?The company is a vertically integrated clothing company, manufacturing, distrib
ID: 465486 • Letter: #
Question
?The company is a vertically integrated clothing company, manufacturing, distributing and retailing through its own "branded" outlets. The sector of the market it is competing in is high street fashion in the "trendy" middle price range. Competition is strong. What is "hot" today is "old hot" tomorrow, so time from "demand recognized" to "demand fulfilled" has to be as fast as possible in order to take full advantage of the volatile nature of the fashion business. The critical component in this particular sector of the industry, mostly sweaters, is color.
The company has been practicing Total Quality Management for some time and there have already been a number of Business Improvement Projects (BIPs) in this area of the business. Despite this "continuous improvement", the company's current cycle time from "demand recognized" to "demand fulfilled" is still around 47 days. The management of the copmany consider this to be far too long and want to drastically reduce the cycle time.
The attached flow diagram gives an outline of the whole process. NOTE: the cycle time referred to is the sum of the average times taken for a single sweater to pass through each stage of the process. This means that reductions in cycle time cannot be achieved by performing activities "in parallel".
The company did achieve a significant reduction in cycle time. Your task is to work out how they did it! You should assume that, as a result of the previous BIPs, the various activities are already very efficient and that the overall cycle time cannot be significantly reduced by shortening the time of each activity.
YOUR TASK:
Redesign the process. Draw the new flow of activities
To do so you should consider the following:
-What is the objective of the process?
-How would you measure the performance of the process, and what target level(s) would you set. Are these measures the ones that customers and other stakeholders in the process would agree with?
-Who are the customers and suppliers of the process, and what do they get out of it and put into it?
-What is the role of information in the process, and how does taking this element help reduce cycle times?
Explanation / Answer
Objective :
The objective of the process is to reduce the cycle time. As per the case, the process from demand recognition to the demand fulfillment takes 47 days. So, objective of the management is to reduce the cycle time to fulfill the efforts made to stay in the competitive and ever changing fashion.
Performance of the process :
The performance of the process is as per the quality standards. The processes are in compliance to the TQM standards. The company is also undergoing business improvement projects, this means that the quality standards are conforming to the specifications.
Target level(s) :
The target level is to considerably reduce the cycle time. And also, to meet the market demand much before than the present time-to-market time. The list of processes involved in the entire production cycle are :
1) Sheer the sheep
2) Spin the wool
3) Dye the wool - 10 days
4) Knit the sweaters - 10 days
5) Distribute sweaters - 10 days
6) Sell the sweaters - 10 minutes
7) Count the sales - 5 days
8) Project sales - 10 days
9) Forecast production - 2 days
Production : The delay in the production time cannot be reduced by having parallel activities at a time, but the length of the days can be reduced a bit. Say instead of ten days each for the each activity, the activity cycle for the production time can be reduced to one week each. So, instead of 20 production days, the activity gets completed in two weeks, that is 14 days.
Logistics : The logistics activity cycle takes 10 days. This activity cycle could also be reduced further to 7 days. This can be achieved by increasing the number of vehicles. If the number of vehicle loads increase on a per day wise, then this activity can be achieved in seven days instead of ten days.
Now the total number of days is reduced to 21 days instead of 30 days. There is a significant reduction in 9 activity days.
Sales : The sales activity takes 5 days 10 minutes. If this could be completed in 3 days and 10 minutes either by increasing the manpower or by increasing the working hours. If the man power is increased, then the cost increases substantially. So, increasing the working hours of each worker will only cost the company for every additional hour, and this is cheaper than hiring new workers.
By reducing the sales activity by two days, the total activity time would be 24 days 10 minutes instead of 35 days 10 minutes. This means, the activity is reduced by 11 days.
Project Sales - To account the sales of the sweaters, it takes 10 working days. This could be reduced to 7 working days by allowing the workers to work overtime.
So now the total activity time is reduced to 31 days 10 minutes instead of 45 days 10 minutes. The total reduction in the activity time is 14 days.
Forecast Production - This takes 2 days. And this is normal time for any production forecast. There is no need to reduce the time here.
The total activity time for the entire process is 33 days 10 minutes.
The stakeholders will definitely agree for such kind of a reduction in the activity time.
Customers and Suppliers :
The suppliers for this process are
1) The farmers - In providing and sheering the sheep
2) supplier of colors - for dying the wool
3) Logistics supplier - Supply of vehicles for transportation
The customers for this process are
1) Distributors / wholesalers / retailers - Sweater distribution
2) End consumers
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