Nichols Company Case Study
Joe Williams is the president of Nichols Company (NCO), which manufactures three primary products and has over 355 employees. In addition, NCO has been having some issues with their supply chain in the past few months and it has affected their customer service. This paper will summarize the case study, determine NCO's appropriate forecasting technique, discuss the impact of aggregate planning, weigh NCO's various cost factors associated with carrying inventory, and make recommendations for improvement.
Mr. Williams was approached by his Director of Marketing, Mr. Barney Thompson, and announced that they had lost a large order due to a backorder of tubing, which is used during their manufacturing process. This was not the first time that that Mr. Williams has heard bad news like this recently. NCO has had a disturbing trend recently were inventory levels are too high or there have been stock outs that have resulted in late deliveries, customer complaints, and cancelled orders. In addition, overtime has become an issue because NCO's forecasting numbers have been sub-par and the employees have to stop the production run that they are currently working on, and they have to make products that are on high demand. Consequently, Mr. Williams has had enough, so he put a meeting together in an attempt to discuss the latest problems and to come up with viable solutions.
Many different organizational entities from NCO were at the meeting. Attending the meet were Allison Bright of production and inventory control, Trevor Hansen of purchasing, and Margaret Wu of accounting. The meeting was very verbal and it lasted all morning. Mr. Bright suggested that the forecast that he receives from marketing are always off, and they are always rushing around trying to expedite products in order to meet demand. Mr. Thompson believed that the company runs too lean, and they need a large inventory of finished products, which would permit his sales team to sale 20% more product. Wu, from accounting, argued that the inventory is already too high and the company can not afford to holding costs and with the way technology changes, it causes even more inventory dilemmas. Mr. Bright chimed in again as said that the have to buy in volume in order to meet NCO's stringent cost requirements. So, Mr. Williams is determined to figure out how to remedy NCO's supply chain problems.
Commencing penetration tests within the infrastructure of Alexander Rocco Corporation may be a strenuous, yet beneficial process. However, before commencing penetration tests, much planning, strategizing, and research is necessary in order to ensure successful, seamless, and legal operations. Based on information provided by the SANS Institute, an initial meeting should be coordinated between those responsible for conducting the tests, along with the appropriate leadership personnel of the company (source). Within the meeting, the scope of the project should be established, classifying company data appropriately, and determining which components of the company’s infrastructure require penetration testing, which may include Alexander Rocco Corporation’s
The current economic downfall has forced many organizations to strategically restructure and downsize. Broadway Brokers is not immune to these economic challenges and has been faced with competition from discount brokers and Internet brokerage services. Broadway Brokers position of holding the largest market share has been jeopardized by their slow reaction to the shifting changes within the industry. Broadway Brokers staff possessed strong selling and interpersonal skills however lacked in their knowledge of the high tech skills that had been inundating the market. The organizations lack of adapting to new technology and their absorbent overhead was threatening their profitability. The organization was faced with the need to restructure, consolidate, and implement employee layoffs in order to remain competitive with the current financial climate. Rumors of impending office consolidations and staff layoffs had existed for some time. However, the CEO commentary in a Financial Times article confirmed such gossip. In fact, decisions had already been made by top management to enact a structural plan that would severely curtail offices, close offices, and reduce the level of employees across the organization. Top management was firmly fixed upon downsizing and consolidation and was now relying on its management staff to come up with a plan to implement a transition. A dozen of the company’s most respected managers – everyone from assistant vice presidents to managing directors were join together to devise a plan for change (Jick & Peiperl 2003).
In the retail stores, managers are complaining of frequent stock outs even though the DC is full of merchandise, which is not moving enough through the supplier, DC, and retail stores. The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
Don Bradish was recently hired to fix scheduling issues with the new company in which he works, The Fitzgerald Machine Company. There are a few relevant facts that were given in this case study. The first and foremost fact is Mr. Bradish was hired because the company is having issue with their scheduling. This is important because he comes in with a relevant degree and years of experience with a reputable company. He is going to be looked for to find a solution to the issue outlined in the case study. The second relevant fact in the case study is that the company that The Fitzgerald Machine Company is working with is having labor issues. This is considerable because the $300,000 order is a considerably large
Rondo's Inventory Ratio declined to 9.5 in 2005, down from a ratio of 10 in 2003 and 2004. Rondo's sales improved year-over-year and the decline in inventory turns may be the result of carrying more inventory in response to increased sales. However, Rondo is still carrying too much inventory or the company may have excess obsolete inventory. Rondo needs to utilize just-in-time methods to improve inventory turn over. (Nice catch.) Carrying fewer inventories is required to improve efficiency and reduce cost. Rondo's performance is poor in this area.
Target Corporation needs to increase product availability based on the customer needs using a forecasting and supply chain
However, not everything at wheeled coach was operating so perfectly. As mentioned earlier Wheeled Coach had a major problem in excess inventory. One reason for this was that their bill of materials accuracy was way below standard. When orders were received by Wheeled Coach, the list that tells them the multiple different parts required to make the particular model of ambulance that was ordered, was listing incorrect components. Due to this mistake, a domino effect caused purchase order inaccuracy, as orders are placed according to the bill of materials. Before Wheeled Coach was able to realize that this was an issue they had stock piled copious amounts of excess materials that were not needed in current orders. The final operating failure that Wheeled Coach is experiencing is a different matter entirely. Sales forecasting is not linked to bill of material accuracy or purchase order accuracy, but Wheeled Coach’s inability to estimate their future sales has contributed to the increase ...
The furniture company Somerset needs to retain its customer service record and remedy any of its global supply chain issues before it has an adverse effect on the brand and start losing customers. With a frequent change in the product catalog, keeping an excessive inventory will cut its profit and some of the product may become obsolete even before the furniture hits the retail outlet stores. In order to achieve profit and success, business employee many strategies and the supply chain strategy are one of the operational management techniques that use analytical decision making process to achieve the company goals and provide tools to effectively compete in the market (Taylor and Russell, 2014).
Luckily, the damage was not as bad on the machine as initially thought, and after everyone at the plant worked overtime, the order was shipped very late into the evening. Working overtime is against current division policy, but was necessary to meet Bill's demand about shipping the product today. Afterwards, Alex knows he cannot dedicate the entire plant to just one order and begins to consider why the plant is underperforming when he has good people, good technology, and a good plant. Alex concludes the competition is killing him, specifically the Japanese competition, which is still beating them on price and delivery although Alex's plant has closed the gap in quality and product design. Alex has already cut costs by as much as he can but his prices are still above the competition. Also, Alex's plant has piles of inventory lying around and despite materials being released on schedule, nothing is completed and shipped out on time.
In asking the consulting firm for assistance, President Paul Willard stated that the main issue within the organization was a “power struggle between people and departments.” This is precisely where the issues in both the sales and production departments are stemming from. After analyzing the situation, several issues can be pointed out in the sales department, the first being the leadership style of sales executive vice-president Ernie Lane, the second being the dramatic shift in the work force, and the third being the lack of motivation and compensation to maintain morale, satisfaction, and productivity. Most importantly, all the problems are
Sethi, S, Yan, H, & Zhang, H. (2005) Inventory And Supply Chain Management With Forecast Updates New York, NY : Springer.
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
Another lesson of the game materialized gradually at first, but steadily became more and more evident with each round of play. This lesson was the demonstration of the overwhelming ineffectiveness and utter futility of approaching logistics from the position of total ignorance. With no forecast or sales history to serve as a guide or predictive tool, the participating supply elements simply had nothing to base their projected order quantities upon other than pure conjecture. Operating in a vacuum relative to the other players of the supply chain was nothing less than counterproductive. Closely related was the development of a subdued, but underlying, sense of hostility within the supply chain as orders were placed that didn’t correspond with anticipated amounts. When this type of communication breakdown exists in the real world, an irritation between supply elements invariably manifests itself. Additionally, the resulting waste of time, material, storing of inventory and other resources expenses further fuel the fires of frustration and discord between supply elements.
...nager) to think of idea to get many orders. They found Europe market is the way to fill the capacity. However, new orders created new bottlenecks. Consequently, two things were done. First, the inventory is increased. Second, the delivery period is increased twice than before.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which