Case Analysis :-

WILKINS, A ZURN COMPANY: AGGREGATE PRODUCTION

PLANNING
 Introduction

 The general manager of the Wilkins plant in Paso Robles, California has received
instructions from the head office to reduce inventory by 30% in the next quarter.
 Although inventory had been accumulating over the past years, this had been seen as a
benefit to the company for a couple of reasons.
 One is that the cost of raw materials has risen in the past year.
 The second is that the company has a policy of no layoffs, so having inventory in stock
allows the company to minimize the use of overtime and temporary workers.
 The general manager wondered whether revising the production planning process would
be enough to solve Wilkins' inventory problems.
 Company Background

 Wilkins Regulatory Company (Wilkins), a manufacturer of water control products

established by Zurn Industries in 1971.
 In 1998, Zurn merged with U.S. Industries Bath & Plumbing Products Co. and changed its
name to Jacuzzi Brands in 2003.
 It's located in Paso Robles where the departments of marketing, engineering labs and sales.
 The workforce is consisted of 70 manufacturers for sales and 52 for service center.
 Wilkins is specialized in producing water valves for backflow and water pressure, besides
manufacturing 12 different product lines with a low cost items strategy.
 Main Products :- Pressure Vacuum Breaker ( PVBs) , Fire Values.
 Target & Business Strategy

 Reduce inventory by 30% in the next
quarter without compromising current
business strategy.
 Wilkins manufactures high quality water
control products
 The company had a “no layoff” policy
and frequently used temporary workers
and overtime to meet demand during
peak periods.
 Differentiates by being responsive to
changing market needs and trends.
 FORECAST MASTER:
PRESSURE VACUUM BREAKERS (PVBS) AND FIRE
VALVES
PROD FISCAL         YEAR
LINE YEAR QI QII QIII QIV TOTAL
PVB 1999 1788 3748 5115 3167 179,634
  2000 2097 4008 5532 3123 191,880
  2001 2116 3523 5921 3374 194,136
  2002 2352 4092 6824 3968 224,072
  2003 2721 4449 7184 4531 245,506
  2004 3029 5786 9452 4231 292,465
  2005 4120 7480 9341 5983 350,012
  2006          
  2007          
             
             
FIRE VALVES 1999 36 43 18 13 1,432
  2000 47 32 34 24 1,777
  2001 21 45 19 38 1,608
  2002 36 38 28 43 1,886
  2003 42 27 25 11 1,357
  2004 22 26 28 29 1,371
  2005 43 51 51 51 2,550
  2006          
  2007          
 Aggregate Production Plan

 In First Approach a normal production rate is chosen and remains same for every quarter.
This ensures maintaining a minimum inventory level or safety stock that is needed ready
through all periods.
 The second approach is to have different production rate based on demand and current on
hand stock ( safety stock).This approach will have a variable safety stock level from period
to period.
 Recommendations

 Increase Plant usage to 3 shifts per day

 This can increase the opportunity to meet incoming customers orders.
 Minimize the need to keep inventory which can in turn reduce holding cost.
 Implementations

 Ensure the forecast master is effectively used for production planning.

 Wilkins should target a 99 per cent service on-time delivery rate to provide the
responsiveness customers expected.
 Safety Stock Inventory to be maintained to prevent stock out in case demands exceeds the
forecast or production issues were faced.
 PVB Safety stock of 99% customer service level and fire value safety stock of one week to
be maintained.
 Increase communication along supply chain by sharing forecast and aggregate production
plans.
 Expand Production capacity if required.
Thank you