In OPM42 assignment 1 we have identified some cardinal issues and some betterment techniques about the instance survey of Southern Paper ‘s Toccoa Mill located in Toccoa, Geogia, United States of America. Toccoa Mill is confronting some troubles due to production planning, engineering, works forces, machines, programming and quality.
In assignment 2, we will see ourselves as an operations adviser who hired by the director of the Toccoa factory, Curtis Shelton. As an operations adviser we are wanted to foreground the jobs faced in Toccoa Mill and come with some solutions about the jobs.
This study chiefly covers, issues related addition end product, cost decrease and better quality which are company ‘s desires. This chapter will cover a ranking of all the issues faced in the factory with their concluding behind their ranks. A procedure flow charts and commentary will be explained in inside informations which will cover fabrication operations and order processing agenda activities. In chapter 3, You are expected to meet simple payback analysis. Chapter 4 will cover an alternate development program divided into 2 parts as short-run and medium-term actions. In chapter 5 I will reason the study and will give some recommendations included some informations aggregations and analysis. By composing this study, I will utilize techniques and methods covered in Operations and Management 42 faculty. You are expected to detect and meet some techniques listed below ;
Procedure analysis and throughout
Performance aims and measuring
Scheduling and resources
Demand, Capacity and Forecasting
Brief History of the Toccoa Mill
Toccoa Mill is located in a town called Toccoa, Georgia, United States of America. Toccoa factory started to bring forth market mush in 1941. In 1959, factory has been bought by Louisville Paper Company. Louisville Paper Company invested capital in Toccoa factory after 8 old ages of fabricating under Louisville Paper Co. In 1984, Toccoa factory had acquired by Southern Pulp and Paper Company. By buying Toccoa Mill, Southern Pulp and Paper Company, added a new merchandise to their merchandise scope ; Bleach board. Although, Southern Pulp and Paper Company focused on the production of market mush, production of bleach board paid attending by the chief central office of Southern Pulp and Paper in Birmingham.
For a company in production environment, confronting jobs both in production and managerial countries are ineluctable. Every job needs a solution but the chief cardinal issue with the solutions is to rank them from the highest graded job to the lowest graded 1. This will besides make clip for a company to concentrate on the jobs which are more of import than remainder of the jobs. By following the ranking will besides cut down the loss of net income and minimise the clip pass on the jobs because most of the jobs are traveling to be linked with each other and betterments affect straight remainder of the jobs. In chapter 1 I will rank jobs with their logical thinking behind.
Workload on Machine # 5 and Machine # 6
For a company in production environment, machines are the chief capitals of the company because company will bring forth involvement and net income in production and fabrication via these machines. Lifespan of the machines can be extended by utilizing them with their rated capacities. Capacity direction is the reply for the job. A proper capacity direction provides the production to run into the demands of clients ( Slack ( 2010 ) )
Heizer ( 2004 ) believes that constrictions can be eliminated by increasing the machines capacity, altering the batch size, rerouting the work, altering work sequence, accepting idling at other workstations. Harmonizing to R. Sivasubramanian, V. Selladurai, A. Gunasekaran, ( 2003 ) one of the most of import issue in a synchronal fabrication system ( SMS ) is to minimise the usage of constriction resources and increase the efficient use on constriction resources. By making that there are cardinal issues related with them ;
natural stuffs deficit ;
deficiency of skilled labor and absenteeism ;
waiting line of occupations waiting for processing ;
Solving constriction issues affects direcltly the clip consupmtion of the procedure, minimise the cost of the operation and apportion the resources more efficient and besides better the programming expeditiously.
Harmonizing to Slack ( 2010 ) clients ‘ outlooks are consist of consistent quality. Operationss must be processed right in order to run into with the client demands. But this will demo assortment from an operation to another operation. Quality shows the existent operation from the point of clients if it right or non.
In add-on to that, if the quality goes up the other procedures will be affected straight by that every bit good. Besides betterment in quality shows us, the decrease in cost and grosss. By stating that ; decrease in procedure times, stock list, bit and service cost. Furthermore an betterment will be observed in productiveness and net income.
Second, in my superior Quality Control gets higher ranking than scheduling procedure because, it is clearly stated in the instance survey that if the quality of the documents or bleach boards do n’t run into the demand with the client demands and specifications, client will straight return the merchandise back. And if the client is in a crisis state of affairs, the whole bing procedure will call off due to compensation of the client ‘s loss. Since reproduction of client loss, agenda demands to be rescheduled.
Scheduling procedure replies 2 chief inquiry of the production environment. When to bring forth and how much to bring forth in a mode of clip to run into the client demands?
Furthermore, as stated by Slack ( 2010 ) , scheduling is a sequence of the procedures that done over the work and a elaborate timetable shows start and completion of the occupation. They are stated as volume and timing in fabrication environments besides some in other environments. For better production end product and for better use of the capitals that are used in the factory, a better and more elaborate agenda is needed.
Information Flow between Departments
It is clearly stated that in the instance survey, workers particularly mill scheduler is non satisfied with the scheduling done in headquarter in Birmingham, Alabama. Production contriver in headquarter does n’t pay a batch attending on optimizing the procedures in the factory. Therefore resulted as jobs in existent programming, care and production and class alterations in the machines because of the deficiency of information. Mill scheduler has more control over the cares and possible jobs can be occurred in the factory. It would be more accurate to schedule the production in Toccoa factory.
As seen in the instance survey, stock list is non one of the large issues faced in the factory. Besides the director, Shelton Curtis stated that holding a small room for an stock list forced them to transport the bringing on clip to clients and avoid a batch of work to hold a proper stock list with finished merchandises in it.
However, holding an stock list will assist to a company in fabricating environment to hold tonss of flexiblenesss in the operations. For Heizer ( 2004 ) believes that there are four maps of stock list can add flexibleness to the procedures ;
To uncouple: To apportion and utilize some parts of the merchandises in the procedures.
To hold a assorted of choices of finished goods for the clients and to ever be ready for fluctuations and fluctuations in demand.
To profit of utilizing economical order measures for extremely used points in the production.
Having an stock list will salvage the house for fluctuations of monetary value traveling up for the points that are used in the production. Besides avoid will avoid hyperbolic monetary values of merchandises.
Human Resource Strategy in Toccoa Mill
For Toccoa Mill, work force is a critical portion of the concern. As a really of import portion of the procedures in the factory, work force may non look the really first job but an of import job. Undoubtedly, without skilled and experient labors, the factory can non accomplish its ends. So it is compulsory to hold a scheme on human resources for the factory.
Heizer ( 2004 ) states ; a company needs to concentrate on 2 standards in human resource scheme ;
Use within the restraints of the operations determinations
To optimise the quality of work by developing the common committedness and trust between direction and employee.
Last Second Changes
Last 2nd alterations in the production may do really jobs for a company. It is stated in the instance by the workers that Toccoa Mill suffers because of the last 2nd alterations in production. These jobs can be solved by a proper and accurate programming program.
Market mush and Bleach Boards are produced in Toccoa Mill. Both merchandises are produced in same operations besides harmonizing to the clients ‘ petitions and merchandises ‘ ain specification. There are some different operations every bit good in the production. In this subdivision, I will explicate the operations in item from client order to the terminal finished goods.
To run the fabrication, Toccoa Mill waits until the client places an order in the Customer Service from the headquarter in Birmingham, Alabama. After client service receives the order, studies will be prepared harmonizing client demands on sum, size, brightness degree and quality. After aggregation of the studies, Customer Service will direct these studies to the Production contriver in Toccoa Mill. Production Planner in the factory puts the information in a computing machine theoretical account to acquire computation of optimum sequence, scenes and bit appraisals for the whole month. Besides Production Planner needs to analyze and organize the first hebdomad ‘s operation programs to avoid any possible upset. Besides first hebdomad ‘s production program allow for last minute alterations and orders. These production programs are sent to Mill Scheduler before the start of production. Mill scheduler checks the monthly agenda to supervise any possible jobs. If there are jobs mill scheduler demands to direct these programs back to Production Planner to work out on the programs and re-schedule production for the month and for the first hebdomad. Afterwards programs will be sent to fabricating section of Toccoa Mill. Manufacturing section will get down the production of the selected and required merchandises. If any jobs monitored, factory scheduler has the authorization to take actions and do alterations to the agenda if foreseen jobs occur.
Degree centigrades: UsersKaanDesktopOPM42 AssignemntChapter 2Order Processing and Scheduling Activities1.png
Now, I will explicate the procedures in the fabrication section that have taken topographic point to bring forth market mush and bleach board.
Degree centigrades: UsersKaanDesktopOPM42 AssignemntChapter 2Process Chart.png
2.1 Market Pulp
Timber and wood french friess stored in the wood pace till they are needed in the production. They are taken to cut down to pulps. Afterwards chemicals are assorted with mush for coveted brightness degree and bleached to want brightness degree and quality. Then market mush will be taken to mush driers or paper machine operations harmonizing on the concluding merchandise. Rolling and baleing operation will be take topographic point. At the terminal the concluding merchandise will be ship to the client.
2.2 Bleach Board
Timber and wood french friess stored in the wood pace till they are needed in the production. They are taken to cut down to pulps. Afterwards chemicals are assorted with mush for coveted brightness degree and bleached to want brightness degree and quality. Then market mush will be taken to mush driers or paper machine operations harmonizing on the concluding merchandise. Rolled operation will be take topographic point. Rolled merchandises will be taken to the last operation called bright white coating. At the terminal the concluding merchandise will be ship to the client.
Payback analysis fundamentally gives an reply to the inquiry ‘How long will the concern wage back the investing made on a peculiar concern or work? ‘ The method I will cover on this analysis will non be the best manner to analyze an investing. It has been stated that a company in a concern is more interested in the net income portion of the investing instead than merely looking merely for the payback period ( Ward, 1990 ) . Since, my computations merely give a simple reply to the inquiry above.
The equation above will be our chief equation for the computation of the payback analysis for Toccoa Mill ‘s cybernation proposal.
The cybernation proposal for the Toccoa Mill guarantees a better flexibleness in the production. One of the jobs in the factory was the clip ingestion of the class alterations due to last 2nd alterations and unplanned class alterations. Main attractive force in the proposal is, it guarantees speedy class alterations, decrease in the quality jobs and besides easy exchanging between short and long period classs. But the technology house estimated the value of the new cybernation system as $ 15,000,000. On the other manus prognosis consequences show that with the new system throughput of the machine # 5 will be increased by 25 Tonss per twenty-four hours and machine # 6 by 40 Tonss per twenty-four hours.
Throughput of the machine # 5 will be increased by 25 TPD
Throughput of the machine # 6 will be increased by 40 TPD
Average part per ton in 1995 for the machine # 5 was $ 250/ton
Average part per ton in 1995 for the machine # 6 was $ 350/ton
Harmonizing to the information given above we can cipher the payback period ;
First of all we need to cipher day-to-day influxs of the both machines, machine # 5 & A ; machine # 6 by ;
For Machine # 5 ;
For Machine # 6 ;
To happen the one-year influx of the machines we need to sum up the day-to-day influxs and multiply them by 356 yearss since factory operates 356 yearss in a twelvemonth.
As you can see in the equation above, the net one-year hard currency influx is $ 7,391,000. Now we are traveling to utilize our chief equation of payback analysis ;
The consequence indicates that the cybernation system will refund itself in 741 yearss if we convert the yearss in to old ages, it will refund itself in 2 old ages and 29 yearss. By the consequence, we can state 2 old ages and 29 yearss of period is non a long term payback period. Due to the computations, we can state that the payback period of the cybernation system investing is an acceptable investing. This investing can be considered as a medium scope investing with a medium payback period. It is apparent that the investing of cybernation system for the factory will be utile and with the new enforced system production in Toccoa factory will demo advancement of betterment in fabrication. These consequences forecasted besides can be seen in the studies of the applied scientists ‘ who are offering the computing machine integrating bundle to the factory.
However, $ 15,000,000 investing repays back in 2 old ages and 29 yearss. Our computation is non extremely accurate. As a stand-alone tool payback analysis indicates non much things. It can be really utile but simple tool to compare 2 or more investings. A company which is consider puting should besides see the clip value of the money as a net income in the hereafter to the present value. Besides the hereafter cost of the machine and the full costs cover machine ( like care, service, and energy ingestion ) should be put in to account. These costs besides need to be calculated as a future value of the cost with the future value of the net income. Besides the computations should include the hazard appraisal. That will give a proper and accurate thought to the company if it is a good investing to put on or non.
Toccoa Mill of Southern Pulp and Paper Company has faced some jobs. These jobs can be categorized in 3 chief facets ;
I will seek to develop an alternate betterment program for the jobs listed supra as short term betterment program and average term betterment program. Therefore, I will utilize the techniques, tools and theories which I have learnt in Operations Management 42 faculty. These techniques, tools and theories will steer me through the procedures for developing an alternate program.
4.1. Short-run Improvements
4.1.1 Master Production Scheduling
MPS ( Master Production Scheduling ) is the chief facet of MRP 1 system. As the name itself, MPS is covering with inquiry ‘what is traveling to be produced? ‘ Like all the companies, it is non easy to apportion capacities and resources to the operations. MPS allows the schedulers to apportion these variables to specific operations. Harmonizing to Slack ( 2004 ) MPS provides ;
Use in resources ( Labour and Equipment )
Provision of stuffs and costs
Since, the programming is a large job for Toccoa Mill, integrating of MPS will be extremely efficient and good for the factory. Since the production contriver of the factory is located in the central office in Alabama, he does n’t hold adequate information and information to optimise the production runs to minimise the class alterations.
4.1.2 Maestro Requirements Planing
Presents, diminishing the cost of the production and the production clip are the one of the most of import ends for every company in fabrication environment. By accomplishing these ends, companies assure to diminish the monetary value of the merchandise and to let clip for new operations. For this case, companies in fabricating environment demands to find the figure of parts needed for a peculiar merchandise and demands to easy understand the issues behind the jobs which cause the job. MRP I ( Master Requirements Planning ) provides these information to the companies.
To understand the chief logic of MRP I, we need to look profoundly in the parts that MRP I consist of. Harmonizing to Slack ( 2004 ) there are 8 chief parts of MRP I. These are ;
Customer Orders ( Demand )
MPS ( Master Production Schedule )
Bills of stuffs
In the instance survey it is stated that Toccoa Mill suffers from the complex assortment of client demands. With the execution of MRP I, Toccoa factory will hold easy entree to the measure of stuffs, MPS and the grounds behind the fabrication jobs.
Chase ( 2011 ) provides the information that ; a company in manufacture-to-order industry will be extremely good to hold MRP I system. Since Toccoa factory ‘s industry type can be defined as manufacture-to-order, Southern Pulp and Paper Company ‘s investing on Toccoa Mill with a MRP I system will be extremely good.
4.1.3 Human Resource Management
It is known that work related emphasis affects the quality of end products straight. The relation between work related emphasis and quality of the end product known for more than decades.So extinguishing issues caused by emphasis in Toccoa Mill is really of import fact. This can be achieved by ;
18.104.22.168 Job Design
Chase ( 2011 ) believes that occupation design is to stipulate the undertakings of workers and worker groups harmonizing to activities are managed in the administration within the consideration of engineering and demands of the company and persons.
22.214.171.124 Work Measurements and Standards
Achieving the houses criterions in production merely can be done by work measurings. Work measurings are tools for set clip criterions ( Chase 2011 ) . Allotment of capacity in production is one of the benefits and purposes of work measurings. It is besides necessary to actuate the workers by puting ends in production. These measurings besides can supply information about how the work can be improved to Toccoa Mill.
4.2. Average Term Improvements
4.2.1 Execution of Six Sigma
Six Sigma is originated and invented by Motorola in 1986. These technique consists of some tools which are aimed to diminish the mistakes in end products in every phase of the production and to minimise the variableness in the procedures. These tools are choice direction tools which can be defined as statistical quality methods.
Hammon P ( 2007 ) believes that Sig Sixma consist of 5 chief phases ;
Hammon ( 2007 ) states that Define phase consists of 2 stages ; foremost one is to outline a charter. Charter is designed and created by the undertaking patron or squad title-holder. And charter should be clearly stated with the ends and purposes of the six sigma undertaking included mileposts of the undertaking and which processes should be taken in to consideration to carry through the ends. After saying the charter loosely with it aims, the following measure is to happen out more information about the procedures which are the jobs. In Toccoa Mill, processes of doing mush in machine # 5, and altering classs in machine # 6 are the chief jobs to concentrate and implement six sigma. Besides client demands should be taken in to account while the chief intent of the execution is to fulfill the client. For our instance, the brightness degree of the merchandises, quality of the mush and bleach board and the whole rhythm consist from acquiring the order from the client to last cargo to client are the chief facets that we are traveling to concentrate on.
The procedure of fabricating paper and mush must be clearly stated as a flow chart in the study to understand the chief logic and construction of the whole procedure. We can see the flow chart below for fabrication mush and bleach board ;
Degree centigrades: UsersKaanDesktopOPM42 AssignemntChapter 2Process Chart.png
After specifying the flow chart and understand the logic of the procedures. We should concentrate on the procedures that can be the jobs. In this instance, the jobs are for mush procedures ;
Blending the chemicals with mush for coveted brightness degree
Bleaching the mush for coveted brightness degree
Pulp Dryer Operations
Paper machine Operationss
For bleach board processes ;
Blending the chemicals with mush for coveted brightness degree
Bleaching the mush for coveted brightness degree
Pulp Dryer Operations
Paper machine Operationss
Last coating for bright white coating operation
In add-on, the squad working on the execution of six sigma should analyze the client demands on the finished good and what they expect to hold. So a Critical to Quality tree should be constructed. For our instance CTQ tree is ;
Degree centigrades: UsersKaanDesktopOPM42 AssignemntChapter 4Critical to Order Tree.png
In this phase of execution we need to build measurings to supply informations and values for the following phase, analyse. This phase will supply us informations and values to get the better of the whole potency jobs and bing jobs in the fabrication environment of the factory.
Harmonizing to Hammon P ( 2007 ) we need to there are 3 chief thinks to step ;
Input signals: In Toccoa Mill, inputs are timber and wood french friess.
Procedure Measures: Costss, rhythm clip, value adding procedures, value and work force.
End products: Finished goods shipped to clients.
Input signals can be analysed and measured by workers who are working in the wood pace. The workers in the wood pace should maintain the path of quality of the stuffs which brought to the wood pace.
A study signifier about the end products filled by the client may look really simple. However, that feedback certainly gave the factory a batch of feedbacks about the quality of the merchandise. These informations and information demands to maintain under a statistical analysis plan to give us the curves and graphs about the quality of the finished goods and natural stuffs.
In procedure steps, Toccoa factory demands to put ends and aims about ;
Variation in procedures
Cycle times for each procedure
A to the full comparing between purposes and existent informations will give the information how the procedures are succeeded.
3rd phase of the execution is to analyze the informations retrieved from our measurings. In some instances, there is no demand to analyze the information because the individual who works on that procedure may cognize the existent and possible jobs. But in some instances, analysis is needed due to invisibleness of the job.
After we defined the existent and possible jobs we need to rank a fishbone tree or cause-effect diagram for every each issue. A elaborate cause-effect diagram will supply sufficient information about what may take it to a job.
Subsequently, these causes should be ranked by their costs, those with a higher cost should have a higher precedence.
Furthermore, some procedures may necessitate to be redesigned to hold bomber procedures within the procedure or the whole procedure might be re-engineered or might hold a new definition to be more compatible with the whole fabrication processes itself.
In this phase of Six sigma execution, after the analysis the list factory prepared will steer them to better the procedures. These betterments can be analysed to detect if the new betterments satisfy the factory ‘s new ends and purposes. And if they do n’t demo any advancement, they can be reengineered to carry through the ends and purposes.
This is the last phase of implementing six sigma to the concern ventures. Control phase of the execution is by and large focal points on how to keep the stability of the changed and reengineered procedures. At this phase, some of the procedures might necessitate to be redesigned and improved to keep their stability. Besides control phase is seeking for some replies and analysis to guarantee their ends to be achieved.
Harmonizing to Slack ( 2004 ) , the most of import function of an stock list is to back up the five operations aims, quality, velocity, dependableness, flexibleness and cost. First, holding an stock list allows a production line to take faster actions due to any unpredictable or predictable production jobs, quality jobs in natural stuffs and finished goods, and besides to react unscheduled production.
Undoubtedly, in an stock list a scope of merchandises and natural stuffs can be stored. These points free up buffering clip to take actions sing the job.
One of the back uping points sing to hold an stock list is, it allows company to purchase natural stuffs with the best quality when it is available in the market and these stuffs can be stored in the stock list.
Furthermore, holding and stock list will be to a company in short term but in long term will guarantee the company to salvage money and diminish the production cost. The grounds underlying, stock list allows the company to use EOQ ( Economic order measure ) for their natural stuffs. Undoubtedly, companies will derive the determination of purchasing points with the lowest cost. Second ground, it will protects the company affected by the fluctuations and rising pricess on the cost of stuffs used in the operations.
By and large, one of the jobs in a production environment is sometimes to face with critical stock-outs. However, a company invested on stock list will non impact by critical stock-outs straight. It is really of import to supply stability in a production environment.
On the other manus, stock lists have disadvantages. Slack ( 2004 ) believes that ;
By the growing in production scope in long footings, stock lists may non to match to the demand in infinite sufficiently.
Can be damaged.
In instance of any loss, it would be really expensive to re-create or re-build.
May necessitate particular handling and hive awaying systems ( forests, drugs etc. )
Extra infinite might be required due to packaging or isolation.
High insurance and administrative cost.
Inventory might be needed in several locations within the company, consequences duplicates.
In the study, I mentioned about a new development program for the factory. Now I will explicate some recommendations about some techniques can be used in the environment. The ground buttocks is there is no sufficient information in the instance survey to come up with a solution. So in this subdivision I will do some computations with the Numberss I assumed for the company.
Forecasting Activities in Toccoa Mill
Prediction is one of the tools to schedule a production. Forecasting expressions for replies to ‘When to bring forth? ‘ and ‘How much to bring forth? ‘ . Simply it is the scientific discipline of foretelling future events by taking client demands into history.
Stairss of Forecasting can be shown as ;
Degree centigrades: UsersKaanDesktopForecasting.png
For Toccoa Mill, we can presume the most suited prediction attack is a traveling norms forecast. Because if analyse the market, we can state no seasonality and fluctuations in the demands and there is no tendency observed. As Heizer ( 2004 ) stated ; if the demand in the market is reasonably steady province over clip, Traveling norms method is the method for prediction.
Traveling Averages Forecasting ;
where N is the figure of periods in the moving norm.
Traveling Averages technique is one of the simplest techniques among the prediction methods but it is extremely accurate for a concern which has low merchandise scope and has few clients.
I have covered the Southern ‘s Toccoa Mill ‘s jobs in 5 chief chapters. Ranking the job related with the production, human resource, engineering and programming are one of these jobs. By ranking the jobs I tried to demo the importance of each job due to their consequences in production and importance. I have supported my ranking with the support of the thoughts in diaries and books. In chapter 2, this study has covered the procedures which are necessary to bring forth market mush and decolor board merchandises. Payback period is found by simple payback analysis to demo the how long will it take to cover the cost by the investing. In chapter 4, I have tried to happen short term and long term solutions for the company which I ranked the jobs before. Suggestion of MPS, MRP and human resource direction are covered in the short term executions. Execution of Six Sigma and stock list suggested in average term executions. These executions are compulsory for a concern in production environment. To turn in production and to guarantee the stability in production, I extremely recommend to Southern Pulp and Paper Company ‘s Toccoa Mill to take in to account these executions. Forecasting activities are besides really of import for a company, to foretell future events easy and accurately by the aid of a prediction. I besides recommend calculating activities for the factory to obtain informations about future possible demands and make the possibility to take actions early.