Unit Three Written Assignment
MT435 Operations Management
July 25, 2011
Albatross Anchor started as a small family business of four people in the 70s and expanded quickly to a facility on 12 acres an employees of over 130. By 1989, the product line was expanded to include snag hook anchors suitable for saltwater marine crafts. This expansion of products allowed Albatross to compete internationally; however, the technology-deprived and out of date facility has run inefficiently for years causing loss on their bottom line.
a) Cost of Production:
Currently Albatross Anchors is experiencing a profit ...view middle of the document...
Due to the out of date features of the plant that encourage questionable safety, the plant operates on a batch production level meaning which volume is low. As a wholesale level manufacturer, a high volume output would be more ideal.
c) Cost of Raw Materials Sitting Idle in the Warehouse:
Limited space doesn’t allow for manufacturing high volume creating a lead time of 3 to 4 weeks on orders of large quantities. This means raw materials sit idle in the warehouse.
d) Cost of Finished Goods Sitting Idle in the Warehouse:
Shipping methods are limited to rail and large ocean-going freighters for international orders due to limits on product size, bulk, and weight and maximum load limits. The layout of the building has the only way for products to go by rail being through the receiving area slowing down the process of international shipping and allowing for finished products to sit.
2. Speed of manufacturing process from order to finished product.
Speed of the manufacturing process from the order to a finished product is extremely handicapped for a few reasons. First, the administrative offices where are orders are taken, are disorganized and run inefficiently. Second, raw materials cannot be received in a timely manner if an international order is shipping out from the same area of the facility. Third, the production of one anchor type to another requires a very long downtime to change out the machinery. Finally, the age of the facility and safety issues limit the volume of production required for a wholesaler to run efficiently.
3. Flexibility in filling order(s).
Flexibility in order filling is limited since the manufacturing of the two different anchors cannot be done in the same space. It is reasonable to assume that any additional types of anchors added to the product line would only create more inefficiency that the organization cannot afford to remain competitive.
Updating the facility with more technologically advanced office equipment and automated plant machinery would speed up the process from order to finished product.
5. Capacity and facilities
The facility must be updated at least to meet US safety and environmental standards. Not doing so could put the company out of business on those issues alone. Expansion of the building by creating separate or larger shipping and receiving areas to accommodate domestic and international orders as well as more plant space to accommodate both anchor types machinery for process to be run simultaneously would allow for larger volume output. Creating space that would allow for growth of the product line in the future would also be a smart move.
The building as it stands has an inefficient layout separating parts of the process increasing production time.
6. Service to customers (what types of services would...