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Features of Planning and Control in the Supply Chain

Planning and control system for manufacturer of air-conditioning units

In order to develop planning and control system for this manufacturer of air-conditioning units, we should discuss the peculiarities of its production system. Overall, it can be defined as a job production, which means that their devices are designed specifically for the needs of the customer (Kumar, n.d, 126). Clients can request modifications in cooling capacity, operating temperatures, and footprint.

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Thus, we can say that the management of this company is not able to standardize the air-conditioners. It should be taken into account that the variations in demand over time are rather difficult to be identified as their products, though we can hypothesize that their sales rates reach their peak in summer. Still, we have no evidence of any regular pattern. This firm cannot estimate the demand for their product in the future. We should take it into consideration that average lead-time can range from two to four month, depending on the complexity of the order and the deadline, set by the buyer. The key difficulty, faced by such firms is that they cannot use historical data during planning, in other words, they do not know the volume of their output for a month or year.

Given these facts, we can recommend variable-hour strategy. According to it, the production rate equals the demand rate (Onwubolu, 2002, p 52). Under such circumstances, the key decision variables are demand rate and average time required for the manufacturing of the unit (Graves, 1999, p 7). This model also involves setting flexible working hours. In order to develop the schedule, they need to determine workforce requirements for low and high demand seasons. One of the most important tasks of the HR management is to determine the number of regular workers, which must be always present in the office.

Judging from the above-mentioned, we can advocate the use of the so-called demand-driven execution because it ensures better compliance with the requirements of the customers and helps to decrease expenses (Hugos, 2006). It is possible to argue that this manufacturer has to buy spare parts for their air-conditioning units. This company is not self-sufficient. Therefore, it is of the crucial importance for them to select the most optimal procurement method.

Wholesale purchases are not quite suitable; as the management does not know how many orders, they will have next month or year. Therefore, it is more preferable to procure spare parts each two months. At this point, it is hardly possible to make estimation that is more accurate because we do not know even the average volume of their output per month.

As regards the control system over the process of manufacturing, we can suggest TQM (Total Quality Management) approach. This approach is particularly useful for customer-driven organizations, whose success is dependent on the ability to satisfy specific needs of the clients (Oakland, 2003, p 23; Hakes, 1991). TQM aims to improve every part of the production cycle: design, engineering, assembly, delivery, cost-effectiveness etc.

According to TQM approach, the assessment of the product is done mostly based on customer surveys. The strategy that we have described seems to be most applicable for the needs of this manufacturer of air-conditioning units. However, there is one limitation: this approach is based on the assumption that their products are seasonal. For more in-depth analysis, we need to possess quantitative data about their sales rates, number of customers and variations in demand.

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Manufacture of lawn mowers

This manufacture of lawn mowers addresses the needs of a vast target audience. Their products are in no way customized. Secondly, it should be borne in mind that the variations in demand over time have a regular patter. The main selling season begins in April and draws to its close in October. The manufacturing process can be classified as continuous production as this firm sells more or less standardized goods to the market (Kumar, n.d, 126). Although the demand for their products varies throughout a year, this firm has several advantages over others because the management can forecast at least approximant demand for the lawn mowers. Of course, it is only a short-term prognosis, but it greatly avails the company.

Level-production strategy is most suitable for this enterprise. The main peculiarity of this approach lies in the following: the production rates must correspond to market demand rates, while human resources remain at a constant level (Onwubolu, 2002, p 52). This model should be adopted because it enables to avoid increased turnover in the firm. Naturally, this can induce employees to go on paid or unpaid leaves but many of them can search for a different job.

One of the most vital aspects is the development of master schedule, which estimates the volume of production for a month. The person, who has to tailor this schedule, must take into account physical plant facilities, personnel who can operate the equipment, availability of spare parts (Kumar, n. d. 114). Again, we have to set stress on the idea that schedule can be worked out only through the careful study of demand variations over time. While drawing up a schedule, the management should not disregard the fact that at the beginning of the selling season, large stores will expect an initial main delivery. This is why prior to the commencement of the selling season the volumes of production should be increased.

As far as control methods are concerned, we can recommend the model, which is known as Good Manufacturing Practice (GMP). Its essence lies in the following: first, every part of the manufacturing process is clearly described and constantly monitored. Secondly, the management makes sure that every employee, who operates the equipment, is sufficiently trained (Sibinga et al, 1994). Furthermore, in this case, the role of inspections becomes immense.

There are some other inseparable elements of GMP; one of them is product description that should specify the functional characteristics of lawn mowers. GMP model appears to be the most applicable in this case due to the nature of the product sold by this firm. In addition to that, the management of this enterprise can employ quantitative methods in order to evaluate the quality of the manufacturing process. For instance, they should ascertain why and how often they have to make recalls of their products, if there are any. In this way, they will be able to evaluate the quality of their lawn mowers.

Manufacture of brand name food

If we are speaking about the manufacturer of brand name food, we should say that this company sells with minimum in volumes per month throughout the year. There are some variations in demand but they are minimal. The possibility of abrupt decline is rather unlikely. Consequently, they can estimate the amount of annual output. This company also exemplifies the so-called continuous production: they do not have to interrupt manufacturing process due to the low demand during this or that season. Furthermore, they can make out a regular schedule for the personnel.

This organization can also give preference to the so-called level production planning. The number of workers does not change, while the volume of output can vary, especially if demand rate changes. With the help of this method, this company will become more flexible.

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In order to plan their production process, they need to make the several steps. They need to calculate average demand per year and per month. Secondly, they should calculate the costs involved in manufacturing. Based on this analysis, it is possible to estimate workforce requirements per day. It is also necessary to consider external environment, in particular, the intensity of competition, bargaining power of buyers and suppliers, threat of new entrants and substitute products. This research technique is usually known Porters Model of Five Forces (Kahn, 2001).

It seems that Good Manufacture Practice will also be of great use for this manufacture. Actually, this model was frequently utilized pharmaceutical and food industries (Sibinga et al 1994). The thing is that the management should ensure that every part of the production process is performed in accordance with the rules established by healthcare organizations. Quality assurance department should occupy an important role in this organization. The thing is that every failure to meet these standards can result into the heavy losses for the firm, namely: numerous fines, imposed by federal agencies and most importantly dissatisfaction of the customers.

References

Cook H.E.&. Wissman L.A. 2007. Value Driven Product Planning and Systems Engineering.London: Springer.

Graves S. 1999 Manufacturing Planning and Control. Cambridge: Massachusetts Institute of Technology. Web.

Hakes. C. 1991 Total quality management: the key to business improvement : a Pera International executive briefing. NY: Springer.

Hugos. M. 2006. Essentials of supply chain management. John Wiley and Sons.

Kahn. K. 2001. Product planning essentials. London SAGE.

Kumar. Abha.(n. d.) LESSON 8 PRODUCTION PLANNING AND CONTROL. Web.

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Oakland. J.S. 2003. Total quality management: text with cases. Butterworth-Heinemann.

Onwubolu. G. 2002. Emerging optimization techniques in production planning and control. Imperial College Press.

Pierluigi Argoneto, Giovanni Perrone, Paolo Renna, Giovanna Lo Nigro, Manfredi Bruccoleri, Sergio Noto La Diega. 2008. Production Planning in Production Networks: Models for Medium and Short-term Planning. London: Springer.

Sibinga. Th Smit. Das. C. & Heiniger J. 1994 Good manufacturing practice in transfusion medicine: proceedings of the Eighteenth International Symposium on Blood Transfusion, Groningen 1993, organized by the Red Cross Blood Bank Groningen-Drenthe. Springer.

Walker. W. 2005 Supply chain architecture: a blueprint for networking the flow of material, information, and cash. St. Lucie: CRC Press.

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