of nits present for sale every week, and those the orders promised to costumers. With the use of this system, Jack can suppose that any extra inventory in the warehouse is no issue because there is a promise of delivery.

The approach used by Jack also has its disadvantage side. One of the problems with this approach results from the fact that too much inventory can be left on the shelves in case suppliers fails to order as much as earlier projected. This can be very costly to the company because a lot of money would be lost when products are just placed on the store for some time. However, the Kanban concept can help prevent the forecasting and production scheduling issue. For instance, the Kanban system can only allow for the beginning of another production stage when the previous one has been completed (Bozarth & Handfield, 2014). This means that considering the order of consumers or suppliers, the volume of production will be done based on the orders made. As a result, the production will be made in accordance with the orders in place. This would reduce waste storage space in the warehouse.

Formal master scheduling can significantly improve this process through the use of accurate analysis of data. It can be used to indicate a hard number of the forecast product orders by tracking the concepts matching the outgoing inventory to the actual orders of customers. A scheduled receipt is considered as a type of firm planned MPS. It is a manufacturing order with specific contents; therefore, it can be regarded as a firm. The delivery of the product on a time schedule can be improved by the formal master scheduling (Plenert, 2015). An adequately organized MPS will develop product lead times that facilitate the correct booking of future deliveries.

A change will be needed within the organization, and this should come from the roles and responsibilities of product managers in regard to the inventory scheduling. For instance, rather than using a simple inventory for projection of products that should be produced in a given period to meet the demands of the market, adoption of the Kanban system coupled with the formal master scheduling would need more structural responsibilities through effective planning. Therefore, the production managers would need to perform a more thorough analysis of data and research to incorporate these two systems in forecasting (Mueller, 2015).

3. Following up on Question 2, which do you think is worse, refusing a customer’s order upfront because you don’t have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?

This is a question that many manufacturers will struggle to answer. But for me, I think it is better to refuse an order because of a lack of inventory rather than giving suppliers a broken promise to get a purchase order. Based on the ethics and values of my company, priority is given the provision of high-quality customized products to clients in the required time-frame. Managing a business is not easy. At times, orders come in when the manufacturer has an overload of production orders. On the other hand, it is difficult to turn a client away because the primary purpose of a business is to make a profit. But it is essential to communicate with the client and inform them that the company can complete the order in a given duration to avoid giving false promises. This will make the company earn customer trust and foster a good relationship between them. Even though this move may cause inconvenience to the customer or even make them leave for another vendor, our relationship has not been compromised. At least the company shall have served the client with honesty. In any business, keeping the promise and commitment of meeting the deadline and product efficiency determines how a business will perform in the long term.

With master scheduling, we would be able to determine how long production will take. With knowledge of the production timeframes, our clients can have a more accurate timeframe about how long it would take to have their orders ready.

4. Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?

It can be assumed that there would be an impact on the inventor output because of a decrease in the volume of product. This can significantly boost the finance of the company because it would enhance the saving of money in the production process. However, there is a high chance that the company may not meet the demands of consumers in the future, looking at the situation from a projection, scheduling, and planning viewpoint. In the future, Realco will have to increase their projected orders to ensure that the required resources are set aside to help meet the needs of the customers.

Chapter 13 Case Study: Supply-Chain Challenges in Post-Earthquake Japan

1. What are some of the advantages of the supply chain used in the Japanese auto industry before the March 11 earthquake and tsunami? What were some of its disadvantages?

One of the advantages of the Japanese auto industry was its ability to manufacture high-quality products and the ability and increase efficiency in the streamline manufacturing supply process. The practice aided in the reduction of inventories, freeing up cash for more profitable activities. This means that there was tight control of supplies reducing the number of vendors, thus reducing errors in the production process. On the other hand, some of the disadvantages of the supply chain used by the Japanese auto industry before the earthquake is the lack of forecast solutions to manufacturing a surplus of inventory of car parts. This was a great weakness because the industry did not consider this factor at the beginning of the production planning process. The automotive industry functioned as a complex web.

2. Is Toyota’s plan for a “foolproof” supply chain consistent with the Lean production philosophy? Explain.

With a close look at the Lean production philosophy, it is noted that it aims at preventing inventory waste. When the Japanese automotive industry suffered a great production loss, their “foolproof” plan was intended to incorporate a safety blanket to help protect the supply production along with an isolation approach that will control any future disruptions in case the tragedy occurs again. Lean principles in the supply philosophy are used to eliminate the waste in the sourcing and logistics of a firm and within the internal operations. The primary aim of the Lean principle is to examine inventory waste that can affect how the Japanese automotive industry approached the recovery of their developmental stability by producing surplus inventory. The automakers are trying to find ways of spreading risk among suppliers. Toyota designed a plan to ensure that production gets back to normal within two after an occurrence of a similar disaster. Even though the economy of Japan is declining in the midst of towering reconstruction, and a lot of money used to address the fallen Fukushima Dai-ichi nuclear plant, the automotive industry is fast improving and is on high demand.

3. Can you think of any additional ways Toyota (and its competitors in the Japanese auto industry) can improve upon the company’s plan to create a “foolproof” supply chain?

In this case, the Kangan model can be used to better the Japanese auto supply chain. The system has a capability of adding synchronization with Just in Time (JIT) inventory production. Toyota and the competitors in the Japanese auto industry would understand how much, when, how fast the inventory can be manufactured (Mueller, 2015). Even though Japan is considered as a country where severe weather is often experienced, it does not mean that inventory should be overproduced because this would result in wastes in storage.

4. What Impact do you think Toyota’s plan will have on the way it handles relationship management in its supply chain?

Toyota’s plan is intended to engage in open dialogues to find the best solutions for every person associated. They use open negotiation as a way of building rapport with the suppliers and customers, and this will result in exceptional performance. Since it was first created, Toyota has been trying to work closely with suppliers in the production and distribution processes. In good times and bad times, the company and its suppliers have stood together and have built a strong and close relationship with one another. The solid foundation that is based on a strong relationship with the suppliers has helped restore normality in the production system after the Earth in the Great East. With the recent globalization experienced in the business world, the relationship between Toyota and other partners or stakeholders will ensure that the company promotes the customer first policy.

It is essential to note that supply chain managers often experience various challenges every day. As a result, they need to understand every line of business properly. This entails accurate projection, evaluation of the MTPs and proper implementation of the Lean supply philosophies (Plenert, 2015). They are entitled to the responsibility of ensuring that companies are running effectively by controlling the movement of goods that come in and go out.

References

Bozarth, C., and Handfield, R., (2014).  Introduction to Operations and Supply Chain Management 3^rd edition. Upper Saddle River, New Jersey: Pearson Prentice Hall.

McClelland, M. (2017).  Decision Science, Order Processing and the Master Production Schedule, Atlanta Volume 19, Issue 4, pp 858-879

Mueller, M., (2015). Essentials of Inventory Management 2^nd Edition, New York, New York: McGraw-Hill Education

Plenert, G., (2015) Reinventing Lean: Introducing Lean Management into the Supply Chain. United Kingdom: Butterworth-Heinemann