Space Age Furniture Company Manufacturing

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Space Age Furniture Company manufactures tables and cabinets designed to hold microwave ovens and portable televisions. Among their products, the Saturn microwave stand and Gemini TV stand utilize a specific part, no. 3079, which requires machining on a specialized lathe. Currently, Ed Szewczak, a skilled machinist, operates this lathe. Once set up, the machine can operate with minimal supervision, but Ed must be present whenever the lathe is in use. Ed works a standard 40-hour week but has been required to work frequent overtime to meet production deadlines for part 3079, leading to employee dissatisfaction. Due to the difficulty in replacing a machinist of Ed’s experience, the company seeks solutions to reduce overtime and improve workforce stability.

Space Age has recently implemented a Manufacturing Resource Planning (MRP) system that has significantly reduced inventories and enhanced on-time deliveries. The company now produces products exclusively based on customer orders, without maintaining finished-goods inventory. The production schedule includes two subassemblies: no. 435 (used in the Gemini TV stand) and no. 257 (used in the Saturn microwave stand). Both subassemblies require part 3079 in their assembly. Orders for 1,000 units of each subassembly are due in week 1, with a lead time of one week, and no initial inventory exists for either part.

Manufacturing of the subassemblies relies on shared equipment, with a minimum batch size of 1,000 units to minimize changeover times, although capacity is not constrained. The cost of holding inventory for the subassemblies is $0.75 per unit per week. Production of part 3079 involves processing on the specialized lathe, with no setup time, but requires 0.03 hours per unit. Ed’s hourly wage is $22, with a 50% premium for overtime work. The cost to hold part 3079 from week to week is $0.25 per unit, while inventory holding costs for the subassemblies are included in the broader production considerations.

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The challenge faced by Space Age Furniture Company revolves around optimizing the manufacturing of a critical part (no. 3079) used in key subassemblies for their popular products, without overburdening their experienced machinist, Ed Szewczak, and thereby reducing costly overtime work. This situation exemplifies the complexities of production planning, workforce management, and inventory control within the context of lean manufacturing principles and modern MRP systems.

At the core of this problem is the necessity to balance capacity, costs, and workforce morale while maintaining high service levels demanded by customer orders. The company's reliance on a dedicated, highly skilled machinist reflects the specialized nature of their manufacturing process and the challenge of substituting human expertise with automation or other labor strategies. Since Ed’s expertise is difficult to replace, the company must explore alternative approaches, such as additional shifts, process improvements, or investments in automation, to alleviate his overtime burden without compromising production schedules.

Optimal scheduling of part 3079 production involves considering the order delivery requirements, processing times, and cost implications of inventory accumulation and shortages. The batch production rule of minimum 1,000 units for subassemblies emphasizes the economies of scale but may also lead to excess inventory if demand is lower than expected or fluctuates unpredictably. Given the weekly demand schedule, the production plan must incorporate safety stocks or flexible batch sizes to buffer against variability, thereby reducing pressure on Ed and improving overall efficiency.

From an inventory perspective, the costs associated with holding the subassemblies and raw parts highlight the importance of synchronized production and inventory replenishment. By aligning the machining schedule with the assembly schedule, the company can minimize idle times and reduce holding costs. Advanced techniques like just-in-time (JIT) manufacturing and strategic safety stock levels can mitigate risks of stockouts, especially considering the long lead times and batch size constraints.

Utilizing the existing MRP system efficiently involves setting accurate order quantities and timing based on demand forecasts and lead times. The system's capacity to generate precise production schedules allows for better capacity utilization and inventory control. Additionally, implementing workforce planning strategies such as cross-training or overtime management policies can help balance workload and employee satisfaction. For example, introducing secondary shifts or hiring temporary skilled labor may distribute the workload more evenly, reducing stress on Ed and enhancing productivity.

Furthermore, investment in automation, such as robotics or CNC machines, could be considered to automate the machining of part 3079, freeing skilled labor for other tasks and reducing variability in production times. Although initial capital costs are significant, the long-term savings and workforce stability could justify this approach. Alternatively, process improvements, like reducing processing times or optimizing setup procedures, can lead to increased throughput without additional labor or capital investment.

In conclusion, addressing the production constraints at Space Age Furniture requires a multifaceted approach encompassing scheduling optimization, inventory management, workforce planning, and potential capital investment. By leveraging the benefits of their existing MRP system and exploring strategic operational improvements, the company can reduce employee overtime, improve job satisfaction, and maintain high customer service levels. Effective communication, continuous process improvement, and careful capacity planning are essential to balancing production demands with workforce welfare in a lean manufacturing environment.

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