Rhea Cast Production Case Study
Production does an efficient Job, and inventories have been reduced.
But danger signs are cropping up. Although no orders have been lost yet, several shipments have missed their deadlines. Customers are beginning to complain. In addition, transportation costs on incoming and outbound freight shipments are mushrooming. It is 9 a. M.
And several people are nervously sitting at the conference table. A stern-looking individual enters. Rhea Cast Production manager: Heimlich Holt, former blue-collar worker. Loves his machines and hates to see them idle.
However, beneath his “good of the corporation” exterior lies the soul of a power maniac who seeks control over traffic and supply management. Marketing manager: Harold Levi, a stereotype.
Is afraid of losing sales because of late deliveries. Generally, echoes presidential statements. Appears ready to support Heimlich Holt”s power play President: Joe Gigs, old-line type. Gigs is an extremely successful man. Has Just attended a National Industrial Conference Board IONIC) seminar and is throwing a lot of new buzzwords and thoughts around.
From his subordinates” point of view, he is dangerous. Traffic manager: Harold Tracks, another old-liner, but much less successful. Not good at verbalizing, except to quote percentage increases. His freight bills are going up, and he is being made to look bad by comparison. Supply manager: Joan Glass, much younger than her associates. Does her best.
Understands president Gigs”s words and tries to put some of them onto action. Extremely inventory conscious. Director of finance: Sol Stein, dedicated to cost reduction. Action (This is what the privileged fly observes and hears. President Gigs brings the meeting to order.
“Look at these air freight bills! Here”s one for RARE?more than the damn part is worth! I know, I checked! These things are murdering us. You must realize that in our business today, transportation has great cost-cutting potential! ” Rhea Traffic manager”s response: “l know that freight bills have risen 30 percent in the last six months, but what can I do? Miss Glass here is cutting inventories so hard that she never has anything in stock. Her short lead times force me to use airfreight.
And the way she spreads small orders, I almost never find a way to consolidate them to get volume rates. And ‘”m having the same problems on outgoing shipments.
‘”m caught in a two-bladed buzz saw! ” Supply manager Joan Glass interrupts to say, ‘Harold, we”re operating on low inventories because we save money doing it. Many times airfreight is the only way I can be sure of getting what I need on time. ” Production manager Holt comments, “And when I need something, I need it. Take spares. This ?downtime” is a very expensive proposition, and we all know it.
Further, ¶y the time Miss Glass nerve gets me needed production materials, we are so late that the only way to meet delivery dates is with overtime and the use of air freight. ” Marketing manager Levi Joins in, “Whatever the trouble, it seems there must be a way to get an efficient pipeline. If Heimlich is late, then I am late. We are losing our image as a reliable supplier. Soon, we”al be losing sales! ” Traffic manager Tracks defends himself by saying, “l don”t want to seem bitter, but it looks like ‘”m getting the short end of the stick. ” President Gigs interrupts to say, “No more excuses.
I want action! Costs must come down. ” Supply manager Glass defends herself by saying; “The lead- time problem goes right back through production and eventually to Harold”s sales forecasts. I need earlier information. ” Marketing manager Levi says, “l have to promise prompt delivery. We all know that the problem is at the other end.
” Production manager Holt suggests, “Like l”eve been saying for a long time, we should combine supply and traffic and get them closer to production. ” At this point, supply manager Glass sounds frustrated when she says, “Heimlich, we”re right back where Nee started.