Assignment Problem:
Click-A-Brick (CAB) is a small to medium-sized manufacturer of mostly cement bricks. Cement is the 'glue' that holds the sand and gravel, the aggregate, together; all forming concrete. Cement is made out of limestone that is heated to drive out the water and ground into a fine powder. The same cement is used with sand and water to make mortar used for laying brick. Brick are also made of clay or shale (rock) and are formed, dried and fired into a durable ceramic product. There are three ways to form the shape and size of a brick: extrusion, molding and dry pressing. In South Africa the majority of bricks are made by the extrusion method. Bricks will vary in size dependant on the manufacturing process. The method used to form a brick has a major impact on its texture. Sand-finished surfaces are typical with molded brick. A variety of textures can be achieved with extruded brick. Brick manufacturers improve cost efficiency by locating manufacturing facilities near clay sources and use of recycled processed waste, by reclaiming land where mining has occurred and by taking measures to reduce plant emissions Click-A-Brick makes a total of 120,000 bricks per month. The total cost of producing a brick is R0.85. The bricks are supplied to building contractors erecting low-cost housing on government tender. A brick is sold at R1.35 each excluding delivery cost. CAB has a mechanically and labor-intensive plant. The operating process was designed by mechanical and industrial engineers. Even though the operation was meant to be an experimental design, it became and remained the way business was conducted. The general manager performed a competitor analysis to benchmark CAB. He discovered that the main competitors produced similar bricks at R0.65 each, almost 25% cheaper, achieving greater levels of profitability. The general manager subsequently decided to review the operational design. The "Lockdown" situation in South Africa have severely impacted the building and construction industry with the demand for bricks and other building materials having coming to a complete stand still during the initial "lock down level 5" period. As the lockdown eases slowly the demand is picking up slowly, although the demand for CAB bricks is currently only 60% of what is was prior to the Corona outbreak in late March. Another factor to consider is that many small building contractors have not survived the lockdown from a business perspective, while many small building projects have been either cancelled or postponed.
Briefly discuss the operational challenges that they face?