Case study on scheduling
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Case study on scheduling

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    Case study on scheduling Case study on scheduling Document Transcript

    • NewGate India Hyderbad, Andhra Pradesh- 500038 Website: www.newgate.in Email: contact@newgate.in Slideshare URL : http://www.slideshare.net/newgateindiaProduction & Operations Management Case Study: Distribution Transformer Company Limited
    • Case Summary DTCL (Distribution Transformer Company Limited) is a Transformer manufacturingCompany dealing with Power Sector. Earlier it used to concentrate mainly on the domesticmarket but after facing severe financial crisis owing to delayed payments of the Stateelectricity Board, it channelized its efforts to tap the export market especially the South-AsianMarket which had huge scope. With Company’s export growing to INR 1 billion, theyexpanded their export business to Distribution Transformer with the already existing SinglePhase Transformer. With the Company going global, the number of the Customers and theirspecifications increased manifolds. The Engineering Department of the Company is thusfacing several issues with specifications of the new materials which results in increased lead-time and also rejection of material at the last moment due to Quality Issues. Owing to thesereasons, The Company is finding it difficult to comply with the Orders in time, thereby endingup paying huge amount as penalty. DTCL soon realized that this will threaten their position in the global market andcompeting with the World Players will be even more difficult. DTCL, thus, set up a Team toestimate the time required for the accomplishment of an order. Thus, focusing on overalllead time reduction to reduce cost and improve efficiency of Order fulfillment became eveneasier. The team was also supposed to come up with options by which orders can be fulfilledin a much efficient manner. The team identified the entire set of activities involves in theorder fulfillment as summarized below:-A list of activities for execution of an order at DTCL Activity no. Description 01 Processing and circulation of customer order 02 Preparation of customer drawings 03 Customer drawings to marketing 04 Checking and forwarding to customer 05 Getting approval from customer 05’ Customer comments 06 Preparation of manufacturing drawings 07 Issuing manufacturing drawings to planning 08 Issue from planning to other departments 08’ Revision 09 Material procurement-prototype 10 Processing tools required for manufacturing 11 Manufacturing- prototype 12 Material processing-final order execution 13 Manufacturing-final order execution 14 Organizing customer inspection through marketing 16 Dispatch Page | 2
    • After the Order has been placed by the Customer, the Marketing Department reviews it and sends it to all Departments involved. The Engineering Department starts preparing the Electrical Design which is sent for approval from the Customers. If approved they are sent back to the Engineering Department and if otherwise Marketing and Engineering Department addresses the Issues within 3 days. Along with the process of the approval, the Engineering Department parallel prepares the Manufacturing Drawings and informs the Materials Department regarding Material Requirements to accomplish the Order. After the Manufacturing Drawings are approved, they are being sent to the PPC (Production Planning and Control) Department which in turn issues the Drawings to the Concerned Department. Revision to the Drawings and Distribution of BOMs (Bill of Materials) is followed by the Procurement of the by the Procurement of the Materials. Based on the tentative dates of Job-Completion, the Marketing Department is informed to organize for Customer inspection following which the Dispatching of the Products takes place. Based on the steps discussed above, the data was collected for a sample of 4 orders which are discussed in details later.Assumptions taken in case  An activity named 05 was taken for Customer comments which was mentioned in the case but not included in the table. Its time was 3 days. So a constant 3 days activity time was assumed for all the 4 orders.  An activity named 08’ was taken for Revision which was mentioned in the case but not included in the table. Its time was 2 days. So a constant 2 days of activity time was assumed for all the 4 orders.  An activity named 14 named Organizing customer inspections, no time was mentioned for it. So we assumed a time of 3 days for all the 4 orders. The Sample of 4 orders is given below in the following table:- Page | 3
    • Order execution details: a sample analysis Activity Description Domesti Domesti Average Export Export Average of no. c order c order of order order Export 1 2 Domestic 1 2 order order Processing and 01 circulation of 2 2 2 3 3 3 customer order Preparation of 02 customer 30 18 24 13 16 14.5 drawings Customer 03 drawings to 2 3 2.5 1 1 1 marketing Checking and 04 forwarding to 2 1 1.5 3 3 3 customer 05 Getting approval 447 98 272.5 396 93 244.5 from customer 05’ Customer 3 3 3 3 3 3 comments Preparation of 06 manufacturing 400 120 260 400 23 211.5 drawings Issuing 07 manufacturing 2 3 2.5 17 1 9 drawings to planning Issue from 08 planning to 1 2 1.5 2 1 1.5 other departments 08’ Revision 2 2 2 2 2 2 Material 09,10,1 procurement- 603 228 415.5 486 167 326.5 1 (prototype, final order execution) Manufacturing 12,13 (prototype, final 341 160 256.5 36 5 20.5 order execution) 14 Inspection 3 3 3 3 3 3 15 dispatch 8 130 69 18 15 16.5 Page | 4
    • QuestionsQ1) Develop a network representation of the execution of an order for distribution transformers at DTCL. Ans : The network is drawn by both AON and PERT diagrams. The PERT chart is as follows for the ordering. The AON chart is as follows for the ordering. Page | 5
    • Q2) Use the network and develop time estimates for execution of the order. What are the key activities that require better managerial control? Ans: The critical path of both the domestic order and export order are drawn. Then the critical activities are decided from the PERT chart.Domestic Orders The critical path is 1,2,3,4,6,9,10,11,7,8,8’,12,13,14,16  These are the activities which require better managerial control and can be crashed.  The time allocated with each activity can be optimized. Total lead time = 1034 days The real float associated for 05 is 403 days.Export Orders Page | 6
    • The critical path is 1,2,3,4,6,9,10,11,7,8,8’,12,13,14,16  These are the activities which require better managerial control and can be crashed.  The time allocated with each activity can be optimized. Total lead time = 612 days The real float associated with 05 is 294 days. Q3) Can you identify activities that require immediate attention in order to reduce execution time. How can DTCL organize the manufacture of transformers so that there will be a significant reduction in execution lead time Ans: AON chart is drawn. The group activities are divided into workstations. The balance delay for both the ordering process is found out.Domestic Orders Domestic with 3 workstations The three workstations are engineering drawing department, marketing department and the production department. The AON chart is as follows W1 W2 W3 Work Station (Engineering (Manufacturing (Purchasing Dept.) Dept.) Dept.) Activities 01,02,03,06,07 04,05,05,14,16 08,08,09,10,11,12,13 Order Time 291 349 669.5 Page | 7
    • Total Processing TimeTp = 291 + 349 + 669.5Tp = 1309.5 daysCycle timeCL= Max (T1, T2, T3) = Max (291, 249, 669.5)CL = 669.5 daysBalance DelayBd = (n CL - Tp)/ nCL X 100 = (3 X 669.5 – 1309)/ (3 X 669.5 )Balance Delay = 34.82%Domestic with 4 workstations The four workstations are engineering drawing department, marketing department,production department and the procurement department. The AON chart is as follows W1 (Engineering W2 (Manufacturing W4 (ProcurementWork Station W3 (Purchasing Dept) Dept.) Dept.) Dept) Activities 01,02,03,06,07 04,05,05,14,16 08,08,12,13 09,10,11Order Time 291 days 349 days 254 days 415.5 daysTotal Processing TimeTp = 291 + 349 + 254 + 415.5Tp = 1309.5 days Page | 8
    • Cycle time CL= Max (T1, T2, T3, T4) = Max (291,249,254,415.5) CL = 415.5 days Balance Delay Bd = (n CL - Tp)/ nCL X 100 = (3 X 415.5 – 1309 )/ (3 X 415.5) Balance Delay = 21.23%Conclusion of Domestic Order From both the AON chart it is visible that in the case of domestic orders, the number of workstations should be four as it generates less balance delay. As the number of workstations is increased to 4, the balance delay is decreased by 39%. 1. The activities that require immediate attention is the procurement department as it take 415.5 days. 2. It can be done by proper vendor management which helps the following ways:  By ensuring delivery on time  Properly forecasting the expected demand  Adopting practices to reduce time on logistics  Better inventory management of raw materials with proper defined reorder level.Export Orders Export with 3 workstations The three workstations are engineering drawing department, marketing department and the production department. The AON chart is as follows Page | 9
    • W1 (Engineering W2 (Manufacturing Work Station W3 (Purchasing Dept) Dept.) Dept.) Activities 01,02,03,06,07 04,05,05,14,16 08,08,09,10,11,12,13 Order Time 239 days 270 days 350.5 daysTotal Processing TimeTp = 239 + 270 + 350.5Tp = 859.5 daysCycle timeCL= Max (T1, T2, T3) = Max(239, 270, 350.5)CL = 350.5 daysBalance DelayBd = (n CL - Tp)/ nCL X 100 = (3 X 350.5 – 859.5) / (3 X 350.5)Balance Delay = 18.26%Export with 4 workstations The four workstations are engineering drawing department, marketing department,production department and the procurement department. The AON chart is as follows Page | 10
    • W1 Work W2 (Manufacturing W3 (Purchasing W4 (Procurement (Engineering Station Dept.) Dept) Dept) Dept.) Activities 01,02,03,06,07 04,05,05,14,16 08,08,12,13 09,10,11 Order Time 239 days 270 days 330 days 20.5 days Total Processing Time Tp = 239 + 270 + 330 + 20.5 Tp = 859.5 days Cycle time CL= Max (T1, T2, T3, T4) = Max(239, 270, 330, 20.5) CL = 330 days Balance Delay Bd = (n CL - Tp)/ nCL X 100 = (3 X 330 – 859.5 )/ (3 X 330.5) Balance Delay = 34.88 %Conclusion of Export Order From both the AON chart it is visible that in the case of export orders, the number of workstations should be three as it generates less balance delay. As the number of workstations is increased to 4, the balance delay is increased by 91%. Page | 11
    • 1. The activities that require immediate attention is the production as it take 350.5 days. 2. It can be done by proper optimizing the process which helps in • By avoiding abnormal wastage • Reducing the error or failure rates • Finding optimal product mix strategies • Maintaining a constant lead time and safety stockOverall Conclusion 1. More emphasis has to given to the critical activities than that of slack activities. 2. The number of workstations in domestic orders should be made four and in export orders it should be three for better optimized use of the resources. Page | 12