Albatross Anchor Operations Management Case Study

Question

Albatross Anchor Operations Management Case Study

Case Study 3
KU Consulting
KU Consulting has been asked to bid on a large consulting job with Albatross Anchor. In
order to win the contract for this consulting job a well written, logical, and highly
organized proposal must be written. It is your task/challenge to write the proposal for revamping Albatross Anchors Operations systems so that KU Consulting may win the
$50,000 contract.
Using the mandatory template (found in Doc Sharing) prepare your proposal by
answering (in detail) all of the questions posed below.
Your answers must demonstrate your
understanding of the concepts and principles
identified within the textbook, course information,
and activities, but also from independent academic
quality research to solve these challenges.
While it is acceptable to use the textbook as
foundational material you must conduct
independent research, as well, using the Kaplan
virtual library and the Internet to find information
that supports your findings and conclusions. A
minimum of four academic resources, in
addition to the textbook, is required for each
section of the proposal.
Please note: Quotations should make up no
more than 10% of your proposal.
Requirements for successful completion of each section of the proposal include:
➢ Prepared using the mandatory template for each section of the proposal (the
templates for each section can be found in Doc Sharing of this virtual classroom).
Failure to use the mandatory template will result in an automatic reduction of one
grade level.
➢ Proposal Cover Page
➢ APA style reference page.
➢ The body of the paper must be 4 full pages long (this does not include the cover or
reference pages).
➢ Body of the paper must be double-spaced (this includes spacing between
paragraphs and before/after headings).
➢ One inch margins on all four sides of the page.
➢ Times New Roman 12-font only.
➢ Indent the first sentence of each new paragraph ½ inch (this is already set in MS
Word as the first “Tab” setting”)
➢ Grammatically and mechanically sound.
➢ Introductory and concluding paragraph(s).
➢ A minimum of four academic quality research sources in addition to the textbook).
➢ Citations, within the body of the paper, identifying source materials, and in APA
format are required along with corresponding reference page listings.
The following documents are in Doc Sharing.
● MT435 Case Study 3.pdf
● MT435 Case Study 3 Template.doc (Template is required)
Please note*
1. Do not use Wikipedia, wikis, Answers.com, Ask.com, online dictionaries, or online
encyclopedias for this project. As a senior level student you are responsible for
independent research and for veracity of source.
2. A search engine is not a source but a tool used to find a resource. For information
on APA referencing of Internet-based information use the information on APA
formatting contained within the Kaplan Writing Center for more information or you
may use the Kaplan Guide to Successful Writing that is located in the Doc Sharing
area of this virtual classroom.
Albatross Anchor Case Study 3 (Note: This is not a real company)
Introduction
Albatross Anchor is a small family owned business that began in 1976 with four family
members. Albatross anchor has grown exponentially and now employs 130 people. This
one location/facility is situated on 12 acres located in a rural suburb of Smalltown, USA
(Please note* the building and facilities for Albatross Anchor are landlocked).
The plant* and the administrative offices are located in the same building.
(*Note: The plant includes: manufacturing, the shipping department, the receiving department, raw
materials storage, finished product storage, and the foundry).
The administrative offices are in the front of the building and the plant is located directly
behind the administrative offices (see diagram). The administrative offices have issues
because they are somewhat shabby, disorganized, and run inefficiently.
The plant is antiquated, worn, dirty, and technology-deprived and it no longer meets all
U.S. safety and environmental standards.
The owners of this small business have added on various processes as needs arose;
within the limited space of the plant. When Albatross Anchor first opened its doors their
expertise was in the manufacturing of bell/mushroom anchors (using a foundry process).
In 1989, in response to international competition, the owners of Albatross Anchor made
the decision to expand the product line to include fabricated snag hook anchors.
Customers
Albatross Anchor is a manufacturing factory that sells only at the wholesale level.
Albatross Anchors sales their products in two ways:
(01) Distributors that act as the middleman. The distributor accepts bulk delivery
of anchors at their large distribution centers. At the distribution center the bulk
shipment of anchors is broken up into smaller batches and shipped to individual
retail locations.
(02) OEM customers that purchase anchors in large batches to be used as a
component in the manufacture of boats.
Albatross Anchor does not sell retail. They are strictly a wholesale organization.
Products
The bell anchor is manufactured primarily through a foundry process in which ore is
transformed into a liquid state and then poured into molds as part of the production
process. The bell anchor is used primarily by freshwater marine craft.
The snag hook anchor is fabricated through the bending and welding of iron rods and flat
iron into a hook design. The hook design is best when used in saltwater. This hook design
snags bedrock and seaweed which holds the marine craft at anchor. The snag hook
anchor is used primarily for small to medium sized saltwater marine craft.
Each anchor is produced in multiple sizes to accommodate the type of watercraft, the
size of the watercraft and the place where the anchor will be used (saltwater or
freshwater).
Manufacturing
Each anchor type requires its own unique equipment and manufacturing process. Yet,
both manufacturing areas share the same shipping area, receiving area, warehouse area,
and administration offices.
The manufacturing area of the plant has had to change to accommodate the manufacture
of the two separate types of anchors. As each anchor requires its own manufacturing
challenges the manufacturing line must be completely changed over each time the anchor
type is changed. The time to switch over from one manufacturing process/operation to
the other manufacturing process/operation is 36 hours.
The plant space is at a premium and warehousing space for raw materials and finished
product is limited and located at the far south end of the building.
Plant antiquation and safety issues result in small batch production only. As a result of
this limitation, lead time for exceptionally large bulk orders is 3 to 4 weeks.
Costs
Current manufacturing costs are $8.00 per pound for mushroom/bell anchors and $11.00
per pound for snag hook anchors. Albatross Anchor charges the same per unit as their
competitors. However, the profit margin can sometimes be as much as 35% less (on
some of the anchors) because of operations inefficiencies.
Shipping challenges
Outgoing freight
Product size, bulk, and weight and maximum load limits require that the anchors be
shipped by large truck, rail, or large ocean-going freighter. Domestic orders are usually
shipped by large truck. International orders are shipped by rail and ultimately by large
ocean-going freighters. These are the only two methods of product shipment.
Incoming freight
Receipt of raw materials is by rail. Prior to the sale of anchors into the international
market all shipments of finished product went out completely by truck and therefore all
shipping activities were limited to the east side of the building.
Now, because of the limitation of shipping product into the international marketplace, all
product shipments for international delivery go out of the receiving dock for the initial leg
of shipment by rail. Prior to expansion into the international marketplace shipping had
been limited to the shipping department and receiving was limited to the receiving area.
However, with this change in international shipping the receiving area must now do
double duty – shipping of international orders as well as receipt of all incoming raw
materials.
Please view the below representation of the current building/facility set up.
Case Study 3
Question 1
Refer to the Albatross Anchor scenario/case study. Make recommendations for at least
four of the following challenges:
List of challenges
(a) Time management
(b) Cost management
(c) Quality management
(d) Performance management
(e) Enterprise project management
(f) Technology adoption
(g) Supply chain management
(h) Distribution management
Question 2
As the consultant for KU Consulting, you have been authorized to change the existing
facility (limited construction budget) and/or refine the process flow of the manufacturing
area. All changes must be completed within a 60-day window with the majority of the
changes happening at night when the plant is idle or on the weekend when the plant is
idle.
(a) List and detail the proposed changes and/or alterations. Please explain why you
chose what you chose, give the rationale behind your choices and finally, substantiate
your work.
(b) List and detail three implications and three complications that may occur as a result
of the recommended changes. Remember activities in one area of the facility may have
an impact on other areas of the facility.
(c) Create a Gantt chart showing a timeline for when the different changes proposed
should be made, detailing which changes may overlap and showing how long each
change will take to institute. Provide information to support your decisions and to explain
your choices as shown in the Gantt chart.

Sample paper

Albatross Anchor Operations Management Case Study

Introduction

Albatross Anchor is a small family business that manufactures bell/mushroom anchors and fabricated snag hook anchors. Albatross Anchor is currently experiencing a number of technical and managerial challenges that threaten to erode its profitability with time. With increasing competition from companies manufacturing similar products, the company has found its future operational existence under constant threat unless there is concrete action to reverse the current trend. The current manufacturing process employed by Albatross utilizes outdated technology making it inefficient and ineffective. The company also experiences significant challenges in management that increase the overall inefficiency and add to the cost of production. This proposal gives appropriate recommendations that Albatross Anchor can adopt to improve its production efficiency and reduce costs.

Question 1

Challenge 1: Time management

Albatross Anchor has poor time management skills. Currently, there is a lot of time wastage during the complete change over from one production process to another to suit production of the two different anchors. It takes the company about 36 hours to completely shift from one production process to another, which contributes greatly to inefficiencies through lost production time. Time is a great resource in manufacturing. The longer it takes to complete a project or a particular task, the higher the operational costs. According to Sivakumar (2010), companies should apply time management strategies in order to complete projects or processes efficiently and deliver to customers in a timely manner. Albatross Anchor can improve time management through implementing an additional manufacturing line to avoid time wastage during the changeover period. Although the initial costs may be high, the long-term benefits are attractive since the company will significantly improve its production capacity and reduce time wastage.

Challenge 2: Cost management

There is need for Albatross Anchor to improve its cost management strategies. Currently, the company’s profit margin varies significantly due to operations inefficiencies. The profit margin can vary by about 35 percent, which is a significant amount. Albatross Anchor can cut costs through four key strategies that include reduction strategies, elimination strategies, innovation, and through modification (Swamidass, 2000). Reduction strategies should focus on cutting down production time and the waiting period. Elimination strategy should aim at reducing waste, eliminating barriers and reducing bottlenecks in production. Innovation may entail re-engineering the entire production process, equipment in use, or replacing the production methods. Modification aims at reducing costs through new design of product.

Related: Albatross Anchor Proposal Case Study

Challenge 3: Enterprise project management (EPM)

Enterprise project management is a significant area in a company experiencing radical transformation or change. Over the years, Albatross Anchors has increased in size from a small family owned production plant to a larger facility serving the international market and having 130 employees. This transformation from a small family owned business has led to new managerial and technical challenges. EPM can enable the company to manage changes and integrate with new production techniques or technologies (Schwindt, 2005).

Challenge 4: Technology adoption

The current plant at Albatross Anchor uses outdated technology that does not meet all the safety and environmental standards outlined by regulatory authorities in the U.S. There is dire need to adopt the latest technology in production to boost plant capacity and increase efficiency in operations. In the modern manufacturing world, automation has become a common phenomenon replacing old methods of production such as manual work by hand in manufacturing and fabrication process. Automation of the manufacturing process has enabled companies to mass-produce high quality products and to maintain similar standards for all products. Application of modern technology is also critical in reducing wastage and improving the overall efficiency. In the current period, automation is a major determining factor in the competitiveness of a particular company.

Question 2

• Proposed changes: After much deliberation, KU Consulting recommends changing the existing facility as the best strategy especially with regard to the long-term goals of the Albatross Anchor. Since each of the anchors require unique equipment and manufacturing process, there is need to carry out production in separate areas. This will increase the production capacity of Albatross Anchor and reduce time wastage. Currently, shifting from one production process to another takes 36 hours, which represents a huge share of labor hours lost. Changing the existing facility will enable Albatross anchor acquire latest equipment or technology which conforms to the U.S. safety and environmental standards. The quality of products will improve in addition to low production costs.
• Implications and Complications

Three implications may arise by changing the existing facility. First, there could be a significant reduction in lead-time in the manufacturing process. Adopting a new production facility will enable Albatross Anchor improve production speed for both type of anchors. This will cut down the lead-time for bulk orders to about one week. Secondly, Albatross Anchor will experience significant reduction in costs. Application of modern technology in manufacturing eliminates wastes, reduces demand for manual labor, and increases efficiency in the production process. This drives production costs down. Lastly, it will enable the company meet the outlined safety and environmental standards as per the U.S. manufacturing laws.

Several complications may arise. First, employees may lack the necessary skills, knowledge or experience required to manage a larger facility or the new equipment and technology. This will require training the employees, which may be costly. Secondly, limited funds may hamper efforts to change the existing facility. Building a new facility will cost higher compared to refining the process flow of the manufacturing area. Thirdly, there may be need for additional employees, which may bring additional costs to the company. Changing the existing facility will involve reexamining the current production process and making improvement in several areas. This will create the need for additional employees in areas such as plant operation and in administration.

• Gantt Chart

The following Gantt chart shows the timeline for changing the existing facility

The first step involves the evaluation of organizational needs and requirements. This will enable the management establish what exactly the organization requires and whether changing the existing facility is necessary. On conducting the needs assessment, training of employees will take place to brief them on what to expect with the new plant and equipment. It is important to train employees to improve their skills and knowledge. Construction of the new site will take approximately one month. This will also entail provisioning of infrastructural needs and installation of necessary operational utilities such as water and electricity. In the last two weeks, installation and testing of the new manufacturing system will occur.

Conclusion

There is need for Albatross Anchor to implement the aforementioned recommendation in order to improve the production process. Key among the recommendations is the need to replace the outdated technology with new technology. This will improve efficiency in production process and ensure conformance with outlined safety standards and regulations.

References

Schwindt, C. (2005). Resource allocation in project management. (Springer e-books.) Berlin:      Springer.

Sivakumar, V. (2010). Lean and agile manufacturing: Theoretical, practical and research           futurities. S.l.: Prentice-Hall Of India Pv.

Swamidass, P. M. (2000). Innovations in Competitive Manufacturing. Boston, MA: Springer US.

Related:  Albatross Anchor Operation Changes for Sustaining Competitive Advantage