Case study on Albatross Anchor
MT435 Operations Manageme
Albatross Anchor is a small family owned business located in Small Ville, MA. Albatross Anchor is located on 12 acres of land. They started out with four employees in 1976 and grow over the years to over 100. The company manufactures two types of anchors in different sizes. The types are the mushroom/bell anchor and the snap hook anchor. Albatross Anchor has many manufacturing problems which are the cause of the company not doing as well as it should be. The company build old, worn and does not meet government guidelines. Albatross can be a company of the future with the ...view middle of the document...
Cost efficient companies keep its capital, labor, and operating costs lower than its competitors. Then they must also provide a good price to its customers. Albatross Anchor should take on the method of Six Sigma This will help to achieve a level of quality, reduce costs related to scrap, rework, inspection, and customer dissatisfaction.
B. The speed of manufacturing is a slow process; this is due only being able to produce one type of anchor at a time, which is called batch manufacturing. The time to switch from one process to another is 36 hours. The plant space is limited; it does not have enough room to have enough equipment to manufacture each anchor at the same time. The company needs to implement a score card to help with the operations strategies. “The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system.”(http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx)
b) Economies of Scale:
The ability to grow and expand would lead Albatross to purchase materials in bulk. Bulk purchasing would allow Albatross Anchor to benefit from a reduced average cost per unit. “Economies of scale refers to the decreased per unit cost as output increases. More clearly, the initial investment of capital is diffused (spread) over an increasing number of units of output, and therefore, the marginal cost of producing a good or service decreases as production increases.)” (www.uslaw.com)
c) Cost of Raw Materials Sitting Idle in the Warehouse: d) Cost of Finished Goods Sitting Idle in the Warehouse: To stay competitive, Albatross needs to implement the “Just-in-time” inventory control system. This system identifies that a “finished product should be produced just in time for delivery and the raw materials should be delivered just in time for production.” (www.referenceforbusiness.com) The “Just-in-time” system is used so materials and goods never sit idle for extended periods of time. If products or materials sit for long periods of time in warehouses, Albatross is wasting money and valuable space. Inventory management is another key factor for the success of Albatross Anchors. If Albatross wants to maintain an effective inventory of their materials, regular maintenance needs to be a priority. Inventory maintenance on a regular basis needs. Success of Albatross Anchors depends on a successful inventory management system.
2. Speed of manufacturing process from order to finished product.
Albatross’ manufacturing speed needs to be improved in order to stay competitive in the industry. Albatross Anchors would benefit from the use of a computerized production scheduler, this scheduler creates schedules for the production down to the very second. Using flowcharts as well as a computer-based scheduler will take the guess work out of production and increase speed so to improve the lead...