Term Paper on "Manufacturing and Logistics"

Term Paper 5 pages (1823 words) Sources: 1+

[EXCERPT] . . . .

Manufacturing and Logistics

Trico is a company that manufactures windscreen wiper blades. It is located in Australia and it is the only manufacturer of this type located in this geographical location. The company is undergoing a difficult period from the point-of-view of the profits and needs to undergo some strategic changes in order to make sure that it will be able to survive in the future. These critical circumstances have been caused by a variety of reasons, both internal and external. Most of them need to be solved as soon as possible if the organization wishes to survive.

Trico is faced with a situation in which it must decide for a strategy that will prove to be efficient and efficacious from a long-term perspective. One of the options that the company has is to close down their operations, considering that the value of the activity site alone is of $5 million. The other option is to make a large investment in the development of the technology that the organization uses and the expansion of the Flexible Manufacturing Systems technology.

The latter option however has two main disadvantages. The first one refers to the fact that it is highly expensive. The second one refers to the capacity of the company itself to implement this technology. Apparently they do not yet know if the company structure and resources are enough in order to implement the FMS technology in an efficient manner. Therefore, the only thing that Trico can no do is look for other alternatives.

There are numerous problems that Trico needs to deal with. The issue is all the more challenging if one is to consider that the problems are to be found both internally and externally. The external issues include the modifications in the policy of the Australian government policy regarding the automobile industry and commerce. The internal issues affect the enterprise at all its levels, horizontal and vertical, from the company's organization, to its communication processes or the relations with the customers.

One of the problems that the Trico company faces is represented by the strong dependency on the domestic market and on the car companies. The car companies make orders on a monthly bases, but their requirements and philosophy result into large inventory stock that the company needs to store for large periods of time (a month). In addition, they often change their minds about orders and request for deliveries made as soon as possible, which messes the entire production rhythm of Trico. Depending on the rhythm of the monthly car sales, the orders of the car companies change as well.

One thing that Trico could do is diminish the periods of time that they keep the inventory stock in their warehouses. The problem is that the car companies themselves impose this condition on the organization, since they wish to make sure that they are never in danger of needing supplies and not being able to have access to them. The inventory costs the company up to $2,5 million.

One of the main clients of the company is Ford. The relation has proved to present various inconvenient aspects. For example, the department that is in charge of the purchasing process is situated at an important distance from the place where the assemblies are done. This results into small weekly changes being translated into large corrections (more time and money that are wasted).

Another problem that affects the proper functioning of Trico lies in its very production philosophy. The company is focused on the manufacturing of large batches only. The size of the batches involves a long period for their production (up to eight weeks). In addition, the production process is difficult in itself and it requires a lot of time. The processes could be speeded up, but the absence of long-term production forecasts and the changes of requirements from the part of the car companies makes this almost impossible.

A further element that makes the production processes slow and difficult are represented by the employed technology. The wipers are made of three pieces, and the production of each piece demands a certain period of time. Since the production of one certain piece proves to be more difficult and require more time, this leads to the accumulation of work in progress. As a consequence, the entire process is slowed down and the workers are under a lot of stress. Furthermore, large stocks of raw materials are created.

A third problem that Trico needs to solve regards the process through which the quality of the manufactured items is checked. It happens for the parts that have been already delivered to the warehouses to return since various have been identified in the meanwhile, even if they underwent an initial quality control. This results into more time investment, which is added to the already existing accumulation of work in progress.

Another weak point that can be observed in the functioning of Trico is represented by the reduced capacity to enter the Original Equipment Market. In addition, one can mention the capacity of the organization to develop product designs for the non-OEM market sector. As far as the design of the items is concerned, an important aspect that needs to be underlined is represented by the fact that the process phases are not clearly established from the very beginning. It often happens for design specifications to come when the production has already begun. This results into more cost issues.

The organization structure itself represents a further weak problem. The company is organized after a traditional pattern. The various departments handling the business process are separately organized (for example, the sales department, the purchasing one, the production and the engineering one, etc.). A further point that can be made from this perspective refers to the communication between departments. The departments not only do not communicate with each other, but there is a strong tendency to push the personal interest. This lack of cooperation has a negative impact upon the functioning of the company as a whole.

There business seems to be facing other issues as well. The return on assets has recorded a strong decline. In addition, the company lost the change to sign a major contract. Furthermore, the changes underwent by the policy of the Australian government aspects such as the support for mergers and the rationalization of the production facilities, are contributing to the decline of the competitive position that Trico has had in the market.

A final aspect that Trico needs to face is represented by the changing desires and expectations from the part of the customers. The car companies are demanding a quicker response to their demands in terms of delivery, product diversity and product size. What the company should do in this respect is to produce batches of smaller size. In addition, Trico should reinforce the Just in Time delivery process, while attempting at the same time to practice the direct delivery to the assembly lines. But in order to do that, there are two main aspects that need to be managed better. The first one refers to the quality of the inspection processes, that needs to be improved. From this point-of-view, the solution implies a different approach to the Human Resources policy. The staff members that are in charge of the inspection process should be either better motivated or better trained. The second aspect is related to the design processes. On the one hand, it should be made accurate right from the beginning so that major changes should not be brought once the production process has begun. On the other hand, the company should consider hiring better qualified designers in order to diversify their offer.

The company management has decided to invest a large sum of money into the development of a plant located in Wales. Consequently, pregnant issues such as the ones that have been described above, for the solving of which important amounts of money are needed, remain uncovered. A solution to get the necessary funds in order to solve these issues, or at laser part of them would be to reduce the number of employees.

The lead time of the production processes must be improved. In order for this tie b possible, the company needs to better manage the relations with the car companies, that is establish monthly requirements and stick to them. By not allowing the car companies to modify their requirements the flow of production would d become more coherent. The production process represents one of the main issues that need to be resolved as soon as possible. In order to speed it up, an investment in technology is required. Lean operations is what the company should use. In this regard, the reduction of personnel is one solution.

The linking of functions must also be considered (Purchasing, Transportation, Warehousing, Inventory, Control, Distribution, etc.).The various department must not only start to actively communicate between them, but they need to cooperate. The competition should not be between them, but oriented against the real market competitors… READ MORE

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