Case Study Trans European Plastics
Trans European Plastic
A Case Study
Module Name: Managing Services and Manufacturing Operations
[Module Code: GMSI580-2010]
Mr. Ashutosh Khanna
The case study talks about the problems faced by the Europe’s largest manufacturers of plastic household items, producing over 500 products in its French Factory.
Reasons for TEP’s inability to deliver all its products reliably within the target of one week are:
* There are 24 machines which are working on a standard (non-overtime) week of 105 hours. Thus, there are 2520(24 X 105) machine hours …show more content…
* Delivery lead times are universally ex-stock, with delivery within one week by carrier. This gives no scope at all for last-minute stock replenishment. The only way to achieve this is to hold sufficient stocks of every item in the list. The company is already considering extending the warehouse to achieve this, but that will not be sufficient without providing more moulding capacity too. The investment is justified by the reduction in outsourced warehousing and transport, which suggests that the uplift in storage capacity may not be so great in practice.
The effects on distributors could be as follows: * Loss of confidence of the distributor in TEP * Loss of potential sales of products(specially high seasonal products) * Extra costs involved in their ordering and accounting systems (e.g. multiple deliveries against one order, complex reconciliation of statements) * Extra time and costs involved in chasing deliveries * Possible resistance to ordering new items to the range, on the basis that they are already awaiting existing mature products
TEP makes a range of more than 500 plastic items using batch injection molding. According to the case, TEP is facing problems with the inventory shortage and decreasing service levels. TEP was planning to invest in a warehouse extension. So, we need to calculate a feasible batch size for the product Baby Bath. As mentioned in the case,