Lego Practical – Advisory Report

LEGO Practical – Advisory Report

Global Supply Chain 2018-2019

Name: Wicher Heeres                                                                                                                    

Student Number: S3812766

IEM Group 5

Introduction:

The design plan is an important aspect of the Trucks Inc Company

As a result of increased employee wages, it is decided to replace at least 30% of its current employees with flexible contracts. The goal of the design plan is to remain profit and performance of the supply chain. Later on this report I will give advice. I will discuss our experimental methods and results. Make an diagnosis and then explain some theoretical concepts. After that I will provide the design plan in the experiment and the redesign with the improvements. Then I will give some advice based on some theoretical concepts and experimental results.

Experimental methods

In the experiment we were building Lego trucks as fast as possible and with the most efficient supply chain design. The company existed of 12 people.

There was a supply/logistics warehouse, an assembly line and we had a test, repair and disassembly line. All groups were responsible for their own design plan how to let their department work as efficient as possible. We did 2 runs. The second run was with our improved design plan. Results were highly improved in the second run. The truck contains of around 70 different Lego-pieces. A client will order Lego-trucks. We will get the order and make the Lego Truck. The warehouse collects the pieces and give it to the assembly line. The assembly line will assembly the trucks. Then it goes to the test and repair line. Where it will be checked and if it has certain mistakes, it will be repaired. The trucks had several options. It can have 2 exhausts or 1. Some trucks had roof accessories and also some trucks could have an excavator. The excavator could also have options. It can have some small equipment’s at the back or it can have a bar with a light on it. It was up to the test and repair department to check this and see if the order had all the correct options. In the first run the warehouse was not able to supply all its good on time to the assembly line, what results in a long delivery time of the trucks. The difference in the design was that in the second run supply and logistics was ordered very good. Due to this the assembly line had their products on time and they can start with fabricating the trucks. In the first run the design plan wasn’t able to do this. Also the assembly line had enough employees. In this way they were able to fabricate multiple trucks at the same time. What results in a higher delivery time . The problem definition was to produce as many trucks as possible within the time that was available. While doing this it was important to limit the costs, doing everything as efficient as possible and make no mistakes.

Diagnosis

For the production of the trucks it is important that all links in the chain have an equal place so nobody is jobless. The employees need to be well informed of their jobs so the productivity of the employees goes up. In order to ensure a smooth assembly, the organisation of the transportation of the parts to the assembly employees needs to be well organised. The storage of the parts needs to be well organised too, so the logistics team are able to find the parts they are looking for as quick as possible. The disassembly team has to tear the pieces apart in different boxes so the logistics are able to sort the parts back in the warehouse rapidly, to ensure there is no shortage of parts.

Push/Pull view

The goal is to make a high profit. In order to do this you have to obtain a pull process. If the trucks order is initiated by the customer the truck can have several options that can be chosen by the customer. Also the inventories would be lower and costs will reduce. (Chopra & Meindl,2016). The pull process is also a Lean Production Tool. Lean manufacturing uses a pull system instead of a push system. With a push system, inventory needs are determined in advance and the product is manufactured to meet that forecast. Forecasts are always inaccurate, so this can result in swings between having too much inventory and having not enough inventory. Lean manufacturing is based on a pull system in which nothing is bought or made until there is demand.                    

When creating semi-finished trucks the supply chain responsiveness of the company will increase because you will create modularity to allow postponement of product differentiation. (Chopra & Meindl,2016). There will be more different trucks. On the other hand the supply chain efficiency will be lower because cost will increase by creating semi-finished trucks. More product differentiation will cost more money. More responsiveness means more costs. (Chopra & Meindl,2016)

Optimal Customer Order Arrival point (COA)

The COA point should be before the process. No trucks should be built before there is any demand for it. The pull process should be obtained. This is more realistic because trucks can be made in order to the customers demand. In this way you have less inventory and also the trucks can be personalized by the customer themselves.

Lean manufacturing starts with an analysis of all value-adding activities (Wortmann,2018). If something in the supply chain doesn’t add any value, it is considered as waste, Also known as ‘muda’. In the supply chain every step needs to adds a certain kind of value. It is apparent in our supply chain. We try to do as less as it needed to create the best truck. This can help achieve resulting profits because there won’t be any unnecessary costs.  

Lean manufacturing is an approach where continuous improvement is practiced by involving employees at all levels (Wortmann,2018). Involve every employee in different levels. Due to this the supply chain will be more continuous. This will results in a higher supply chain surplus (Chopra & Meindl,2016). The goal will of remaining profits will be easier reached.

Just in time means that having stocks is a result of having problems. All problems results in stocks. So having stocks are a symptom of having problems (Wortmann,2018). To many stocks should not be in the supply chain. This costs a lot of money. Due to this the goal of remaining profits will not be reached.