Value of Information Sharing Between and Among the Functional Departments: An Insight*

Value of Information Sharing Between and Among the Functional Departments: An Insight

The General Manager – Operations (GM) of a small scale company M/s XYZ Company had was employing most of his working hours resolving conflicts between various functional departments than to focus on planning for the capacity addition, modernizing of the shop floor and identifying ways of improving the competitiveness of the company. Apart from the conflicts the other problems that he was facing was long lead time, delay in deliveries, customer complaints regarding the quality, high inventory
of raw materi.

XYZ Limited: Company Background

M/s XYZ Limited was an ISO certified small scale manufacturing company. The company had ten departments namely, Marketing, Design, Personnel, Finance, Purchase, Production Planning and Control, Production, Stores, Quality and New Product Development. The firm produces products in a made-toorder environment. The lead time for delivery ranges between 45 days and 10 months depending upon the type of products. The production of the company can be divided into three divisions. There was a fabrication shop that includes painting and plating, a machine shop that had manually operated machine tools and an assembly shop. There were 80 shop floor employees and around 40 administrative employees. Currently the firm M/s XYZ Limited had multiple suppliers and the company had decided to prune the number of suppliers.........

Exhibits

Exhibit I: Organization Structure

Exhibit II: Demand Data for Stand-Alone Switch Assembly

Exhibit III: Demand Data for Panel Assembly

Exhibit IV: Backward Scheduling

Exhibit V: Master schedule – Month-wise Schedule

Exhibit VI (a): Demand Data of Connecting Levers

Exhibit VI (b): Demand Data of Contact Levers

Exhibit VII: Frequency and Quantities of Order of Connecting Levers

Exhibit VIII: Price Details of Connecting Lever

Exhibit IX: Demand of Product X

Exhibit X: Steel Rod Specifications

Exhibit XI: Specifications of the Suppliers

Exhibit XII: Quotation 1 Price Details

Exhibit XIII: Quotation 2 Price Details

Exhibit XIV: Quotation 3 Price Details

Exhibit XV: Bill of Materials of Switch Assembly

Exhibit XVI: Panel Assembly Bill of Material

Exhibit XVII: Process of Panel Assembly

Exhibit XVIII: Demand Data

Exhibit XIX: Freight Rates

Value of Information Sharing Between and Among the Functional Departments: An Insight

Synopsis

The case study provides snapshot of the various activities, and also various problems in the process, carried out by the different departments of a hypothetical company. The firm produces panel assemblies and switch assemblies that are used by HT and LT consumers. Their order position is quite comfortable. The marketing department is doing a good job and so is the planning department. The Production Manager utilizes his resources well with redeployment of labor among his sections.

Marketing department which is in interface with its customers has seized the GM about the problems that customers face. Apart from the customer side delivery problems, GM has a gut feeling that the inventory in the stores/shop floor is high and hence the cost. As a first step to identification of the cost the GM has instructed the finance department to work out the standard cost. He has also asked the Purchase Department to identify the nature the procurement, go for the lowest quote, and to estimate the cost of moving to a newer type of procurement method.

The data for the calculations of the ordering cost, carrying cost are provided. The previous year demand and the price details are provided for analysis. The case study illustrates the problem regarding the non-sharing of information among the departments, the errors that may occur in calculation of the capacity requirements, the need for inventory policies and the approaches of evaluating them.

Requirements

A technical note is required on Inventory management and Lot sizing techniques. The focus of the technical note should be on economic order quantity, and other lot sizing methods. Rough cut capacity planning and introduction to capacity calculations are also required to be addressed in the technical note.

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