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Operations Management- Forefront Manufacturing Case

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by

Keerthana Gajarajakumar

on 10 December 2014

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Transcript of Operations Management- Forefront Manufacturing Case

Strategy Recommendation

1. Overview of company
2. Current Situation
- SWOT analysis
- What went wrong
- Manufacturing techniques
- MRP methodology
- LEAN methodology
3.Li's Challenges and Proposed Ideas
- Challenge 1
- Challenge 2
- Challenge 3
Conclusion and overall recommendations
Employee Empowerment
Frequent Management Meeting
Strict recruiting process
Training Program
Strong experience in Team Building
Better reward system
Implementation of SCM
Let's understand the current situation
Li's Major Challenges and Proposed Ideas
Marketplace
For consumers
- guarantee the quality of goods
For shareholders
- make sure the stock market in good situation

What went wrong?
Waste, cost and quality control technique
Emphasizes on reducing waste in manufacturing process by implementing waste reduction techniques
Quality control using TQM concepts , JIT method
Challenge-1 and recommendation
Improve Profitability
Challenge-2 and recommendations
Challenge-3 and recommendations
Be responsible to the local society
Pros
Superior quality goods at the lowest prices possible
Minimize product costs
Close-knit relationships with its suppliers and customers, ensuring the timely fulfillment of orders
Improving collaboration with your suppliers
Improving product quality
Ensuring compliance with customers' expectations and requirements
Reducing the risk of negative PR
Attracting and retaining employees
Cons
Investment
complexity
Dedicated managers to oversee supply chains
premise of collaboration with suppliers
Distribution Network Configuration
Based on Jim Harvey's speech structures
Lack of Employee Training
High Employee Turnover Rate
Prevailing culture of not accepting mistakes
Lack of Documentation & Guidelines
Factory Layout Design
Machine Defects
Automation Line
Production ahead of winning a bid
Forefront Holdings was Est. in 1992, based in China
Founded by two university classmates
Leading manufactures of high quality wooden door-sets
Grew during Hong Kong property boom of the 1990s
Hong Kong investor Andrew Chan purchased 55% of stocks and became a chairman
Issued public offering (IPO) for 2007
In March 2005, Contracting and manufacturing departments were separated.
ForeFront Manufacturing -
History
Forefront Manufacturing Case- Presentation Outline
Overall Conclusion -
Recommended Solutions
Strengths
Forefront Holdings focused only on production of wooden doors
Grew during 1990's leading to installation of 90% of doors in Hongkong & Macau
Ideal location for production
15 years of expertise and strong client base


Weakness
Lack of skilled labor & employee training programs
Lack of enough storage
Maintenance issues
High Cost & delay incurred in replacing damaged parts
Bottleneck in finishing department

Opportunities
Threats
High Employee turnover rate
Contracting can purchase doors from other companies- So competitive pricing needed
Due to pre-order production, quite high risk of financial losses
Shortage of materials sets off a chain reaction leading to borrowing of materials

People
Product
Facility
Market
Product Quality Control
Seven Concepts of TQM
Add checkpoints
Double check before products come into the market

Facility - Factory Layout
Old
Market Strategy
Produce after we win the bidding
- Implement Just in time (JIT)
Accept bids from other contractors
New
Establish two Management System
One that would drive operations automatically, instead of depending on constant supervision
One that would continue work even if Li or other managers left
Implementation of Lean Technology
Implementation of improved technologies like SCM
Implementation of Enterprise Resource Planning (ERP)
Just in time (JIT)
Suggestions:
Community
For local communities
- increase the employment rate

Workplace
For employees and unions
- pay fair wages
- build a good work environment
- ensure the chance of promotion

Environment
For government:
-Support the government’s policy
-Comply with the law
For NGOs(Non-governmental organizations)
-Provide equal employment opportunities
-Donate to charities


International Trade
Working in tandem with Contracting gives an edge
Initial Public Offering for 2007
Utilizing skills of Michel Li, with 16 years of experience as Operation Manager

Mission
Strategies
Improve Manufacturing's profitability
Become a leading wood door manufacturer in China
Automated Operations
New factory setup to supporting increase in demand
Restructuring organizational management system
Restructuring for required IPO feasibility
SWOT Analysis
Lean Concepts
Applying Lean for Forefront manufacturers
Enhancing manufacturing processes
Improving manufacturing methods -
Material requirement planning (MRP) technique
Lean and Just in time (JIT) philospohy
Material requirement planning (MRP)
It is a tool to deal with these problems of what, how many and when quantities of respective items are needed.
Uses master production schedule
Uses what - if analysis for forecasting of orders
It is used to plan manufacturing, purchasing and delivering activities.
Helps organizations to maintain low inventory levels.
Basic functions of this system includes inventory control, bill of material processing and elementary scheduling.
ISQS 5343 - Team 4
Current Crises
Inefficiencies in production and capacity/storage constrains
Threat to financial survival and viability of an Initial Public Offering

Cause and Effect Diagram
Pros
Cons
Implementation of ERP
Complete visibility into all the important processes
Automatic and coherent workflow from one department/function to another
A unified and single reporting system to analyze the statistics/status
Individual departments having to buy and maintain their own software systems is no longer necessary
ERP systems with Business Intelligence identify potential areas of problems/improvements.
ERP is a modular software system
Secured centralized storage/back-up of all enterprise data
Integrate other systems (like bar-code reader, for example) to the ERP system through an API (Application Programing Interface)

The cost of ERP Software, planning, customization, configuration, etc. is high
ERP deployments are highly time-consuming
The cost savings/payback may not be realized immediately
ERP implementations are difficult to achieve in decentralized organizations
Full transcript