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Posted: May 19th, 2022
Enhancing Business Processes
Enhancing Business Processes
1. What sort of Manufacturing operation does the ABC Corp. have (MTO or MTS)?
Make to Order (MTO) refers to a business production approach that usually permits clients to buy products that are customized to their specifications. As such, it is a process of manufacturing in which the production of an item starts only after the order of a confirmed customer is received (Altendorfer, 2013). On the other hand, in Make to Stock (MTS) products are produced and stocked as inventory until a customer purchases them (Altendorfer, 2013). Based on these definitions, it can thus be concluded that the manufacturing operation that ABC Corp has is the MTO. This is because the production of the computers was made after a customer made an order. In addition, the acquisition of computer peripherals (keyboards, mouse and speakers) from vendors was only instigated after the customer made the order.
2. State at least 3 areas where you will modify the process to reduce the cycle time.
There are various areas in ABC Corp where the process can be modified to reduce the cycle time. One such area is procurement. In this case, it is quite evident that the procurement process takes some time. For instance, a request for quotation has to be made and issued to several vendors, bidding has to take place, and then the vendor is chosen. For this reason, the process can be modified by decreasing the number of vendors/suppliers. This will serve to decrease time spent with the nitty-gritty details of every order with each different vendor. Accounting is another area that will be modified to reduce cycle time. The accounting department seems to spend a lot of time in analyzing sales orders, verifying them, processing bids etc. Therefore, the cycle time can be reduced by leveraging the use of accounting software tools. These will serve to automate many of the department’s activities and fasten its processes. The last area is logistics. The fastest shipment option should be chosen to ensure the products reach the customer within the shortest time possible.
3. What will be the cycle time if your proposed changes are implemented?
If the changes are implemented, the cycle time will reduce to about 25 days.
Reference
Altendorfer, K. (2013). Capacity and inventory planning for make-to-Order production systems: The impact of a customer required lead time distribution. Springer Science & Business Media.
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