Abstract
The inability of the manufacturing division at the Going, Inc. to meet the deadline is likely attributed to the inefficiency of the chosen mode of operations. The current paper argues in favor of lean process adoption. Combined with repetitive focus process type, the change is expected to eliminate unnecessary complexity, minimize delays in production, and eliminate overages and shortages of components. In addition, its compatibility with JIT inventory management approach has the potential to optimize storage and manufacturing capacity.
Introduction
Since its market entry, the Going, Inc. has experienced an unexpected surge in demand. As a result, the manufacturing division was unable to meet the deadlines, followed by the creation of overage of some parts and shortage of others. The following paper outlines the changes in mode of operations and inventory management that are expected to alleviate the encountered difficulties.
Suggested Changes
The first aspect of Going’s production that needs to be addressed is the company’s mode of operation. The data on production numbers and sales orders suggest a significant gap between supply and demand, and, more importantly, the possibility that this gap will widen in the future. Specifically, it is evident that while by 2004 the company is close to reaching its estimated maximum capacity production of 15 planes, this figure is insufficient for addressing the current average demand of 18 planes per month. In addition, it is possible to expect further increase in demand due to a clear growth trend observed throughout the three-year period (Belobaba, Odoni, & Barnhart, 2016). Therefore, it would be reasonable to suggest lean as a preferred mode of operations. The most apparent advantage offered by the proposed mode would be the reduction of excess inventory and, by extension, relocation of resources resulting in the elimination of inventory shortage (Slack, Brandon-Jones, & Johnston, 2013). In addition, lean mode of operation is expected to increase value of the offer for the customers.
As can be derived from the available information, the main advantage of the company stems from the high quality of its product and the appeal of flying an airplane with a distinct brand name. In addition, it is possible to assume that timeliness of delivery is also an important aspect. From this perspective, lean approach would allow for greater focus on value created in the process. For instance, it would be necessary to review the location strategy, which currently presents a major bottleneck in terms of alignment between planning and manufacturing since the assembly hanger and the corporate headquarters are located in different states (Dennis, 2015). Addressing this issue would allow for more efficient planning and increase overall efficiency of the production process.
Next, considering the high variety and complexity of the current inventory combined with a low number of basic final product models, it would be reasonable to suggest repetitive focus as a new process type. Plane production relies on the assembly of multiple modules that are relatively homogenized despite their complexity. Therefore, it is possible to achieve a high degree of efficiency using tightly-coordinated and organized assembly lines. Repetitive focus is also highly suitable for long-run production of products that have little variety. Since planes are highly standardized products that utilize modules as their principal parts, it would be reasonable to expect an increase in efficiency as a result of adoption of this process type.
Another advantage is the alignment of repetitive focus with just-in-time (JIT) inventory techniques. The involvement of more than 10,000 parts in the manufacturing process introduces the possibility of errors in the inventory management process and creates additional storage capacity requirements. JIT techniques will ensure that only the parts that need to be used within a short time span will arrive at the warehouse. This adjustment is expected to reduce production costs and, more importantly, reduce the time necessary to complete an order, effectively increasing the supply of products (Wild, 2017). It is also worth mentioning that JIT can be effectively integrated as a part of lean mode of operation since the latter is commonly viewed as a logical extension of the former.
It should be noted that repetitive focus is associated with relatively low requirements for employee skill level and is often used as a way to decrease education costs of the staff, which is unacceptable considering the high quality and safety requirements characteristic of the industry (Gudmundsson, 2014). However, in the scenario at hand, it can be viewed as a way of ensuring the necessary level of proficiency without a significant increase in expenses on training. In addition, repetitive focus has the potential to minimize changes in job instructions (Heizer & Render, 2016). By extension, it may reduce the risk of compromised quality of the final product resulting from excessive complexity.
Finally, it is necessary to point out the benefits of JIT approach for inventory management process. Currently, about 30% of the stock is kept in the assembly hanger, which is where all of the manufacturing activities occur. While such an approach supposedly allows for the minimization of delivery time, it also creates significant waste, especially considering the multitude of components involved in production. The introduction of JIT inventory management is expected to optimize hanger space utilization, thus increasing both storage and production capacity and, by extension, simplifying the production planning process.
Conclusion
The inability to meet the deadline in the case of Going is likely attributed to the inefficiency of the current operation mode. The implementation of lean mode would allow for the use of JIT inventory management approach and the utilization of repetitive focus process type. The suggested change is expected to minimize the complexity of inventory, increase the capacity of storage and production, and eliminate the existence of overages and shortages.
References
Belobaba, P., Odoni, A., & Barnhart, C. (Eds.). (2016). The global airline industry (2nd ed.). Chichester, England: John Wiley & Sons.
Dennis, P. (2015). Lean production simplified: A plain-language guide to the world’s most powerful production system (3rd ed.). Boca Raton, FL: CRC Press.
Gudmundsson, S. (2014). General aviation aircraft design: Applied methods and procedures. Waltham, MA: Elsevier.
Heizer, J., & Render, B. (2016). Operations management: Flexible version (10th ed.). Boston, MA: Pearson Education.
Slack, N., Brandon-Jones, A., & Johnston, R. (2013). Operations management. Thousand Oaks, CA: Pearson.
Wild, T. (2017). Best practice in inventory management (3rd ed.). New York, NY: Routledge.