# Ase Study: The Realco Breadmaster;Chapter 16 Case Study: A Bumpy Road for Toyota Case Study:

answer all the following questions. Supplement your answers with scholarly research using the Ashford Online Library. Each case study should be addressed in four to five pages, resulting in a combined Final Paper of eight to ten pages.

Chapter 15 Case Study: The Realco Breadmaster

Two years ago, Johnny Changas company, Realco, introduced a new breadmaker, which, due to its competitive pricing and features, was a big success across the United States. While delighted to have the business, Johnny felt uneasy about the lack of formal planning surrounding the product. He found himself constantly wondering, a?Do we have enough to meet the orders weave already accepted? Even if we do, will we have enough to meet expected future demands? Should I be doing something right now to plan for all this?a?

To get a handle on the situation, Johnny decided to talk to various folks in the organization. He started with his inventory manager and found out that inventory at the end of last week was 7000 units. Johnny thought this was awfully high.

Johnny also knew that production had been completing 40,000 breadmakers every other week for the last year. In fact, another batch was due this week. The production numbers were based on the assumption that demand was roughly 20,000 breadmakers a week. In over a year, no one had questioned whether the forecast or production levels should be readjusted.

Johnny then paid a visit to his marketing manager to see what current orders looked like. a?No problem,a? said Jack Jones, a?I have the numbers right here.a?

WEEK

PROMISED SHIPMENTS

1

23,500

2

23,000

3

21,500

4

15,050

5

13,600

6

11,500

7

A 5400

8

A 1800

Johnny looked at the numbers for a moment and then asked, a?When a customer calls up, how do you know if you can meet his order?a? a?Easy,a? said Jack, a?Weave found from experience that nearly all orders can be filled within two weeks, so we promise them three weeks. That gives us a cushion, just in case. Now look at weeks 1 and 2. The numbers look a little high, but between inventory and the additional 40,000 coming in this week, there shouldnat be a problem.a?

QUESTIONS

1. Develop a master production schedule for the bread-maker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco a?overpromiseda?? In your view, should Realco update either the forecast or the production numbers?

2. Comment on Jackas approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?

3. Following up on Question 2, which do you think is worse, refusing a customeras order upfront because you donat have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?

4. Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels? (Bozarth 513)
Bozarth. Introduction to Operations and Supply Chain Management, 2nd Edition. Pearson Learning Solutions. VitalBook file.

Develop a master production schedule for the breadmaker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco a?overpromiseda?? In your view, should Realco update either the forecast or the production numbers?
Comment on Jackas approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?
Following up on Question 2, which do you think is worse, refusing a customeras order upfront because you donat have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?
Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?

Chapter 16 Case Study: A Bumpy Road for Toyota Case Study:

By many measures, Toyota is still barreling along. The companyas net income of \$10.49 billion in yen in the year ended March 31 [2004] not only exceeded those of rivals General Motors Corp. and Ford Motor Co. combined, but set a record for any Japanese company. Toyotaas next big goal is to expand its share of the global market to 15% over the next decade, from 10% now. That would make Toyota roughly the same size No. 1 auto maker GM is today.

But there are signs that the companyas ambitious growth agenda is straining human and technical resources and undercutting quality, one of Toyotaas most critical strategic advantages. It is the kind of paradox many highly successful companies face: Getting bigger doesnat always mean getting better.

Toyota still tends to outscore most rivals, including Detroitas Big Three auto makers and European brands, on industry surveys of quality and reliability. But Toyotaas lead has narrowed and in certain key segments disappeared. a?Toyota quality isnat improving as fast as it should,a? Toyotaas president, Fujio Cho, concedes in an interview. To stop the quality slide, Mr. Cho says Toyota has launched multiple a?special task forcesa? at trouble spots in places such as North America and China to overhaul shop-floor management. Toyota also has established a Global Production center in Toyota City to train midlevel factory managers so they can more effectively run plants outside Japan. Toyota now is re-evaluating some of its most fundamental operating strategies. a?We are getting back to basics,a? says Gary Convis, a Toyota managing officer, who is also president of the Georgetown plant.

An important part of that effort focuses not on machines or high-speed information technology, but on replicating a special class of people who were instrumental in making Toyota a manufacturing powerhouse during the past 25 years. When Toyota first began opening factories in the U.S. in the mid-1980s, kicking off its dramatic global expansion, some of the most important people in the new plants werenat top executives, but midlevel Japanese managers commonly known as coordinators. These coordinators were experts in Toyotaas Lean-manufacturing techniques and philosophies, commonly known as the Toyota Production System, or TPS. These coordinators, usually with 20 or more years of experience, generally shunned classrooms. Instead they trained American shop-floor managers and hourly associates by attacking issues directly on the assembly line.

9N. Shirouzu and S. Moffett, a?As Toyota Closes in on GM, Quality Concerns also Grow,a? The Wall Street Journal, August 4, 2004.

The principles behind Lean production took shape over five decades, starting with efforts in the 1930s by one of the companyas founding fathers, Kiichiro Toyoda. The Toyota system took its current form during the 1950s with the leadership of Taiichi Ohno, a legendary Toyota engineer who drew inspiration from a trip to the U.S. during which he watched how a supermarket stocked its shelves using a just-in-time delivery of goods.

Mr. Ohno preached there are seven forms of muda, or waste, in any process. When Mr. Ohno trained recruits to Toyotaas elite Operations Management Consulting Division, he drew a chalk circle on the floor in front of a process on the assembly line and told the trainee to watch that job until he could identify how it could be improved. A trainee could stand for nearly a day before he was able to satisfy Mr. Ohno with his answer.

When Mr. Ohno began applying his production approach full-scale, Toyota factories achieved huge gains in productivity and efficiency. The marriage of efficient production to an obsessive concern for quality helped Toyota establish a reputation for bullet-proof reliability that remains a huge competitive advantage. By the late 1980s, Lean production was a deeply entrenched w