Flashy Flashers, Inc. Sarah Giles Jarred Plazak Melissa Osborn Haoman Qin Kate Truckor Nereida Rodriguez Joe Sessin BUAD 3020:004 “Love Thy Customer As Thyself”

Overview Company Background ▫Implementation of MRP ▫Mission The Problems ▫Production ▫Purchasing Purpose ▫SWOT Analysis ▫Order Winners and Order Qualifiers Analysis ▫MPS schedules Recommendations Conclusion

Class Question 1 What does MRP stand for and what is the purpose of it?

Company Background Produces a line of automotive electrical components ▫Serves about 75 auto parts suppliers and car dealers Recently installed an MRP system ▫Should help company secure a competitive edge Company’s 2 most profitable products: ▫1. Automotive front sidelamp ▫2. Automotive front headlamp MRP system: Material Requirement Planning ▫Method for the effective planning of all resources of a manufacturing company  Provides a schedule of when components should be ordered or produced

Implementation of MRP System As soon as MRP system was implemented: ▫Hopeful it would give them a competitive edge over their competition 1 year later: ▫Inventory levels had not dropped as expected ▫Overtime levels had not dropped as expected ▫Customer service was getting worse ▫Too many complains about late shipments Goal: ▫Find out what is going wrong with the MRP system

Our Mission write a manual MRP explosion for the side- and headlamps for the next six weeks identify the good and bad points of MRP implementation Flashy Flashers types of action notices that should be made for order releases and adjusting priorities making suggestions for change

Company Problems Complaints about late shipments No formal system of priority planning which is creating scheduling problems on the shop floor Experiencing too many stock-outs of purchased parts Marketing is taking last minute orders for favorite customers

Production Problems Production varies from week to week Inventory records are often incorrect Capacity plans are effected by often having to produce more than planned

Purchasing Problems Buyers are frustrated with the new system because there is no time for creative buying Almost all time is spent trying to follow up on late orders Problems with unreliable vendor lead times which is the cause for carrying more safety stock than necessary for certain items

Purpose Provide data to develop the MRP records for the two products of Flashy Flashers, Inc Find the causes of the implementation problems experienced by the company Realize the value of action noticed in the operation of an MRP system

SWOT Analysis of MRP StrengthsWeaknesses Increases visibility for future facility expansions Determines the exact amount of inventory necessary to meet production demand Provides managers with control over execution system Provides customers with accurate order delivery dates Can identify shortages within inventory levels Helps managers schedule work crews to meet the needs of the manufacturing process without overstaffing Determines the ideal lot sizes that should be purchased of each component item or raw material Does not lend to optimize materials acquisition costs Inventory levels are kept to a minimum which means materials must be purchased more frequently and in smaller quantities which increases order costs Firm is less likely to qualify for large volume discounts Because information needs to be accurate, inaccurate information can result in misplanning, overstock, understock, or lack of appropriate resources Can be costly and time consuming to set up

SWOT Analysis of MRP OpportunitiesThreats More streamline buying patterns Inventory levels can drop to meet accurate production needs without overstocking Scheduling workers accurately in order to not over staff Increase customer satisfaction Decrease complaints about late shipments Employees unfamiliar with new system, which could cause human error Unreliable lead times can occur which would cause inaccurate delivery dates and unsatisfied customers Last minute orders can cause difficulties when meeting production requirements The data must be accurate for orders to be placed in sync with production scheduling of products or this can cause shortages or surpluses of products in inventory

Competitive Advantage and Priorities Order-QualifiersOrder-Winners Help?

Class Question 2 What does MPS stand for and what is it’s purpose?

MPS MPS: Master Production Schedule ▫A time-phased plan specifying how many and when the firm plans to build each end item

TABLE C12.2 Master Production Schedule The following data show the MPS start dates ITEM DESCRIPTION AND MPS PART NUMBER QUANTITY START DATE Sidelamp (SL100E) 100 Week Week Week 16 Headlamp (HL200E) 120 Week Week Week 16

MPS of Headlamp HL200E C206P HL211AHL212P (1)(1) (1) C206P C310P HL222P HL223F (2) (1)(1) (1)

MPS of Sidelamp SL100E C206P SL111PSL112A SL113P (2) (1) (1) (1) C310P SL121FSL122A SL123A (1) (1) (1) (1) SL131F SL132P SL133FSL134P (1) (1) (1) (1)

Recommendations 1. Stabilize the master production schedule so that new orders are not inserted into the schedule with less than normal lead times 2. Synchronize the operations in the shop with the material planners so that priorities are valid ▫Will require updating priorities as they change such as schedule dates of components needed 3. Train all employees who provide information to the MRP system and employees who are the primary users of the MRP information in addition to those who must update the system ▫Everybody should be aware of the need for accurate and timely date