Flashy Flashers, Inc.

BUAD 3020:004

Love Thy Customer As Thyself

Sarah Giles
Jarred Plazak
Melissa Osborn
Haoman Qin
Kate Truckor
Nereida Rodriguez
Joe Sessin
 Overview
Company Background
Implementation of MRP
Mission
The Problems
Production
Purchasing
Purpose
SWOT Analysis
Order Winners and Order Qualifiers
Analysis
MPS schedules
Recommendations
Conclusion
Class Question 1
What does MRP stand for and what is the
purpose of it?
Company Background
Produces a line of automotive electrical components
Serves about 75 auto parts suppliers and car dealers
Recently installed an MRP system
Should help company secure a competitive edge
Companys 2 most profitable products:
1. Automotive front sidelamp
2. Automotive front headlamp
MRP system: Material Requirement Planning
Method for the effective planning of all resources of a
manufacturing company
Provides a schedule of when components should be ordered
or produced
Implementation of MRP System
As soon as MRP system was implemented:
Hopeful it would give them a competitive edge over their
competition

1 year later:
Inventory levels had not dropped as expected
Overtime levels had not dropped as expected
Customer service was getting worse
Too many complains about late shipments

Goal:
Find out what is going wrong with the MRP system
Our Mission

write a manual MRP explosion for the side- and

headlamps for the next six weeks

identify the good and bad points of MRP

implementation Flashy Flashers

types of action notices that should be made for

order releases and adjusting priorities

making suggestions for change

Company Problems
Complaints about late shipments

No formal system of priority planning which is

creating scheduling problems on the shop floor

Experiencing too many stock-outs of purchased

parts

Marketing is taking last minute orders for

favorite customers
Production Problems

Production varies from week to week

Inventory records are often incorrect

Capacity plans are effected by often having to

produce more than planned
Purchasing Problems

Buyers are frustrated with the new system

because there is no time for creative buying

Almost all time is spent trying to follow up on

late orders

Problems with unreliable vendor lead times

which is the cause for carrying more safety stock
than necessary for certain items
Purpose

Provide data to develop the MRP records for the

two products of Flashy Flashers, Inc

Find the causes of the implementation problems

experienced by the company

Realize the value of action noticed in the

operation of an MRP system
SWOT Analysis of MRP
Strengths
Increases visibility for future facility expansions
Determines the exact amount of inventory
necessary to meet production demand
Provides managers with control over execution
system
Provides customers with accurate order delivery
dates
Can identify shortages within inventory levels
Helps managers schedule work crews to meet the
needs of the manufacturing process without
overstaffing
Determines the ideal lot sizes that should be
purchased of each component item or raw
material
Weaknesses
Does not lend to optimize materials
acquisition costs
Inventory levels are kept to a minimum
which means materials must be purchased
more frequently and in smaller quantities
which increases order costs
Firm is less likely to qualify for large
volume discounts
Because information needs to be accurate,
inaccurate information can result in
misplanning, overstock, understock, or
lack of appropriate resources
Can be costly and time consuming to set up
SWOT Analysis of MRP
Opportunities
More streamline buying patterns
Inventory levels can drop to
meet accurate production needs
without overstocking
Scheduling workers accurately in
order to not over staff
Increase customer satisfaction
Decrease complaints about late
shipments
Threats
Employees unfamiliar with new system,
which could cause human error
Unreliable lead times can occur which
would cause inaccurate delivery dates
and unsatisfied customers
Last minute orders can cause difficulties
when meeting production requirements
The data must be accurate for orders to
be placed in sync with production
scheduling of products or this can cause
shortages or surpluses of products in
inventory
Competitive Advantage and Priorities
Order-Qualifiers Order-Winners
Help?

Help?
Class Question 2
What does MPS stand for and what is its purpose?
MPS
MPS: Master Production Schedule

A time-phased plan specifying how many and

when the firm plans to build each end item
TABLE C12.2 Master Production Schedule
The following data show the MPS start dates

ITEM DESCRIPTION AND MPS PART NUMBER QUANTITY START DATE

Sidelamp (SL100E)
100 Week 13
80 Week 15
110 Week 16
Headlamp (HL200E)
120 Week 14
90 Week 15
75 Week 16
 MPS of Headlamp
HL200E

C206P HL211A HL212P

(1) (1) (1)

C206P C310P HL222P HL223F

(2) (1) (1) (1)
 MPS of Sidelamp
SL100E

C206P SL111P SL112A SL113P

(2) (1) (1) (1)

C310P SL121F SL122A SL123A

(1) (1) (1) (1)

SL131F SL132P SL133F SL134P

(1) (1) (1) (1)
Recommendations
1. Stabilize the master production schedule so that new orders
are not inserted into the schedule with less than normal lead
times

2. Synchronize the operations in the shop with the material

planners so that priorities are valid
Will require updating priorities as they change such as schedule
dates of components needed

3. Train all employees who provide information to the MRP

system and employees who are the primary users of the MRP
information in addition to those who must update the system
Everybody should be aware of the need for accurate and timely
date