Franklin Fan Company is involved in producing fans. The company has two most demanded products in the market, which are the Ceiling Fan, being product id CF151, and the other is a personal fan being id PF032. The fans are best suits for the modern home and the recent trend of modern homes has increased the demand for the two products of the Franklin Fans. Due to increase in demand and keep the supply equally to meet the demand of the customer, Kathryn Marley the vice- president of the company installed a MRP system during last financial year. This was the first step taken by the company towards the installation of the MRP system. The MRP system was brought into force to enhance the market position of the Franklin Fans and achieve the advantageous position in the market. Marley brought the system to process online within the organization and provided training program to its employees about the usage and importance of installing such system within the working process. The MRP system was functioning well and gave benefit to the company.
The company’s products are in huge demand and therefore the company needs to change their plan of production regularly. The increase in the rise of demand has resulted in incorrect inventory plan for the products. The company is facing certain problems with the present MRP system as it does not updates the due dates regarding the available raw materials for the production of the product (Doma?ski & Fertsch, 2015).
The MRP system was running well for past one year but it shows some deficiency in its process as it was not providing proper information regarding the shortage of materials which results in delay in delivery of products. Many customers were dissatisfied with service of the company in delivery of its products. This gives rise to the reduction in demands of the products of Franklin Fan Company. Due to rushing with the orders and delay in delivery the company was facing quality issues of the products. The customers were disappointed with its product which results in reduction of demand for the product and increased the possibility of losses (He et al., 2014).
Therefore, after analyzing the challenges faced by the Franklin Fans Company, the company started using ‘Lot for Lot’ method. In this method the company can easily determine the amount of resource to be allocated to meet the demand of the products in the market. The company can reduce the large amount stock hold during decrease in demand for the product or can increase the stock of the product during the increasing demand for the products. The method also helps in reduction in the cost of maintenance of the inventory stock. The decisions made through the models used in this method gives accurate decision making which helps the company to escape from loses. The main advantage of the lot for lot method is that the production goes on continuously through proper or optimal allocation of resources which results in no capacity constraint.
Therefore, we can conclude that the company should use the system with other techniques to get better result. The company should appoint new and experienced employees or train the existing employees to improve the resource planning and optimal allocation of resources for the production (Malakooti, 2013). The Company should use certain other techniques to meet the desire of its customers with adequate supply in the market. (Shan et al., 2016). Hence, the company should use the lot for lot method. This will help the company to determine the demand of the product in the market approximately and helps in allocation of resources for the production of the fans. Equilibrium in demand and supply of the fans are met in the market, it raises more demand for the product and increases the number of orders for the product in a period. The process helps in reducing the cost for maintenance of the inventory or stock as the allocation of resources are optimal. Moreover, increase in order or demand for the products, reduces the cost of production and increases the savings of the company.
Doma?ski, R., & Fertsch, M. (2015). Integration of production and supply in the lean manufacturing conditions according to the lot for lot method logic-results of research. LogForum, 11(4), 351-358.
He, S., Shin, D.H., Zhang, J. and Chen, J., 2014, April. Toward optimal allocation of location dependent tasks in crowdsensing. In INFOCOM, 2014 Proceedings IEEE (pp. 745-753). IEEE.
Malakooti, B. (2013). Operations and production systems with multiple objectives. John Wiley & Sons.
Shan, Y., Yiping, Y., Xiaojuan, L., Huiling, M., & Xiang, L. (2016). Research on reverse MRP system development of agricultural mechanization based on modularized BOM. Modern Manufacturing Engineering, 9, 008.