Valles Galactic Industries (VGI) owns a small company (VGI-Durango Sur) that manufactures various electronic products for original equipment manufacturers. Customer companies provide engineering designs, materials lists, and some unique materials. VGI-DS provides labor and space for the manufacturing and assembly operations and stocking a variety of inventory items for production, such as wire, cables, some electronic components, etc. Thus, VGI-DS orders a variety of components and raw materials by contract. The labor pool is primarily composed of about 100 retirees picking up extra cash by working four to six-hour shifts. Thus, the assembly operations must be simple and easy to teach. Skilled employees must do several raw material conversions for packaging—there are currently three such employees. VGI-DS receives forecasts from VGI headquarters for planned production for two years on a rolling quarterly basis. Staff at VGI-DS develop schedules and inventory plans based on this forecast. Any customer-supplied components are shipped to VGI warehouses and then are trucked to VGI-DS. The components are inspected for quality in the VGI-DS facility. VGI-DS estimates that customers have 30-100 individual end-products (per customer) made in their plant. Often, the customer changes the forecast, and these changes can occur as late as during the week of production. VGI-DS is in the business of satisfying demand, so these changes must be handled effectively. If the forecast increases significantly, then components can be shipped overnight to facilitate the production of materials and assembly, but typically VGI-DS incurs the overnight freight costs. Schedule changes can impact both employees and machines. The plant layout is a typical process layout - machines of similar type are located together. Each machine and employee must be scheduled over the day and the standard time period size for planning is one hour. Material handling is mainly done manually, although VGI-DS would like to consider conveyors or other automation to aid in automating their processes. VGI-DS has five customers across its three major product areas but is evaluating expansion. Mullen Cryptologic Solutions (MCS) currently represents sixty percent of VGI-DS’s business and causes about seventy-five percent of the schedule changes due to constant product configuration changes. More recently, SohnCo. products have become popular through reels on Instagram, Tik Tok videos, and other outlets. This popularity is lucrative but causes supply chain disruptions for SohnCo. Thus, SohnCo. is evaluating VGI-DS as a potential supplier. This business possibility could require doubling the VGI-DS plant in size and staff. Last week, you won a proposal competition to provide VGI-DS with a comprehensive solution to their production and inventory control concerns. Discuss the solution.
Valles Galactic Industries (VGI) owns a small company (VGI-Durango Sur) that manufactures various electronic products for original equipment manufacturers. Customer companies provide engineering designs, materials lists, and some unique materials. VGI-DS provides labor and space for the manufacturing and assembly operations and stocking a variety of inventory items for production, such as wire, cables, some electronic components, etc. Thus, VGI-DS orders a variety of components and raw materials by contract. The labor pool is primarily composed of about 100 retirees picking up extra cash by working four to six-hour shifts. Thus, the assembly operations must be simple and easy to teach. Skilled employees must do several raw material conversions for packaging—there are currently three such employees.
VGI-DS receives forecasts from VGI headquarters for planned production for two years on a rolling quarterly basis. Staff at VGI-DS develop schedules and inventory plans based on this
Often, the customer changes the forecast, and these changes can occur as late as during the week of production. VGI-DS is in the business of satisfying demand, so these changes must be handled effectively. If the forecast increases significantly, then components can be shipped overnight to facilitate the production of materials and assembly, but typically VGI-DS incurs the overnight freight costs.
The plant layout is a typical process layout - machines of similar type are located together. Each machine and employee must be scheduled over the day and the standard time period size for planning is one hour. Material handling is mainly done manually, although VGI-DS would like to consider conveyors or other automation to aid in automating their processes.
VGI-DS has five customers across its three major product areas but is evaluating expansion. Mullen Cryptologic Solutions (MCS) currently represents sixty percent of VGI-DS’s business and causes about seventy-five percent of the schedule changes due to constant product configuration changes. More recently, SohnCo. products have become popular through reels on Instagram, Tik Tok videos, and other outlets. This popularity is lucrative but causes supply chain disruptions for SohnCo. Thus, SohnCo. is evaluating VGI-DS as a potential supplier. This business possibility could require doubling the VGI-DS plant in size and staff.
Last week, you won a proposal competition to provide VGI-DS with a comprehensive solution to their production and inventory control concerns. Discuss the solution.
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