Now as observed in the case of Applicon, it is possible that all of the different organizational departments work with friction. When products are being manufactured, the manufactory department at Applicon is not worried about whether there are demands for the product. They think the excess manufactured units are the problem of the sales department. There is hence friction in communication. People do not convey what they want to convey in a clearer fashion. There is an emphasis on PUSH manufacturing because PUSH manufacturing is what Applicon uses till now. However, in doing PUSH style of manufacturing, they end up making products that they are dealing with the excesses in inventory. Product demand is not an all-time high and they have to deal with different batch sections overflowing. Marketing and manufacturing are not connected. Marketing is selling something that they are not used to marketing, and hence Applicon tries its best to train them and move them up the sales ladder.
Quality problems resulted in excessive rework requirements as observed in the case of Applicon. Applicon had to work on reworking most of its major operations so that it could move through the manufacturing layers smoothly. PCB production, mechanical assembly, cable assembly and the top-level assembly were all affected here as observed in the case study. The work was scheduled in terms of the demands for the product. It was scheduled in terms of the numbers of items that they wanted to sell. The emphasis was on quantity and not quality. Visible defects were observed at this point that deterred quality improvement efforts and yet these defects were masked very well by the numbers being churned out.
Finally, there were issues of large inventories observed at this point. The large inventories are created because more products are being produced with little understanding of the demand being effected at the consumer market. The only incentive was to make more quantity. The motivated attitude of the manufacturing units were to push out units, they figured that the marketing or sales department will figure out how to sell them. The shop floor becomes cluttered at this point and there was no efficiency now both in process and in product.
Compared to the traditional manufacturing method, the cellular manufacturing method is a more apt approach. In the cellular manufacturing approach, the fundamental understanding is on how to produce a piece to be sold rather than a batch of a part of a piece (Drolet et al., 1996). The factory system was very wasteful as work or process was given more importance. However, in the case of the cellular manufacturing system the product in the process is more important (Vakharia & Wemmerlov, 1990). In the case of cellular manufacturing in Applicon, production sequence is arranged such that there is a smooth flow of material and components and Applicon would not suffer backlogs. This is a lean method and production flexibility is improved. Instead of batch production, products are manufactured in a pace coherent with consumer needs. High value production sequences are replaced with flexible forms of production. Signalling and correction of defects are easier. The floor space is saved because factory no longer works as a warehouse for semi completed parts or units. Overall energy consumption of the cellular layout is lowered because of this.
In the case of Applicon, there are both product and process improvements available because of the shift. It was observed that similar product families were created at this time. In the current layout, it is observed that the total area that is seen to be dedicating to the process of manufacturing is in fact reduced now as the purchase materials will enter the work cells and are inspected as soon as they are received. Furthermore, in each of the cells such as the FA cell, the mechanical assembly or the top assembly cell, the similar group end items are seen to be consolidated.
Theoretically in switching from factory manufacturing, there are some obvious issues that have to be addressed, such as costs, scrapping of older equipment etc. Conventional pollution control systems could suffer as a result.
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