Reflective Analyses for Improvement of Rapid Prototyping (RP) Facility
The concept of integrating supply chain management, whereby flow of information and materials between source and user are co-ordinated and managed as a system, is now widely understood, but not widely implemented, even in a high-tech environment such as agile RP systems.
The logic of linking each step of the RP process as materials and products move towards the customer could be based upon the principles of optimisation of the supply chain performance indicators. The goal of such system would be to maximise customer service whilst simultaneously minimising costs and reducing assets locked up in the logistics pipeline.
The Case
A Rapid Prototyping facility is operating on the market for several years, but has recently started facing problems to meet the customer demands and is not satisfied by the profitability. The management is considering changing the organisational policy. They invited the consultancy group you work for to analyse the situation and suggest changes based on the SCM approach.
The facility is designed to produce and sell the following types of prototypes:
A
Functional plastic prototypes (Polyamide and Glass-field Polyamide) B
Sacrificial investment casting patterns (Wax-infiltrated Polystyrene) CS
Functional metal casting prototypes (Steel, up to 1 kg) CA
Functional metal casting prototypes (Aluminium alloy LM24, up to 3 kg) CAH
Functional metal casting prototypes (LM25 TS – precipitation hardened, up to 3 kg)
The production facilities in the RP burro are structured in two departments: SLS (Selective Laser Sintering processes) and Vacuum Investment Casting processes. The marketing survey reveals the annual demand for the above products, which is given in Table 1 along with the average prices, materials and consumables costs for each product.
ENG706s1 Supply Chain Management
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Academic Year 2012-13
Table 1. Product A B CS CA CAH Annual demand 1000 400 300 240 220 Price 320 £ 300 £ 500 £ 400 £ 420 £ Materials 60 £ 20 £ 150 £ 50 £ 60 £
The RP facility management is applying Product Mix Policy. The requested list of raw materials, work in process and finished goods inventory is shown in Table 2 below.
Table 2. Materials & consumables Quantity [kg] Value [£ per kg] Powder Polyamide 1500 3.75 Powder Polystyrene 1000 2.2 Ceramic investment powder (for Al) 3000 1.75 Ceramic investment powder (for steel) 500 3.25 Wax (infiltration and tree preparation) 50 70 LM 24 Alloy 200 2.2 LM25 Alloy 200 2 Stainless Steel 100 5.25 Ceramic crucibles 3 575 Unfinished parts inventory Average number of parts Value of the part [£] A 5 200 B 5 150 CS 4 350 CA 2 300 CAH 3 300 Finished parts inventory Average number of parts A – B 5 CS 5 CA 5 CAH 5
The following information was also gathered by the consultancy group:
? The overheads of the facilities are estimated to be 210 000 £;
? Annual sales are estimated to be 150 000 £;
? Demand varies up to 320 pieces annually;
? Because of the involvement of the RP facility in consultancy and R&D activities, the actual production time is restricted to 200 working days per year (Mon-Fri). This is in respect of both installations and workforce;
ENG706s1 Supply Chain Management
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Academic Year 2012-13
The Tasks
As a consultant of the above RP facility you should produce a detailed report, supported by calculations and the system analysis followed by appropriate comments and suggestions for improvement, including the following elements:
(i) Estimations of the inventory level of the system including: Average Aggregate Inventory Value (AIV), Weeks of supply (WS) and Inventory turnover (IT). Advise the company on the action to be taken assuming that the best inventory turnover in the company’s industry according to the benchmarking survey is 6 turns/year.
(ii) Estimations of the Economical order cycle (EOQ) for the powders if the transportation company in the supply chain is charging 100 £ per delivery sufficient to produce 50 units and the holding costs due to the material becoming obsolete are 20% of the cost of the materials. Comment on the average flow time, CI and number of orders per year. Advise the RP facility on the safety inventory policy if lead time replenishment is 5 days and cycle service level aims to achieve 90%.
(iii) Analysis and recommendations on the outsourcing policy (subcontracting possibilities) for steel castings if the price for an ‘outsource’ item is 650 £ and the fraction of the fixed costs for running the installation involved is 63000 £.
(iv) Analysis and recommendations on segmentation of the product A (Polyamide prototypes) pricing policy to: Segment 1 (high price) – receiving orders directly from customers, and Segment 2 (low price) – receiving orders through large International RP burro. The demand curve was determined to be Price = 2000 – (2.85 · Demand). Suggest prices for high and low value segments, as well as the optimal demand for each segment; support this by revenue estimates.
(v) Design Value Stream Map of the facility based on the SC approach considering that the RP facility is serving individual customers or is receiving orders from a larger RP company which subcontracts some of their services. When designing the SC structure, define the value chain components, support functions, customers and suppliers, communication and transportation means.
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43.
Book review of Capital Moves
Please be sure to address the following questions when writing your book review of Capital Moves.
What were the reasons that RCA moved a significant part of its operations from Camden to Bloomington? Compare the response and reaction of Camden workers to those at the Bloomington plant. What were the similarities and differences between workers (ethnic, racial and gender composition) at the Camden Plant and their counterparts in Bloomington? How did this influence the decisions that were being made by both corporate leaders and the union?
What does RCA?s process of continuous relocation seem to indicate for the concept and actualization of class solidarity? If the trade union movement and working class communities had taken a united stance against the company?s relocation policy could this process have been halted? If so, what needed to be done? If not, why? And even if workers didn?t try to unionize might RCA have moved anyway?
Essential aspects of how capital has prevailed in American life can be seen in the expanding hours of work, the attack on overtime pay, the constant threat of plant closures and increasingly longer periods of high unemployment rates. Many workers hold two and three low-wage positions just to make ends meet. This process has been accompanied by the steady decline in union membership and a systematic war against unions. Besides the issues of globalization, what structural feature of unions does Capital Moves offer to explain the inability of unions to pursue collective goals? How important is/are the problem? How might the structure of government in the US compound the situation?
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