Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.7.1 Exercise: Improvements in Meeting Entrepreneurial Objectives

Intended learning outcomes: Identify several problems with regard to the entrepreneurial objectives for an example company that manufactures a single product. Disclose and discuss possible measures in each of the four target areas (quality, costs, delivery, and flexibility).

Review the entrepreneurial objectives in the target areas quality, costs, delive­ry, and flexibi­lity in Section 1.3.1. Your company manufactures a single product from easily obtainable components in four operations with a batch size of 5. You identify the following problems:

  • Your product does not meet the demands for product quality; returns of delivered products are frequent.
  • When demand is high, you regularly run into delivery difficulties. In addition to the problem of insufficient quality — which results in frequent rework — delivery difficulties are being caused mainly by poor coordination of the manufacturing depart­ments among themselves and with the sales department. Moreover, production at the first work center is too slow, and in-house transport cannot keep up the pace. In other areas, there tend to be too many employees, particularly in sales and distribution and quality assurance.
  • You think that there is a strong fluctuation of demand per period. However, you do not have the figures to back this up. You also do not know whether you can predict future demand reliably from the sales figures of past periods.

Discuss possible measures in each of the four target areas. For each measure, consider the amount of required investments. Decide the order in which the measures will be realized.

Course section 1.7: Subsections and their intended learning outcomes