Blog

Warehouse Design & Management

Module: Warehouse Design & Management

(Case Study)

Instructions to Student: 

1/ Answer each question using the case as a reference point and relevant literature sources.

Standard Motor Products is reaping the benefits of introducing JIT cellular manufacturing to its molding and finishing operations in Long Island City, NY. “We’re avoiding hundreds of thousands of dollars a month in inventory costs overall for the five JIT’ cells’ that we’re operating,” says Ray Donovan, manager of computer-integrated manufacturing at the firm. “That savings goes right to our bottom line.” At the same time, work-in-process has been cut by 94 percent and floor space by 66 percent. Lead time has fallen from 20 days to 4 days for all products manufactured in the cells. Standard knew it had to slim down on finished goods inventory. But its reputation has been based on being able to fill 97 percent of all orders for all of its many products. But to do that, it kept large inventories in finished goods, at great cost to the company, in its 400,000 square-foot distribution center in Virginia. In its Long Island City plant, Standard manufactured products in a 75-year-old, six-story building. Two miles away was a 200,000 square-foot warehouse. The company stored finished goods, components, and raw materials there. Following the implementation of JIT, Standard eliminated the New York warehouse. The company now makes and stores raw materials and components in the factory. Before JIT procedures were instituted, Standard’s molding facility was located in the factory’s basement, while the assembly and packing operations were on the first floor. The molders would mold caps and rotors. Some went directly to the assembly and packing departments, while others were shipped to the warehouse. For those that went to the warehouse, the finisher would have to order them back when needed. “The molders, and the finishers were not synchronized,” said Donovan. The molder was manufacturing many different products. To avoid setting up a 300-ton molding machine for an order of 300 parts, he would make 3,000 parts-as much as 10 months’ demand. This would then sit, unfinished, in the New York warehouse waiting to be assembled. “What we wanted to do was work strictly to customer demand and only make what the customer needs,” says Donovan. “We also wanted to integrate finishing and molding into one operation. This would cut floor space and help reduce raw materials, work-in-process, and finished goods inventories.” But to do this required radical changes in the company’s operations, from configuration of the shop floor layout, to training and attitude changes for all levels of employees and management. “Not only did Standard use JIT, they implemented cellular manufacturing in the molding department,” says Donovan. “Families of parts are produced and finished entirely in one, dedicated ‘cell’ of machinery and people. A cell is so self-contained that it is really a factory within a factory.” Under the old system, on an average day, there would be 15,000 caps as work-in-process for this family of products before the finisher could get to them. Today, it’s down to about 100 per cell. On products manufactured within the JIT cells, finished goods inventories have been reduced from two to three months to one month or less. These inventory levels have been consistently maintained for more than 10 months. Vendors now deliver raw materials weekly in small quantities instead of once every two months in large shipments. If a machine goes down, maintenance fixes it in a matter of minutes or hours instead of days. If the warehouse in Virginia actually has the desired inventory level of a product and there is no customer demand, then that product will not be manufactured. Consequently, levels of inventory at that location are now beginning to be reduced. Donovan believes any manufacturer can benefit from at least considering if JIT would help his operation. “Take a good look at your basic operation. See where the value added to a product really takes place,” he says. “Then cut out the rest. That’s how you save money. Warehouse Design & Management

JIT proponents disagree with the buffer approach. They believe that the philosophy of using inventories to overcome work stoppages or defects is a way of ignoring production problems. JIT reduces inventories in order to recouple sequential work centers into cells, forcing workers to solve problems, such as defects, as they arise. If a problem is not solved, it affects all workers, causing a large amount of disruption. In a JIT, everyone strives to eliminate problems, maintain production equipment, and increase quality to prevent a shutdown of operations.

Answer the following questions: 

1. Critically analyze the problems that existed in the strategy adopted by Standard Motor Products?
2. JIT has helped the organization come out of the situation. Elaborate?
3. What are the alternate soft wares and strategies that you would suggest for warehousing in Virginia?

[place-order]

*The structure of solving the questions above is based on these points:

Note: I hope that, the solutions will be written in an easy and simple way, because I am intermediate student level. And you must divide the number of words depending on the requirements of each question.

 Clarification on Plagiarism Policy:

1. The total amount of similar material in any form of student work from all sources put together should not exceed 15% (including direct quotations).
2. The total amount of quoted material (direct quotations) in any form of student work from all sources put together should not exceed 8%.
3. The total amount of similar material in any form of student work from a single source should not exceed 7 percent.

[place-order-2]

 Note 1: Must follow assignments instructions