Case Study Material Requirement Planning Presentations
her father, she came with some new ideas, many of which were already paying big dividends, and the company was really starting to grow. One of these ideas was the introduction of wood products to the existing line of metal fabricated items. There is no arguing that the line is proving popular with customers (and the sales force) resulting in higher revenues and proFts.Demand for K-1010 is a perfect example of this. Who would have thought that there was such a big market for laser engraved hardwood key chains? Well, the report told the tale. Hardy had been selling the new key chains for the last 15 weeks or so. Demand started slow, but grew steadily. Everything had been going according to plan. There had been no problems with the supplier of the oak stock from which the key chains were cut. The line had reported no problems. No shortages, no production problems, but no Fnished goods whenthe system was telling him there should be ample coverage for the current customer orders. They just weren't there. When he Frst got wind of the problem, Nick had thought that sales might be up to their old tricks of booking new business inside the frozen zone. He had ±oated that in the meeting without giving it much thought. That had really litBuster's fuse. Buster was adamant that no new orders were being booked inside the lead time for the key chains. He had already heard from Leona that those kinds of actions were not going to be tolerated. He remembered her distinctly saying, "This is a new product line and we wanted to make surethat we don't start o² by making promises we can't keep." Buster knew it wouldn't be wise to test her on this (at least not right away), so he had instructed all his reps to pay very close attention to the available-to-promise values. He knew if there were any arguments down the line, he could claim he depended on the information system. In looking at the MRP record, Nick wondered why there were no material shortages for the oak stock. He knew that there were occasional knots and o² cuts that meant that there should have been some scrap or yield issues but there was no scrap factor for the key chains. How was it that no material usage variances were being reported? He reviewed the issues of the oak stock from stores over the last couple of months hoping that would give him some clue. While future products would use oak, the key chains are currentlythe only product to use it, at a rate of 15 linear feet per 100 key chains. The latest cycle count, taken this morning, showed 1650 linear feet of oak on the shelf.