Case Study: U.S. Stroller.
Read the US Stroller Case Study
Questions
Question 1
Provide your assessment of the current situation for US Stroller considering strategic and operation issues that they will need to respond to.
Question 2
US Stroller currently operate a 2-shift a day operation (day and afternoon shift) giving them 14 productive hours of work with some additional allowance for overtime and weekend work when required to catch up production volumes. Scrap rates are currently running at approximately 5%.
Assume that the "cut" value of each tube that goes into the manufacture of a stroller is $0.50 and there are an average of 10 such "tubes" per stroller. Under the current EOQ driven regime, tubes are cut to stock using Economic Order Quantities and then drawn from stock by the drilling workstation.
Calculate the average amount and value of tube stock holding. What is the cost impact of this amount of holding. Note: All strollers use the same tube.
Assume a JIT based Kanban system was introduced between Tube cutting and Drilling work stations. (assume they will have enough capacity to do what is required). The drilling "workstation" drills 5 tubes per minute. Assume the "workstation" consists of all the drills available
To carry a container of tubes to the drilling workstation from the cutting workstation takes approximately 30 minutes (this includes the set up time are the drilling workstation, and 20 minute to return an empty container.
If they successfully implement their JIT technique, what will be the impact on cut tube inventory amounts, values and costs.
If this was replicated across the whole process, what would be the overall impact on WIP? (ie assume the same percentage change as for tubes).
If this could be implemented between US Stroller and its suppliers and customers, what would be the impact on Finished Goods and Raw Materials? Assume HT delivery out of each warehouse with a one week transit time to customers and 1 week from factory to warehouse.
Assume a major retail store wishes to place an order for a custom "home brand" Stroller based on one of the existing Stroller models. Assuming this is slotted into the existing schedule along with their routine work, what lead time or delivery performance could US Stroller promise the retailer?
Question 3:
Discuss the advantages and disadvantages of the options presented in the case i.e. pull system vs manufacturing cells approach to implementing JIT and compare with maintaining the existing MRP/EOQ based approach.
What option do you recommend and why?
(Note: should not require any more than 2,000 words)