In
the model proposed by de Treville
et al. (2012), processes must be configurated to ensure a capacity buffer,
small lot sizes and elimination of non-strategic variability.

To
ensure a capacity buffer to cover for special tenders and business growth
opportunities, Acme must considerate two actions. First, it must increase raw
components stock to ensure a service level that goes along the with finished
goods service level. Section 7 proposes to use an order-up to model for raw
components replenishment. Second, it must ensure a capacity buffer at the
production site. Manufacturing finished goods at Acme is the second highest
time of the process. Therefore, we propose that Acme focuses on restructuring
the manufacturing process into cells, so that capacity for each cell would be
easier to measure in terms of volumes. The objective is to match capacity with demand,
and peak demand would be cover by overtime, as it is currently the case.  Having a capacity buffer for production will
reduce utilization of resources and decrease the waiting time of a product to
be produced.

Lot
sizes play a significant role to efficiently reduce lead time. Logically, if a
production batch is big, the first item of the batch being produced must wait
for the last item to be produced in order to go to the next process step. When
more steps are added in the process, the longer the lead time will be.
Currently, Acme works with a batch production size of 10 pieces when finished
goods’ demand is higher than 10. As most of the portfolio has low-volumes
items, Acme is flexible when demand is lower than 10, offering batch sizes
according to the demand. Therefore, company should keep the same lot sizes
policies.

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A
time-based organization must eliminate non-strategic variability of the system
and exploit strategic variability, which comes from
unexpected changes in demand that are fulfilled without degradation of service
(Suri, 2010). The importance of running a consistent process will keep work
flow smoothly. Therefore, to tackle the non-strategic variability, both
organizations need to focus on improving the overall process documentation,
which includes an effective communication of short and long-term forecast,
stabilization of priorities for the short term, and standardization of
production processes. In addition, both companies need to be engaged in
continuous improvements projects that could reduce lead time effectively. For
periods with low demand, employees should dedicate time and efforts to solve and
prevent issues in the manufacturing site.

For
DePuy Synthes, two processes can be improved. For the ordering process, which takes
one week but the tack time is only one day, initiatives such as implementation of
a faster PO release through the system and with shorten approval times, will reduce
the lead time of this process. For the warehouse processes, initiatives to release
faster Acme’s product to customer are possible as quality inspection is less problematic
that the rest of the medical devices. Therefore, creating a process to book the
goods and send them directly to warehouse in order to ship directly to customers

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