Introduction
Based on the observations by Breen, the primary operational issue with Morrison Company was ineffectiveness and inefficiencies in production controls that resulted in supply shortages. Inefficiencies at the organization were attributed to deficiencies with the integrated circuits (ICs). The lengthy economic recessions had hindered chip manufacturers from upgrading their equipment and were caught unprepared when an improvement in the economy demanded more chips (Wheelwright and Paul, 2011). The outcome of this operational issue caused Morrison to delay orders by up to ten weeks.
The other major issue with Morrison Company was the stock-out incident discovered at parts picking, which had in six months tripled. Often, stock out resulted in partially completed orders, which remained as work-in-process inventories on the company’s floors and only had to be moved to the parking area due to some constraints (Wheelwright and Paul, 2011). Additionally, work-in-process inventories resulted from inlay sub-assembly, which was slowed by mechanical challenges or when the organization had to rework defects. Breen further noted that bottlenecks at the company were attributed to personalization that negatively impacted successive packaging operations (Wheelwright and Paul, 2011). The issue linked to stock-outs at the factory’s floor meant the firm had unnecessary expenses in its operations that influenced its revenue.
The company had pride in its 1 percent consumer return rate; however, the last year saw its return rate increase to 3 percent because of content delivery errors rather than manufacturing tags. The average available time per day attained its lowest, with one of the managers at the company raising their voice over reliability problems at one of the tag assembly machines (Wheelwright and Paul, 2011). Unless the company could regain its average available time, there was never turning back from the 3 percent resulting from the content delivery errors. Despite the company being a significant player in the RFID intelligent tag marketplace, it was on its downward trajectory (Wheelwright and Paul, 2011). Morrison Company was unable to identify the source of implementation changes and production difficulties that were critical in recovering from the issues faced.
Brief Description of Specific Problem
Morrison Company, a manufacturer and developer of radio frequency identification (RFID) tags, enjoyed company sales that came with the development. However, the company encountered an exacerbated push in manufacturing problems towards the end-of-year that plagued its management within the last nine months. The RFID product’s performance in the fourth quarter, aimed at retailers, was comparatively lower than they anticipated. When Shauna Breen, a recently recruited experienced operations manager, evaluated the company in search of new challenging opportunities, she uncovered operation’s performance was worse than expected. In her words, Breen says, “This is a heck way to start the New Year” (Wheelwright and Paul, 2011, 1). Breen said this as she fired up her laptop in anticipation of the next day’s breakfast discussion of the company’s operation problems with Jason Robbins, Morrison’s CEO.
Analysis of the Organization’s Operations
All manufacturing-related activities at Morrison Company took place in a single 28,000-square-foot facility, and with the building housing the administration, marketing, and engineering departments, there was no room for expansion. The other leaders had developed the surrounding lots where Morrison leased its facility already. Six principal activities defined the company’s manufacturing process:
- reception, inspection, and inventory,
- parts packaging,
- inlay fabrication and testing,
- testing, and tag assembly,
- personalization, and
- packing (Wheelwright and Paul, 2011).
While the company fabricated inlays using two fully automated RFID systems, inlay productions were rarely the system’s bottleneck.
Morrison had automated the tag assembly at the organization, which meant mounting inlays between any two material pieces involved facing and backing. As such, while facing safeguarded ICs and antennas from damage, the adhesive at the backing peeled away for the tags to be affixed to items (Wheelwright and Paul, 2011). To achieve its 20,000 units per hour rate, Morrison used ten sophisticated and large machines for assembly. The machines allowed the organization to print additional security features like invisible ink markings (Wheelwright and Paul, 2011). Personalization was included in over 70 percent of the retained products, compared to less than 15 percent of the order associated with pharmaceutical products.
Employees at the firm oversaw quality assurance at every manufacturing process step. All production supplies were inspected by receivers upon arrival and then replaced with any missing or broken parts. Material handling employees transported carts that contained work-in-process between activity areas while maintaining separate order integrity (Wheelwright and Paul, 2011). How Morrison employees operated gave a sense of solid commitment to quality.
Recommended Action Plan
In her observation, when touring the firm’s production planning and control sections, Breen noted hand-written changes posted near every machine. Towards revamping the ERP system at the organization, it is recommended the management install computer terminals at the sections, despite the cost that outweighs the benefits. Wheelwright and Paul (2011) show that Morrison Company was unable to identify the source of implementation changes and production difficulties that were critical in recovering from the issues faced. To improve on this, the company will have to improve the average available. The company will have to employ the right personnel to maintain tag assembly machines despite the cost. With the technical team in place, the company will also handle the mechanical challenges associated with stock out.
Reference
Wheelwright, S. C., & Paul, M. (2011). The Morrison Company. Brief Cases: Harvard Business School.