Challenges for Oak Hills Business
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Oak Hills produced testing equipment that utilized in oil and gas exploration. Oak Hills are trying to increase operational efficiency by cutting time lead to one week. They current lead-time is between one to two weeks. They are reducing their inventory level and enhancing their customer services with the assistance of a lean system.
There are rumors around about the impending merger of TOGS the parent company with Pasadena Services plus lack of communication from management. It has dumped the employee team spirit. The recent layoff due to economic slowdown also affected the employee team spirit. Quality and productivity bonuses awarded to the shipping department in Oak Hills. Employees are trained and help other employees to complete the rush line of works.
Assembly press machines at the Oak Hills shipping department are old and worn out. In that location is not adequate space available to hold the sensor board near assembly line which goes to delay in output. Quality control was overflowed with work since all assembly units start at the same time and total time for quality inspection is 10 minutes. Quality controlled during assembly only and is not considered as a factor when packing the product which will cause defect discovered by the customers'. They cannot deliver quality merchandise on time.
Employees are central to lean system change, and the company needs to update the machines and system to reduce the waste of raw materials and spare time and workforce. Management needs to see that the quality department is not the only department responsible for checking.
The lean system means zero waste and serves to reduce variability and to achieve process improvement. The management needs to shift the way they think by developing lean leadership for the management and continuous learning and lean thinking for employees with proper communication with client and supplier to help on time delivery.
The changes for the lean system is not only for the operation and the machines. It originates with the change of thinking inside the firm. The lean system requires a multifunctional team, and rotational team leadership like in a shipping department job rotating will let all employees trained in all the part of the shipping department. Employees need to receive appropriate education and training. These modifications need to plan and implement the management in the way employees do not feel strained or left out.
Supply change in Oak Hills is not managed properly, and there is no proper communication with supplier and customer which cause higher lead-time and high inventory level. To improve Oak Hills, supply chain: need to have good communication with the vendor, to know the potential demand should be in contact with customers, and Material requirement planning (MRP) should apply fully.
They are confronting serious issues from demand volatility. There is a lack of communication between the firm and customers, and clients use to place a last-minute order. These two factors cause the Oak Hills cannot plan for potential demand and force to rush jobs. The firm needs to handle the variability itself, so that lean system is being useful to cut the companies waste. The supplier should appraise the order quantities and production schedule so they can design their production schedule accordingly. The same integration with the customers will help to bring down inventory and monetary value and lower lead-time.
They require improving their efficiency. Implementing lean system may arise some problems, but it can also solve some of the matters connected to the production process. All stakeholders need to see the impact and benefits of a lean organization. They require to adopt the latest technology, alter their process, and educate the employees which involve expenses. Higher management needs to convert the profit of lean system to take the alteration. They might run into problems while implanting the new organization, but all the problems can be purposed by the effort of senior management.
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